Worse than trolls

Our weekly opinion piece and overview View this email in your browser   CoinDesk Weekly is sponsored by  June 3, 2018 Crazy train   The combination of social media's rise as a primary source of market information and the proliferation of different crypto coins has created something worse than trolls: Monetized trolls. Read more in THE TAKEAWAY below.   TOP TRENDS ON COINDESK Countdown to EOS By the time you read this, Block.One may have finally published the code for the $4 billion EOS project, nearly a year after the team began raising funds. But as of this writing, it's unclear exactly when the hotly anticipated new blockchain network will actually launch. For the curious but perplexed, CoinDesk's Brady Dale has written a handy guide to watching the historic event unfold in real time. The week leading up to the event has been a nail-biter. First, an internet security research firm said it had found "a series of epic vulnerabilities" on the EOS platform. Within two days, EOS said it had patched most of the reported bugs and that it expected the mainnet launch to stay on schedule. Another issue is governance, or more specifically how members of the community can participate in it. In EOS' "delegated proof-of-stake" model, users with wallets can vote for the 21 validators that will serve as the rough equivalent of bitcoin's miners. But the voting process is opaque – unless, perhaps, you're a coder who's not intimidated by command lines.  If successful, EOS could become a formidable competitor to ethereum, which is one reason there's so much excitement about the project. But there's still a lot that could go wrong, and CoinDesk will be monitoring the situation closely as it progresses. Check our Twitter feed for the latest updates. All this uncertainty appears to have put a damper on pricing of the placeholder EOS tokens that run on top of ethereum – they've been trading in a narrow range. As a reward for bearing with the drama, though, EOS holders can expect airdrops of various other tokens built on top of the new network. Lots of them. Whether that's the digital equivalent of free candy or junk mail is perhaps a matter of taste. See all CoinDesk stories ⭐ CoinDesk Weekly Sponsor ⭐   Your Data. Your Life In the current system, your personal data is sourced, held, used and swapped by third-party providers. The Pillar Project is an ambitious project to return ownership of personal data to you. We do this through decentralized blockchain technology, starting with a token wallet. Learn More QUOTE OF THE WEEK "It's just a circular maelstrom of money." – VC Meltem Demirors, on how crypto startups and investors end up putting money into each other, rather than attracting new capital. THE TAKEAWAY Michael J. Casey is the chairman of CoinDesk's advisory board and a senior advisor for blockchain research at MIT's Digital Currency Initiative. OK, Ardor fans. You have your wish. Your favorite token is getting a mention on CoinDesk.  Not, perhaps, for the reasons you want. But they do say all publicity is good publicity. So there you have it.  The response to my column last week on Layer 2 solutions was mostly positive with the usual dose of critics. But it was the Ardor tribe who caught my attention when one reader's tweet complaining that I hadn't mentioned that next-generation blockchain platform prompted others to pile on with accusations of my bias and ignorance. It got me thinking about how financial self-interest, which has always skewed people's perceptions of the media they consume, is taken to a new level when crypto tokens are involved. I do believe blockchain technology and related ideas around prediction markets and reputation will one day help us sort through the free-for-all of competing truths that the social media age has produced. But for now, I worry that all we're doing is creating a global brawl of angry people, all believing that they and only they own the truth.  This is really not about Ardor. (From what I can tell, Ardor's framework for enabling "child chains" makes an interesting contribution to the evolution of crypto technology.) What this is about is how people invested in the multiple tokens attached to competing projects that similarly claim to be making some quantum leap in blockchain capability come to passionately believe that theirs is superior to everyone else's and deserves more prominence than it's getting. In Ardor's case, it's the holders of the main platform's ARDR token as well as those invested in the child chain Ignis token. But I could just as well be talking about holders of ETH, XRP, IOTA, BCH and yes, BTC.   Fanatical, blinkered investors are nothing new, of course. It once was the case with GE's shareholders – definitely, not any more. It's always been so for investors in Warren Buffet's holding company, Berkshire Hathaway, and in this past decade we've seen it with Tesla. But there are two factors that make the phenomenon more extreme in the age of cryptocurrency.  The first is the sheer volume of coins and the large retail investor base they attract.   The second is that social media is now the primary means by which market-relevant information is distributed. And social media, for better or worse, is essentially anarchy.  Combine these two and you end up with something worse than the troll armies that already cause such public angst around social media. You get monetized trolls.  The scammiest way this plays out is with bots. Bailey Reutzel's great little survey of some classic spam bot moments in "Crypto Twitter" shows how distorting the combination of crypto and social media can be. But there's also lots of human-led ugliness: anonymous trolls disrupting healthy dialogues with ad hominem attacks and coin-pumping tweets filling our news feeds.  Now I believe that, eventually, anarchic social media might evolve to point where it's far superior to the traditional media model that preceded it.  And as I mentioned, blockchain-based "proofs" and skin-in-the-game staking systems might one day help us sort through this mess.  Under the old, centrally-managed system, where news organizations filtered the important public information before it reached its intended audience, there was an inherent constraint on the amount of information available. And there was an access problem.  So, just as ICOs have shown how access to capital might be democratized, one could argue that social media has also created a potentially more democratized model of access to publishing systems. (I say "potentially" because in many respects what has happened is we've shifted power from the old news establishment to a new form of media behemoth: the follower-rich celebrity – think Donald Trump, or Justin Bieber.) However, with no viable, decentralized mechanism as yet for rewarding honesty and good behavior, or for processing information so that some kind of consensus can be formed around it, we're left with noise. Worse, there's a broken feedback loop in which metrics such as the market cap of a token or the followership of a social media account reinforce and confirm people's biases. We saw it with the XRP mob that jumped on the New York Times' Nathaniel Popper after he cited bankers saying they weren't using the token associated with Ripple. The mob was unleashed, ironically, by a former co-editor of Techcrunch and now vocal Ripple fan – Michael Arrington – who vehemently claimed that Popper must have made up his quotes. The swarm of XRP fanboys was unmoved by the logic that for a reporter at the Times to do such a thing would be professional suicide – read about Jayson Blair for background on this.  Or there's the IOTA gang that collectively pumped out an alternative narrative that my colleagues at the MIT Digital Currency Initiative who'd discovered flaws in IOTA's hashing algorithm were conflicted by business interests. Or the gang of ethereum supporters who took as gospel truth Vitalik Buterin's claim that CoinDesk is complicit in enabling crypto scams. Attacks on the press have happened for as long as it has existed. That's not a bad thing per se. Any functioning society maintains a vigorous critique of media organizations. Some form of bias is unavoidable in media coverage. It deserves to be questioned.  But news organizations are no longer the all-important filters they once were. They represent one, increasingly small sector of a vast array of sources claiming to offer relevant information. And unlike those other individual and corporate sources, news organizations – the good ones at least, those that can get beyond their owners' and their advertisers' interests and practice sound journalism – shouldn't be captured by the same heavily financial biases.  So it's disturbing that we've gone from discovering Facebook's #fakenews problem to the appropriation of that term by those who peddle the view that mainstream media is the main source of disinformation, to the even more extreme scenario in which a market for information is composed of participants with tokens whose value they want to protect.  If we're going to tokenize everything, which may or may not be a good idea, this cacophony of competing truths peddled by different self-interested mobs will likely get even worse. What happens when celebrities and companies and dictators have their own coins, with armies of rabid supporters doing their bidding in this battle for truth? Decentralized solutions to this are still a long way off. I'm not totally sure how we stop this train for now, except to make a plea formed by my own, unavoidable pro-journalism bias. I humbly ask that people in the crypto community have a little more respect for journalists who, while far from perfect, are at least trying to produce news and content that's not skewed by their or anyone else's investments. Without them, what have you got?  – Michael J. Casey Share Tweet Beyond CoinDesk...   OTHERS ARE TALKING ABOUT A hospital in Scotland has opened "a rehabilitation program for people hooked on trading digital currencies like bitcoin," MarketWatch reports. Perhaps this condition should be called moon-o-mania, or maybe Lambo fixation disorder? The New York Times has an investigative piece on Envion, a $100 million ICO project that was supposed to be "among the more legitimate outfits " but has fallen into disarray.  Reason magazine offers a guide to using bitcoin anonymously, part of the libertarian publication's "burn after reading" issue, which also includes how-tos on building a Glock, spying on your spouse and editing genes at home. Sounds like a fine way to spend Sunday afternoon.  For a more mainstream (or, perhaps, Beltway) perspective, the latest issue of the IMF's quarterly magazine Finance and Development includes think pieces on monetary policy in the age of digital assets and the frothiness of the crypto markets. WHAT WE'VE BEEN UP TO Missed our webinar on the state of global ICO regulation? Listen to the replay here. We're taking Consensus on the road. Join us on September 18-20 at the Marina Bay Sands in Singapore for the first international Consensus event. Register here. Send feedback on this newsletter to marc@coindesk.com. Follow @CoinDeskMarkets for price updates and market analysis. And everyone interested in keeping up with this rapidly evolving field of technology should follow our main Twitter handle, @CoinDesk.    Thanks for reading! Until next week... Copyright © 2018 CoinDesk, All rights reserved. You're receiving this email because you subscribed for updates on our website. Our mailing address is: CoinDesk 636 Avenue of the Americas New York City, NY 10011 Add us to your address book Want to change how you receive these emails? You can update your preferences or unsubscribe from this list Received this from a friend? Subscribe here. Share Tweet