Cardano founder Charles Hoskinson recently went live on Twitter to discuss the bankruptcy of crypto exchange Genesis and how parent company Digital Currency Group may sell its media arm, CoinDesk. His expressed interest in buying the company has journalists nauseous.
Hoskinson hadn’t “seen any books or financials,” but estimated it would cost around $200 million to buy the crypto news outlet. “Why am I interested in an asset like this?” he asked during the livestream. “For years I’ve thought about what would make an elite media institution and […] the things required.”
“I would like to figure out how to get back to journalistic integrity,” Hoskinson said, proceeding to discuss his belief in ‘veracity bonds.’
Hoskinson’s future of journalism: Like now, but worse!
What if journalists actually paid you for the opportunity to write articles for your consumption? What if people were financially incentivized to downvote an article? What if all of this was good for Cardano?
Welcome to Hoskinson’s version of journalism, in which ‘veracity bonds’ are meant to hold journalists accountable to the ‘truth.’
“When someone publishes something, the thing that they publish, they actually put money on the table,” he explained in the 12 minute live video on Twitter. “If it turns out that the thing that they’ve written isn’t true or is inaccurate, they actually can lose the money that they’ve bonded.”
It would be difficult to find any journalist willing to work under the strange conditions that Hoskinson described, in which every article would be an NFT and there would be a “financial incentive to fact check the fact checkers.” Indeed, it’s difficult to uphold ‘truth’ when it’s determined by easily-rigged online sentiment — one where those with the most money maintain the most influence, and one where those elite few own the news outlets anyway.
The second half of Hoskinson’s new business plan is to “give the top 100 blockchains a space to write whatever they want about their ecosystem.” In case this needs explanation, that’s not how the news works. This closely resembles a DIY public relations firm rather than a truth-seeking organization.
Can Hoskinson afford CoinDesk?
Hoskinson feels slighted by CoinDesk, and perhaps every media outlet in general. “As you know, we’ve [Cardano] been a recipient of some extremely bad media — some just because they didn’t take the time to really research and deeply get into things, and some because there was actually an agenda to defame.”
In Hoskinson’s version of reality, every negative article about Cardano has either been due to lazy journalists or those so fired up to defame Hoskinson at any cost because… well… just ’cause.
So, in the spirit of lazy journalism, I’ve decided to rely on a Forbes article from 2018 which estimated Hoskinson’s net worth to be around $500-600 million. The metric isn’t totally unreliable – Cardano is worth about the same now as it was then.
Anyway, this is a lot of money! Hoskinson himself made sure to mention he’s “still one of the richest guys in the space” during the livestream. Great, and hats off, but $600 million is nothing when you’re purchasing a $200 million entity.
Indeed, Hoskinson would likely have trouble selling his cryptocurrencies and other illiquid assets to have enough cash to buy CoinDesk outright. It’s probably not worth the risk.
However, an attempted purchase with the help of outside investors wouldn’t surprise me, similar to how Elon Musk sought the help of Larry Ellison, the Saudi royals, and Binance chief Changpeng Zhao (CZ) to acquire Twitter. Of course, this would dilute Hoskinson’s control a bit, but it would provide him with the ability to make day-to-day decisions and take CoinDesk in a new direction.
CoinDesk deserves better
I have no doubt about the integrity of many journalists at CoinDesk. They broke the FTX story and essentially caused the bankruptcy of Genesis to happen sooner rather than later. They’re a talented group that deeply care about reporting the truth.
It’s a real shame 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.
I spoke to numerous journalists and editors, within and without the cryptocurrency industry, about Hoskinson’s dream of buying CoinDesk. There was a collective revulsion and a broad agreement that he doesn’t know anything about journalism.
But Hoskinson needs us all to know that he can afford it if he “really wanted to.”
Cool, Charles. Very cool. Just promise you won’t.