What Bitcoin means for Journalism

Journalism needs a business-model that squashes free-riders like myself.

“Journalism is dying.”

It’s often said about the industry; and it’s been said about the industry for quite some time now.

Journalism is dying quite the drawn-out death. The Editor of The Telegraph, Chris Evans, said in a talk not too long ago that fake news has actually revitalised the profession by causing “renewed doubt”. However, there is still a hacking cough going around – the industry’s financial losses are evident. Generally, paper circulation has been on a downward trend, the worst example being the now half-comatised Independent, where daily circulation declined 85% between 1990 and 2015. There is no consensus on the solution to failing revenue, but the most widely employed tactic seems to be the subscription format, with The Economist, The Spectator, The Times, The Telegraph, The Financial Times, and The Wall Street Journal, all using some sort of paywall. Yet, and with the possible exception of the last, this solution has not tended to work very well. Although there may always be a place for journalism, there may not always be a profession for journalists.

The internet scuppered things for them. I can write my opinion on here, for free, and anyone can read them, and although most won’t read me, some, I trust, will. The proliferating blogosphere means that MSM need new strategies to grab the reading public’s attention and money. Interestingly, The Guardian does not use paywalls, and has adopted a very different strategy, a strategy which undercuts everyone in order to compete. Instead of denying readers online content, The Guardian appeals to your conscience whenever you use their site, and asks you for donations. This embrace of the digital age has been quite successful, and in recent years they’ve reportedly cut their financial losses. However, and despite Editor Katharine Viner’s claim that this has not come at a cost as they don’t do clickbait, it is obvious to everyone who follows them on Facebook that they do ‘do’ clickbait.

News is going the same way as movies, and movies have gone the same way as music. We are now used to getting them for free. So, apart from taking us by the scruff and forcing us to grow up, what kind of business-model will allow journalism to subsist without it having to sell its soul to the lowest common denominator?

Bitcoin might provide the answer on how best to monetise journalism. What exactly is Bitcoin? By my best approximation, Bitcoin is a decentralised means of online value transfers – the payments are direct from one party to the other and the middle man (ie. a bank) is cut-out entirely. Hypothetically, if we used Bitcoin, everyone could buy their news on the internet as easily and as quickly as when we use our contactless-cards. No more details to type-in. You tap; you buy. While such frictionless transferring would boost GDP, it does seem slightly needless on a general level (contactless cards didn’t revolutionise my life). However, in this specific case, it could seriously change the way we consume online news.

When shopping on Amazon, the basket system works well, but you cannot ask people to create news-baskets and expect them to want to pay for it a week, or even an hour, or even a minute, later; oftentimes it’s no longer news.

The Bitcoin Model:

I don’t know what the cost of reading a single online article would be. I surmise that it would be less than 10p. The price would depend, of course, on the outlet and on the form of journalism (features costing more, news items less, etc). What it would mean in practice, though, is that you could go to work and without realising pay per piece of journalism consumed during your 45minute-ish commute. The beauty in this model is that it would reflect how much each consumer values his or her news. While you’re reading away you wouldn’t think about the fact that you’re paying for news, because you’re only paying pennies, but once you add up all those pennies, the resulting bill would be entirely in-keeping with the quantity and quality of the content you’ve consumed.

For this quixotry to work and for journalism to be without subscriptions, without advertisers even, a critical mass of people would need to be using Bitcoin everyday. Obviously, this is not the case at present, and currently even the fluid option of PayPal would not be an incentive enough for this to work. Not one entered detail will be suffered; frankly, who has the second to spare? But one day everyone might be using Bitcoin, and if that day ever comes, if Bitcoin Wallets are as second nature to us as our Credit Cards, then websites will be able to keep their ‘click-here-to-read-more’ button while also insisting that readers part with 2p for the privilege.

Ostensibly, Bitcoin seems a safe bet to one-day achieve this societal transformation. Firstly, it needn’t be that people give up national currencies and switch en-mass to Bitcoin, it need only be that banks take the admittedly unlikely (but not unimaginable) decision use bitcoin as an asset on which their currencies depend – what Warren Webber has called the ‘Bitcoin Standard’ (theoretically speaking, it’s like The Gold Standard, no institution can govern the creation of new money, but the randomness of material discoveries would be replaced by a random-generating algorithm). Secondly, even if Bitcoin was only ever used as a currency, if enough people traded with it then it might still be safe enough to be considered lucrative in the long-term. The security of Bitcoin is supposedly guaranteed by Miners around the world, who automatically take note of and add every single transaction to a public ledger called the ‘blockchain’. Each block of transfers builds on the previous block, linking them together, hence the name; and every time the chain is extended the security of all blocks increases, because if someone was to manipulate one block, they would manipulate all the blocks, and thus the whole chain would have changed, making an easy spot.

However, Bitcoin will probably not save journalism. Why? – because it seems inherently unstable. Where did that jump come from? How about that plague of Ponzi schemes? And what about all that ICO maddess, what? I’m reminded of the words of Matthew McConaughey in his role as a stockbroker in The Wolf of Wall Street: “It’s fugasi, a fugazi, it’s a wahzy, it’s a woozy; it’s wphhhh-fairy-dust.” And the future must be reckoned with too. New research from the National University of Singapore estimates that the advancement of quantum computers could, as early as 2027, change the game in terms of computer power. If so then the security provided by Miners who generate more computing power than the world’s top 500 supercomputers combined; could be made suddenly redundant. And even if Bitcoin is not manipulated from the outside, it could be manipulated from the inside. According to a study by Eyal and Sirer, all it would take it is for approximately 25% of Miners to club together and force an economic takeover. But they wouldn’t do such a thing, so the claim goes, because it’s not in their interest since they invested so much in Bitcoin in the first place. So, the Bitcoin defence rests on human rationality – hardly convincing. And if human phycology fails us, then not even governmental supercomputers can save us, because, as it’s been said, Miners would have a monopoly on computing power. Hoisted, somewhat, by our own petard.

So maybe Bitcoin isn’t journalism’s saviour… but Bitcoin 2.0? Maybe whatever comes next will be the thing that we buy into. And we would all need to buy into this thing, post-beta test, if this monetising doozy is going to work. The business-model needs a critical mass of everyday users, something which could be achieved, because the supposedly technophobic older generation isn’t not going to switch over to cryptocurrency on a point of principle. What the business-model would need is for governments to engage productively with cryptocurrency… which, rightly or wrongly,  might not happen for a long time. For western democracy, though, it might be essential that government does take this thing seriously eventually – not because Ethereum is going to give us digital democracy – but because for democracy to survive, professional journalism needs to as well.