Hi everyone, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Always warm, always sunny—sometimes Colorado.
So, predictably, what ends up happening whenever you start talking about things like, "Hey, maybe I should buy this or that," is that people usually don’t comment on it directly. Instead, they talk to others in their orbit and get them to opine and write pro or con articles. An interesting article came by, and I think it epitomizes the fundamental problem in journalism. Here it is: "Opinion: Charles Hoskinson Would Be the Worst Thing to Happen to CoinDesk," written by a crypto journalist.
The article criticizes me, saying, "Well, you know, the spirit of lazy journalism. He might be worth some money; perhaps he could buy it, but oh, he probably can’t, so he’s probably lying." It claims that CoinDesk deserves better. The crux of it is in the last few paragraphs, where the author states, "I have no doubt about the integrity of many journalists at CoinDesk." Okay, blanket statement. They broke the FTX story? Actually, they didn’t; Coffeezilla and others did that. But okay. There were a lot of people for months claiming issues with FTX, and CoinDesk was completely silent, essentially causing the bankruptcy of Genesis to happen sooner rather than later. No, FTX caused that; I know that because we were a counterparty of theirs.
They’re a talented group that deeply cares about reporting the truth. It’s a real shame that some rich guy thinks he’d bring a better legacy to the outlet because I assure you he’s wrong. None of Hoskinson’s suggestions, from the ludicrous veracity bonds to NFT articles, do anything to fundamentally fix journalism. A new cryptocurrency oligarch to replace Barry Silbert won’t benefit CoinDesk.
Then there’s the classic, "I spoke to ten guys." We remember that from Mike Novogratz, right? "I spoke to numerous journalists and editors within and outside the cryptocurrency industry about Hoskinson’s dream of buying CoinDesk." There was a collective revulsion and broad agreement that I don’t know anything about journalism. But I need everyone to know I can afford it if I really want to. So, another personal attack on me—cool, Charles, very cool. Just promise you won’t.
I brought up concepts like prediction markets. Prediction markets are where you start using money to predict outcomes of things. What’s really interesting is that if you look at a paper from Rosenbloom and Nuts, they basically said the results established that real money markets are significantly more accurate for non-sporting events than play money. We also examined the effect of volume and whether differences are market-specific.
The long and short of it is that when you start creating financial incentives for things, you get different results. The fundamental problem with journalism right now is the incentive structure. I don’t know a lot about journalism, but I do know that very few people in society trust journalism or the media. In fact, if you line up ten people and ask, "Do you trust mainstream media?" probably nine out of ten will say not completely or not at all. That’s not a Republican thing or a Democrat thing. If you’re a Democrat, do you trust Fox News? Do you trust Newsmax? Well, that’s not real journalism. Okay, so if you’re Republican, do you trust CNN or MSNBC? Well, that’s not real journalism either.
What you’ve done is redefine real journalism to align with your political values, while the other political values are dismissed as not real journalism. No, they’re all journalism; they’re all technically journalism. The problem is the incentive structures are wrong. The incentive of journalism right now is to make you angry, to divide you, to make you click. Let’s be honest here; that’s what it’s about. It’s not about objectivity or investigative journalism; it’s not about truth or establishing a truth to power. I’m sorry; it’s just not.
We have thousands of examples of this, from the origins of COVID to military spending to how the United States handles classified information and civil asset forfeiture. The nepotism and corruption in the U.S. government bureaucracy are all kinds of things that are never discussed unless it’s politically convenient.
So, the problem is incentives. Where do they make money? This concept of veracity bonds aligns the idea of prediction markets with an outlet. When you publish as a journalist or an organization like The New York Times, you’re saying our credibility as an organization is on the line. If we’ve published something inaccurate, then obviously we have egg all over our face. But when you live in a culture where it’s okay to lie because you’re lying for political or monetary reasons, your team will back you regardless of what you write.
The Hunter Biden laptop story is a great example of that. It was Russian disinformation until it wasn’t. But the minute you get caught, there are no consequences. Then your incentive structure is broken. A veracity bond with a prediction market model says that if you get caught with your hand in the cookie jar, you actually lose money. As a reader, I get to know how serious you are. If someone comes up to you and says, "I believe this is true; this person won the Super Bowl," that’s a world of difference from saying, "Here’s a thousand dollars on the table, and this person won the Super Bowl on this date." If that’s wrong and there’s a process to determine that, you get the thousand dollars. How much more would you believe the person? You’d say, "Well, the guy’s serious; he’s putting a thousand dollars on the table."
Let’s do that for articles. Why is that a terrible idea? We’re okay with fact-checkers as long as they politically agree with us, and when they’re wrong, there’s no recourse. But we’re not okay with economic incentives for the veracity of an article. This is the elitism of journalism that makes people hate journalists.
My entire point about why the institution needs to be reconstructed is that the dirty secret of journalism is that things are written not because they’re true, but because they make money. That’s what corporate media does. If you believe differently, you’re a very naive person. Everything about this process of journalism is about money.
As a journalist, you may believe you’re different, but how much editorial control do you really have on a day-to-day basis? How many articles can you really write in a particular direction? What resources are you given to pursue those particular stories? If you say, "This is the right thing to do, but only five people are going to read this," or "I can do this top ten things you didn’t know about celebrity XYZ, and a million people are going to read it," which one do you think you’re going to end up writing more often than not? Let’s be intellectually honest here.
That’s a problem of incentives. The entire discussion of CoinDesk is about incentives. How do you build an outlet where you incentivize people to collaborate, communicate, share, and mix? Top 100 cryptocurrencies should give them a space to write their stuff. That means you’re in constant dialogue with the information apparatus of each of those ecosystems, and they’re all talking to each other. What ends up happening is you have contradictory stories. Chain A says something about Chain B. Which is right? Well, then you follow a process to find it out, but you’re putting it in an open, transparent way.
The ownership structure of these types of things is immaterial to the system process. You can make it a DAO; you can bring a consortium of people together to buy the asset and do things with it. These are the kinds of discussions and brainstorming sessions we need to have. Because at the end of the day, what is the goal here? You want depth, you want peer review, you want timeliness, you want accuracy, you want accountability.
Maybe I don’t know anything about journalism, but when I read stuff, I would like the things I read to have those properties. Let’s go ahead and put a page in Laura Shin’s book as your rebuttal and reply to asking for these things and saying I don’t know anything about journalism. Furthermore, don’t you want to be able to go back into the past and understand what happened? How many things have been written where there’s never been a follow-up? A car crashes into McDonald’s—wow, that’s terrible. Okay, two years later, whatever happened to that whole McDonald’s car thing? Did the driver go to jail? Was he drunk? What was the story there?
I’m sorry; there was never a follow-up story. Wouldn’t it be nice to pull it out and then put some funding down, saying, "I’d like to know more; could you look into this?" Instead of an editor sitting there with a team of journalists saying, "What should we write about this week?" you actually have a customer involved in that product, where they’re coming to you and saying, "Could you look into this?"
Those same channels would allow for citizen journalism to be integrated into the normal journalistic process. Bob over there says there’s a lot of nepotism and corruption. Ah, well, it’s whistleblowing, right? Those same channels permit that. But remember, just like Mike Novogratz talking to his ten people about Cardano and all of them saying no, the author of this article talked to ten people about CoinDesk, and obviously, no journalist wants this.
Why? Maybe because they don’t want accountability. Maybe they don’t want to try new things. Maybe they don’t want to live in a new business model. Maybe, just maybe, they wouldn’t be willing to put money on the table for the things they write and say because they could be proven wrong. Maybe just maybe the powers that be are terrified of changing the incentive models because if they do, doesn’t that mean the general public will start having expectations they can’t honor? And all that consent they manufacture with the mainstream media starts falling apart? Oh, we can’t allow that, now can we?
But what the hell do I know? This is what elite people do: they say you’re not qualified, they say you don’t know what you’re talking about, and they tell you to trust them. Then when you ask, "Okay, but what structure, system, or process are we going to put in place so that I know you’re being objective?" they say, "How dare you ask?" and start personally attacking you. That’s how you know you’re on the right road; you’re on the right trail because people get scared real quickly when you want to change things for the better. They make money from the worse—that simple.
So it’s a great conversation to have about how we get objectivity in journalistic integrity. I’m glad this discussion is underway, and people know it. Because if anything, it’s going to make you a better consumer, and it’s also going to make you ask something very fundamental: how do you actually know it’s true? What skin do they have in the game regarding the claims they’re making? What consequences do they have if those claims are wrong?
Not a comfortable world for those who lie for a living, huh? And as Paul Harvey would say, now you know the rest of the story. Thanks, everyone. We’ll talk soon.
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