Category Archives: Sociotechnical

Fixing Journalism? Two Approaches

Everybody knows that journalism is in crisis. It turns out that the Internet lowered the cost of delivering information to the point that anyone can play the role of journalism. Anyone. For any reason.

Worse, as the information economy has been increasingly captured by the advertising industry, all other interests have been obliterated. Everything is subordinated to the need to command a large enough audience to generate revenue for advertisers. We now have a word for this, “click bait”.

At the same time, the idea of “mass” media has been replaced with individually filtered channels. It isn’t necessary to serve a least-common-denominator, each person receives a custom stream, potentially different from any other. This has shattered cultural consensus that, for better or worse, was a side-effect of mass media.

These developments have had pernicious effects everywhere, but the destruction of quality (or even mediocre) journalism is particularly damaging to civil society and democratic government.

Scarcely a week goes by without hearing about some new effort to “save” or “reboot” journalism. Shorn of marketing hype, these ideas are basically about money. How can you sustain the activities of journalists or equivalent content creators?

There aren’t many candidate solutions, and they are all pretty much the same ideas as sustained print based journalism.

  1. be a captive propaganda organ
  2. advertising
  3. subscription

Setting aside the “ministry of truth” approach favored by political groups, let’s look at two recent examples of the other approaches.

Civil: Self-Sustaining Journalism

One diagnosis of journalism’s malaise is that they need to adapt to the new world of on-line advertising and the accompanying need to “attract eyeballs”. Conventional journalistic organizations must be rebooted for this new world.

There are many versions of this, but one interesting concept comes from “Civil”, which not only aims to fix journalism, but uses trendy blockchain technology to do so.

The goal is “is a self-sustaining global marketplace for journalism that is free from ads, fake news, and outside influence”. Wow!

One of the key insights in this approach is to view the goal as a global marketplace for journalism, which eschews notions of a special fourth estate with a critical role in democratic self-governance. From this point of view, journalism is one kind of content, and it has to compete in a global marketplace filled with lots of other content.

In one sense, this is essentially conceding defeat. Journalism is over, so we’ll reuse the term for journalism-like content.

Their promised solution sounds too good to be true. Somehow this global, unregulated market will be free of influences, and “self-sustaining” without ads. How will this work?  Magic.

The magic is blockchain based “autonomous” organizations. This technology replaces a conventional organization with code, and, most important, aims to replace the critical functions of journalism with “autonomous” processes—protocols that are not controlled by any person.

So, Civil proposes a suite of processes that they believe replace everything important from conventional journalism,  and avoid costly overheads and intrusive outside interest.

Who are the stakeholders in the journalism game? At the heart, there are journalists (“sellers”) and citizens (“buyers”). There are  funders, owners, advertisers, and sponsors.

But the critical piece that makes it journalism rather than entertainment is quality control, selection of topics, honest investigation, and careful fact checking. In a conventional organization, this role is performed by editorial staff and other managers, who exercise power with judgment.

The ‘Civil’ project eliminates all of these players except the producers and consumers.

Civil aims to create a marketplace model for journalism where citizens and journalists connect around shared interests and standards.

This is both technologically and organizationally identical to many other Internet markets.

The Civil project diagnoses the weakness of this “Amazon” model as being the ease with which “anonymous black hats to cheaply produce and spread fake, malicious content in pursuit of clicks-for-cash ad dollars or nefarious propagandist aims.

Their solution is inspired by Wikipedia, and seeks to “incentivize journalism” while defeating non-journalistic behavior. In their analysis, the way to do this is to create a cryptocurrency and use it to implement micropayments. It’s a bit more complicated than this, because they want to encourage more than just personal payments. They want stable channels of information with strong quality or at least reputation for quality.

Their design has three pieces:

Newsrooms” – “Newsrooms allow citizens to pool funding to support coverage for a specific topic. The more citizens, the more funding, the more journalists will be drawn to cover it.”

Stations” – “Stations allow journalists to productize and price their work to their own dedicated audience however they want”

Fact-checking-as-a-service” – this is crowd sourcing of the editorial role.

These ideas are to be implemented with Ethereum-style “smart contracts”, creating protocols for buying and selling content, as well as voting, penalizing ‘inaccuracy’ and other activities.

The two “innovations” here would have to be the “newsroom” and the “fact-checking-as-a-service”. (“Stations” are indistinguishable from many other digital channels, including this blog.)

The Newsroom concept is an interesting take on how journalism is supposed to work. The idea that journalists should cover what “people” want them to cover is, well, problematic. There are lots of things I don’t want to know about (e.g., wars), but I need journalists to tell me about it. The idea that journalistic coverage should be driven by customer demand is pretty poor journalism.

The “Fact-Checking-As-A-Service” is even more problematic. This concept replaces the efforts of editors and quality control staff with an unspecified crowd sourcing. They don’t explain how this might work or even what it does.

First of all, “fact checking” is only the first level of journalistic quality controls. A report can be 100% “accurate” and still mislead by omission or bias. For that matter, much of the “fake news” is based on interpretation and even “alternative facts”. If there are multiple “fact checkers” who give different rulings, how does that help?

Second, actual quality control is far more than just double checking names and dates. Tracking down alleged events and sources isn’t trivial. More important, judging the weight to give various sources is hard. In this, journalists act as trusted sources of information, and we implicitly trust their sources because we trust them. Replacing this chain of trust with a “trustless” system is dubious.

As an aside, I’ll point out that the best journalists are not “incentivized” by money. They are motivated by a desire to be a trusted source of information. And the best of them report on things that no one wants to know about—and they make us care whether we want to or not.  Thus, the incentives of this system are probably misguided from the start.

The bottom line is that “Civil” is almost a caricature of the cryptocurrency culture. They aim to “fix” journalism, but they seem to misunderstand what it is, and misdiagnose its ills. Not surprisingly, the proposed “fix” is problematic, and unlikely to work.

The Conversation

“The Conversation” offers a rather different “fix” for at least part of the same problem. The conversation is a not for profit enterprise, dedicated to promulgating reliable, fact-based information.

Provide a fact-based and editorially independent forum, free of commercial or political bias.”

The Conversation is responding to the challenges described by Civil. They also perceive a disconnect between universities and the public. Universities are repositories of knowledge, but that knowledge is poorly represented in journalism.

The Conversation sees itself as a source of trusted information dedicated to the public good.

In contrast to Civil, The Conversation does not rely on a “market” to “incentivize” their producers. For one thing their writers are already highly motivated. What they do focus on is careful editing, which is not just ”fact checking”, but also helps create clear, understandable information for non-specialists.

Above all, The Conversation is aiming to create trusted and trustworthy information. They enforce strong rules on transparency, including disclosure of financial interests. The authors are not paid in cryptocurrency or anything, and the content is open for anyone to reuse under Creative Commons Attributions-No Derivs (CC BY-ND). This license preserves the attribution and precludes modification of what the author said, which are necessary to maintain both the trust of the readers and the reputation of the writers and editors.

In short,  “We aim to help rebuild trust in journalism.”

The content is not driven by user demand, it is curated by The Conversation. They are looking for people who know a lot about a topic of public interest, who want to inform the public about it.

Authors must agree to “Community Standards”, which amount to straightforward rules of civil discourse: mutual respect, staying on topic, be constructive, be responsible. It is interesting that one of the rules is “Be You”. No anonymous or pseudonymous posts allowed: you must take personal responsibility for what you say.

Articles are “pitched” to the staff, and if selected an editor is assigned to help create the article. The editor is not a “fact checker”, she or he is a co-creator,  charged to help design the article to be valuable for the general audience.

The published article will include the name, qualifications, affiliations, and funding sources of the author. In this, they are taking practices from academic publishing out to general readers.

The content is free for readers, and available for republishing. No one is writing to make money, but there is plenty of reputation on the line.

One reason this works is that the contributors must be affiliated with an academic institution. Aside from filtering out complete fakes and robots, this means that the authors have their own funding, and generally have a mission to publish. The Conversation doesn’t need to “incentivize” with a starvation wage.


These two (of many) efforts to “fix journalism” offer an interesting comparison.

Both Civil and The Conversation say that there is a crisis in journalism, and describe the illness in similar terms. But these two projects diagnose the underlying disease rather differently, and therefore prescribe different treatments.

Civil is concerned with the financial underpinnings of journalism, and seems to be mainly interested in coverage of current events, especially local events. They seek to use digital technology to create a more efficient, decentralized funding model. Specifically, they use trendy blockchain technology to design “markets” that replace the processes of journalism.

While Civil deploys “disruptive” technology, it’s processes aren’t especially novel, nor even that different from conventional practice. The main novelty is the replacement of editorial decision-making and quality control with market incentives and rather hazy notions of “fact checking as a service”.

The Conversation is concerned with creating better content in ways that are distributed as widely as possible. They are particularly interested in disseminating the deep knowledge accumulated at Universities to the general public.

The Conversation is focused on trusted information. As such, quality control is at the center of the solution, and incentives are aimed to support public interest, not market share.

The Conversation uses digital technology (of course), but musters motivated people from the existing pool of academic researchers who have a desire to support the public good. Authors are not paid, and the content is given away for free. Editors, on the other hand, are paid. If there is a market, it is a reputation economy.

It is notable that The Conversation has been operating for a number of years. No one is getting rich, but there is a lot of solid journalism being made. In that sense, it is a proof by existence.

Civil, on the other hand, is untried as yet. The blockchain technology it aims to use is not only new, it is extremely shaky.

My own view is that Civil’s approach to journalism exhibits fundamental misunderstandings and even a repudiation of what journalism actually used to be. Editors have always been aware of market forces, but are supposed to act as a buffer between producers and raw demand. That is, editors want to foster solid reporting, even if there is no immediate “demand” for it, and they want to report accurately regardless of what the customers want to hear.

Editorial staff does fact checking, but fact checking per se is only the most trivial aspect of quality control. In any case is neither an optional after market service, nor something that you choose to match your own prejudices.

I think that The Conversation’s focus on trust is a great idea, and I’m glad to see it working. On the other hand, The Conversation is focused on a small part of the problem with journalism, which is the poor use of expert knowledge. This problem has been around for decades in the form of anxiety over the challenges of disseminating scientific understandings.

The Conversation works because it uses already existing social mechanisms, specifically, the credentialing and public mission of Universities. These institutions are designed to create trusted information and conduct civil discourse. The Conversation extends the reach of these processes.

However, the entire enterprise of public universities is increasingly threatened by both cultural attack and politically motivated defunding. The Conversation only works if you think that University affiliated experts are trusted sources, and that belief is far from universal. A lot of “fake news” is simply nihilistic denial of expert opinion, and no amount of editing can overcome the will to deny.

The bottom line is that neither of these projects is much of a cure for journalism. The Conversation does a good job, but depends on the fate of academia and rational debate in general. Civil misunderstands journalism, and attempts to fix the problem of trusted information via “trustless” technology and market forces. Whatever Civil is doing, it isn’t good journalism.

  1. Civil Civil: Self-Sustaining Journalism.June 20 2017,
  2. The Converstaion. The Conversation: In-depth analysis, research, news and ideas from leading academics and researchers. 2017,


Cryptocurrency Thursday

IOTA’s Cart Is Way, Way Before the Horse

Earlier I commented on SatoshiPay microcrasactions switching from Bitcoin to IOTA. Contrary to early hopes, Bitcoin has not been successful as a medium for microtrasactions because transaction fees are too high and latency may be too long.

IOTA is designed for Internet of Things, so it uses a different design than Nakamoto, that is said to be capable of much lower latency and fees. SatoshiPay and other companies are looking at adopting IOTA for payment systems.

The big story is that IOTA is reinventing Bitcoin from the ground up, with its own home grown software and protocols. I described it (IOTA) as “funky” in my earlier post.

It is now clear that this funkiness extended to the implementation, including the cryptographic hashes used [1,2]. This is not a good idea, because you generally want to use really well tested crypto algorithms.

So when we noticed that the IOTA developers had written their own hash function, it was a huge red flag.

Unsurprisingly, Neh Haruda reports that their home grown hash function is vulnerable to a very basic attack, with potentially very serious consequences.

The specific problems have been patched, but the fact remains that IOTA seems to be a home made mess of a system.

Narula also notes other funkiness.  For some reason they use super-funky trinary code which, last time I checked, isn’t used by very many computers. Everything has to be interpreted by their custom software which is slow and bulky. More important, this means that their code is completely incompatible with any other system, precluding the use of standard libraries and tools. Such as well tried crypto libraries and software analysis tools.

I have no idea why you would do this, especially in a system that you want to be secure and trusted.

The amazing thing is not the funkiness of the software. There is plenty of funky software out there. The amazing thing is that lots of supposedly competent companies have invested money and adopted the software. As Narula says, “It should probably have been a huge red flag for anyone involved with IOTA.

How could they get so much funding, yet only now people are noticing these really basic questions?

It is possible that these critiques are finally having some effect. Daniel Palmer reports that the exchange rate of IOTA’s tokens (naturally, they have their on cryptocurrency, too) has been dropping like a woozy pigeon [3].  Perhaps some of their partners have finally noticed the red flags.

The part I find really hard to understand is how people could toss millions of dollars at this technology without noticing that it has so many problems. Aren’t there any grown ups supervising this playground?

I assume IOTA have a heck of a sales pitch.

Judging from what I’ve seen, they are selling IOTA as “the same thing as Bitcoin, only better”. IOTA certainly isn’t the same design as Bitcoin, and it also does not use the same well-tested code.  I note that a key selling point is “free” transactions, which sounds suspiciously like a free lunch. Which there ain’t no.

IOTA’s claims are so amazingly good, I fear that they are too good to be true.

Which is the biggest red flag of all.

  1. Neha Narula, Cryptographic vulnerabilities in IOTA, in Medium. 2017.
  2. Neha Narula, IOTA Vulnerability Report: Cryptanalysis of the Curl Hash Function Enabling Practical Signature Forgery Attacks on the IOTA Cryptocurrency. 2017.
  3. Daniel Palmer, Broken Hash Crash? IOTA’s Price Keeps Dropping on Tech Critique Coindesk.September 8 2017,
  4. Dominik Schiener, A Primer on IOTA (with Presentation), in IOTA Blog. 2017.


Cryptocurrency Thursday

Study of Trust in Fact-Checking Services

Petter Bae Brandtzaeg and Asbjørn Følstad write this month about Trust and distrust in online fact-checking services [1].

Everyone knows that the Internet is a perfect medium for disseminating information of all kinds, including rumors, errors, propaganda, and malicious lies. Social media have proved to be just as susceptible to misinformation, despite it’s filtering mechanisms (which are problematic in other ways).

One response to this flood of junk information is a proliferation of “fact-checking” services, which attempt to verify claims in public statements using primary and secondary sources.

The very fact that there are 100 or more such services would seem to be significant, though I’m not sure what it means exactly. This must be the ‘golden age of fact-checking’.

Bae Brandtzaeg and Følstad point out that a fact-checking service depends on establishing a reputation and the trust of users. In particular, what matters is how the user (consumer) perceives the service. There isn’t much point to a “fact checker” that you don’t believe is accurate and honest.

Their study analyzed social media discussion of selected widely used fact checking services. This data is unstructured (so say the least!), but does represent unfiltered publicly stated opinions about the fact-checking service by actual users. These sentiments were coded for statements about “usefulness” and “trust”.

One of their findings is that negative comments were often about “trust”, which positive comments were about “usefulness”.

Many negative comments complained about perceived bias in the service, which is certainly consistent with the vast research that indicates that people do not readily change strong opinions in the light of facts. In this case, they dispute the motives of the messenger, rather than their own opinions.

Positive comments about the “usefulness” indicate that the service may have achieved enough trust (or congruence with preconceptions) that the information influences the user’s opinion. This is consistent with the idea that someone who is both skeptical of a claim and trusts a fact checker will find the check useful.

The authors note that there may be a great need and desire for fact checking, but most people don’t use it. (For example, me.) If nothing else, the perceptions of these systems might well evolve if they are more widely used.

The authors point out that for many users the distrust in the fact checking service isn’t really specific to the behavior of the service itself, it is a distrust of everything. A very general disbelief in society is often highly emotional, so services should take care to present themselves in ways that try hard to engender trust.

lack of trust extends beyond a particular service to encompass the entire social and political system” (p. 70)

The long and the short of it is that fact checking needs to be highly transparent. Trust is created by knowing who is “checking” and how they do it. The authors also suggest that reliance on “expert” opinion should be minimized, and that “crowd sourced” verification may be especially useful.

Reading about this study, I am struck by the contrast with the widely held dogma of “trustlessness” of the cryptocurrency and blockchain world. Nakamotoan blickchains are a cure for everything, including fake news, some say.

It is thought that these “trustless” systems “can’t be evil”. Furthermore, in a medal winning rhetorical judo throw, the anonymous (or at least unaccountable) blockchain is considered “transparent”. Some even explicitly imagine that such “trustless” systems can fix journalism (generally through “market based” processes).

The Brandtzaeg and Følstad study makes pretty clear that the key to trustworthy information is transparent and accountable processes. I don’t see how you can hope to build trusted information on a foundation of “trustless” technology. Frankly, I think blockchain and other technologies are largely irrelevant to the problem of “fake news”.

Finally, I note that “trust” is an end-to-end property. People trust people. The technology in between the two people is relevant only to the degree that it obscures or enhances the ability of people to trust each other.

The challenge is that digital technology is naturally opaque and it is easy to be deliberately deceptive. In order to be trusted, a digital service must work hard to make clear to the human users who the human and other sources really are, and what their motives really are.

This is surprisingly difficult, and I think that “trustless”, peer-to-peer systems make it even harder to establish this trust.

  1. Petter Bae  Brandtzaeg and Asbjørn Følstad, Trust and distrust in online fact-checking services. Commun. ACM, 60 (9):65-71, 2017.

More Blockchain Use Cases

For the past few years, we’ve been hearing about all the amazing things that Nakamotoan blockchains could be used for(e.g.,  [2]). As the technology matures, reality has been sorting out what is likely to work and what isn’t.

This week Jonathan Keane writes about “5 Apps Already Being Built on the Decentralized Web”. Specifically, he’s talking about applications that are using Blockstack which is a software layer that manages cloud storage. Blockchain manages identity and metadata, and all data is encrypted. Essentially, this replaces a conventional database with encrypted records accessed through a decentralized blockchain.

The overall goal of this decentralization is to eliminate censorship (and tax collection). They think that “major internet players wield too much power over users, and this is exactly what Blockstack was created to disrupt.” One founder went so far as to assert that with blockchain technology, it’s not “don’t be evil”, it’s “can’t be evil”.   (Obviously, this is true only for certain values of “evil”.)

Keane gives an optimistic view of this technology which has attracted some investment and has a number of applications cooking. His list gives us another reading on where blockchain technology may actually be used.


This system is actually operating. It is a clone of Silk Road and other market places, which provides wide open market for anything. Openbazaar actually only uses one part of OpenStack, though who knows. This is a classic Nakamotoan use case, making the world safe for money laundering and illicit commerce. How this isn’t “evil”, I don’t really see.


Casa aims to be a clone of AirBnB, paid via Bitcoin. It’s not clear what the business model is, exactly, but they aim to compete on price: blockchain is cheaper than corporate servers. Whether they can catch up to AirBnB’s massive user base remains to be seen. Customers care about convenience, not back end processes, so who knows? And how many people want to be paid in Bitcoin?  Do people really want a less regulated AirBnB?

We’ll see.


Afia is said to be another entry in the growing field of portable health records. The idea is to hold your own records securely encrypted, and, presumably, provide them to other digital systems such as providers and insurance companies. The goal is to reduce the risk when third parties hold personal data.

Regardless of the blockchain technology, this idea depends on those third parties participating in the scheme. I.e., they must not hold records of you, and they must accept your records from you. This requires quite a bit of trust, and a ton of social engineering. We’ll see.


Guild is a clone of medium, yet another blockchain based blogging platform. The idea apparently is that the Internet isn’t unfettered enough, what is needed is the ability for anyone to post anything they want. Blockchain technology assures that people can post anonymously, and there is no way to block or delete content.

In the forty years of the Internet, we have run this experiment many times. It never works. In fact, this approach has reduced the Internet to a near useless patchwork of junk information, slander, and propaganda.  This is certain to encourage and sustain ‘evil’.

Ongaku Ryoho

Ongaku Ryoho is a clone of music streaming apps. The music (however obtained) is encrypted in your cloud storage, metadata is managed with the blockchain. This replicates the servers of a streaming app with a decentralized system.

The economic case is to cut out the middle man, to let artists publish directly to consumers. It’s not clear, but it’s probable that it will be difficult to enforce copyrights and licenses on the content. It will be difficult to “take down” pirated material, once it is in the system.

This could potentially work pretty well, because music consumers are pretty motivated to get their music, and everyone hates the music industry. Everything depends on whether they can get content, and that will depend on how good a deal this is for artists. If artists’ rights are protected, it will work, if not, it will just be another pirate kingdom.

“Disruption” But Not Especially Innovative

Overall, these coming-real-soon-now applications may “disrupt” current Internet businesses, but they are certainly not especially innovative. The innovations are mostly in the back end processing, which users neither see nor care about. Will this be enough to successfully overtake existing companies? I doubt it, but much depends on the details of the user experience.

Some of the ideas are banking on the dubious proposition that people want a less controlled Internet. There are certainly people who grate under the ability of big companies to censor them, turn over data to the government, or get hacked. But most people really wish for a much more filtered experience (which is part of why Facebook succeeds). So it isn’t clear that these apps will have anything other than a niche appeal.

  1. Jonathan Keane, Blockstack Today: 5 Apps Already Being Built on the Decentralized Web. Coindesk.September 2 2017,
  2. Don Tapscott and Alex Tapscott, Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World, New York, Portfolio/Penguin, 2016.


Crytptocurrency Thursday

Blockchain Hardware: Is There Something There?

From the very beginning, Nakamotoan blockchain technology has had a complicated relationship with computing hardware. Much of the case for Bitcoin hinges on the availability of ubiquitous, commodity network and hardware that runs open source software. The Internet is open to all, so the blockchain is both transparent and available to anyone. Furthermore, security and “trustlessness” is assured because it runs of generic equipment [2].

On the other hand, there has been a constant desire to deploy special hardware, including a never ending (and self defeating) arms race in mining technology, and the notion of embedding the computation in everything.  Indeed, some are even splurging on a space program, the ultimate in ‘special’ hardware.

Some special hardware is intended to simplify participation, so everyone can be part of the network without effort. (This notion is philosophically akin to the thinking behind Distributed Autonomous Organizations.). Another intuition is that embedded hardware is a way to accumulate massive amounts of ‘spare’ capacity, running in the background. This argument is something like, ‘While no single light bulb contributes much, a bazillion light bulbs adds up to so much compute power that it will keep the network safe and stable.’

And, of course, corporations are intrigued the possibility of capturing a market by including blockchain in their products. This month Coindesk reports on some of these ideas.

Rachel Rose O’Leary reports that Chinese giant Midea Group is developing capabilities to embed Bitcoin mining in household appliances [3].  O’Leary indicates that their patent is similar to ideas floated by others. Essentially, the excess capacity of the embedded computer would run Bitcoin protocols, and any coins earned will be credited to an account, presumably the owner of the device.

One of the leading proponents of this concept is 21, Inc., and they admit that such a tiny device isn’t likely to generate enough Bitcoins to cover the cost of the electricity.  So, one wonders whether this added power consumption, even while not in use, will be a popular feature.

This news is interesting not because it is innovative or even a good idea, but because Midea is a huge manufacturer who could truly deploy many thousands of such devices around the world.

On another front, Michael del Castillo & Bailey Reutzel report that Intel has been working on a different idea, a blockchain that runs on dedicated “secure” hardware [1]. This was introduced in 2015 as “Sawtooth”, which is a variation on Nakamoto, using a different ‘scratch off’ method (poetically named Proof of Elapsed Time Expended) and using special secure hardware. A quick glance at the explanations suggests that the system sets up an tamper proof timer that implements the ‘race’ in place of repeated hashing. To use their blockchain, you have to have their special chips and the software to run on them. (Intel wants to sell chips.)

I really don’t know about these ideas.

Midea’s idea is far from new, it falls right into some classic dreams of a ubiquitous, unstoppable Bitcoin network. The concept will be vulnerable to all the woes of the Internet of Things, including the likelihood that hackers will try to hijack thousands of toasters to steal the cryptocurrency. Furthermore, the economics of cryptomining don’t appear to support these tiny nodes, so it looks like a dead loss to me.

Is this anything other than a gimmick?

But most of all, one wonders exactly what software these devices might be running. Which version of Bitcoin or other coins would it run? What happens when the protocol changes, or everything splits as it has this year? How will upgrades happen in general?

Given the volatility of the cryptocurrency world, it may not be a great idea to “wire in” a protocol in this way, especially when the units are to be distributed to ordinary people who can’t maintain the crypto features.

Intel’s idea is interesting, but not really a Nakamotoan blockchain at all. It is technically incompatible with public blockchains such as Bitcoin, and philosophically incompatible with the “trustless” notion of many cryptocurrencies. You have to trust Intel. For that matter, you have to buy Intel.

There are probably good use cases for this kind of proprietary blockchain, as well as exotics such as a quantum blockchain. But these use cases are not at all the same as for public blockchains.

The economic case for blockchain is essentially a trade off between efficiency and scale. Intel’s blockchain would be well suited to a small or moderate scale network, but then again so would other, non-blockchain protocols. I.e., if you are going to build a network using special Intel security hardware, you have lot’s of choices besides blockchain.

So is Sawtooth anything other than a gimmick?

My own view is that it is far to early to invest in hardware blockchain products. The protocols are changing rapidly and dramatically, and the economics are highly uncertain. To really work, you have to have zillions of units deployed, which would be challenging to say the least.

Furthermore, many of the hardware approaches fly in the face of various philosophical objectives that drive interest in blockchains. Using a “trusted system” to implement a “trustless” protocol makes little sense. Using proprietary hardware to implement a distributed ledger makes little sense. Having your toaster mine tiny, tiny amounts of Bitcoins is a waste of electricity.  For that matter, your toaster would soon be obsolete, as the cryptocurrency protocols rapidly evolve.

I think that at this point, cryptocurrency hardware is mostly a gimmick.

  1. Michael del Castillo and Bailey Reutzel Silicon Blockchain: Intel’s Distributed Ledger Strategy Is All About Hardware Coindesk.August 23 2017,
  2. Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System. 2009.
  3. Rachel Rose O’Leary,  Manufacturing Giant Midea Wants to Put Bitcoin Miners in Household Appliances. Coindesk.August 24 2017,


Cryptocurrency Thursday

What is Coworking? It Can Be Rural

Coworking is generally associated with urban or suburban settings, serving dense populations of independent workers and start ups.

What about rural areas, with much lower population densities, and correspondingly sparser social networks?

It is certainly possible to do digital work anywhere, including out in the country. Many rural areas have technical infrastructure to support remote working, and talented workers. However, in there are fewer people overall, and therefore fewer workers. In addition, many workers migrate to commercial centers.

So, can coworking succeed in a rural area?

Tim Ford blogs about Cohoots Coworking in rural Australia. Cohoots is located in a small town in a rural area, so it has been a struggle to get enough members to pay the bills.

The facility itself is conventional; featuring desks, networking, and events. But they advertise that if you “scratch beneath the surface and you’ll find some magic”. These “magical” features includes the memorable tag, “Members Who Want To Be Here”, i.e., a community of like-minded workers.

Ford is clear that the emphasis and the value added is community. Given the small population (and lack of competition), they have found little point in advertising ‘we have the best space’. Instead, they take what he calls an “inside out” approach. Community is not something that happens inside the coworking space, it connects out into the whole region.

I think this workspace is another example of how flexible and diverse coworking is. The physical and social setting is quite different from urban centers, but there is still entrepreneurship and community happening.

To my mind, this reflects the most important features of coworking. The space itself can be in the Bronx, Santa Clara, or Castlemaine, Victoria; and it can look and feel a lot of ways. What matters in every case is the presence of a thriving community; a group of people with shared interests meeting face-to-face, helping each other.

I’ll also note that this space almost certainly would not exist without the leadership cadre, who are all worked up about coworking and community. You can have the coolest office space in the world, but nothing will happen without community leaders.

Clearly, finances and low population are a challenge for any rural business, not just coworking. However, rural areas have some distinct advantages.

The cost of living is generally lower, and the lifestyle can be attractive. A small town already is a community and a regional center of social networking, so a coworking space fits naturally into the historic cultural patterns.

One of the best things about rural coworking is that it offers opportunities for people, especially young people, who want to stay home. Digital networks make it possible for kids to have a career without splitting for the city. Coworking, in turn, can be the social infrastructure that is a “respite from our isolation” (to quote Zachary Klaas [2]).

One thing that won’t work is a ginormous space like many operations are developing.  Think small and intimate, not large and generic.

But I’m sure that competent local leadership will understand this necessity well enough.

  1. Tim Ford, Rural Coworking – Our Journey, in Cohoots Blog. 2017.
  2. Zachary R., Klaas, Coworking & Connectivity in Berlin. University of Illinois at Urbana Champaign Department of Urban and Regional Planning, NEURUS Research Exchange, 2014.


What is Coworking

Note:  please stay tuned for my new ebook, “What is Coworking”, coming in 2017.

Cryptocurrency Spins Out Into The Woods?

Is cryptocurrency technology heading down a path to disaster?

This summer Bitcoin is dominated by the ongoing crisis of “governance”, which is leading to fork after fork. It is increasingly evident that Nakamotoan “decentralized” and “consensus” based decision making is less than optimal for something serious like digital money.

The Bitcoin “community” (and we must use the term loosely) is, as Alyssa Hertig trenchantly says, a “Culture of Infighting”.


This has also been a year of multiplying “Initial Coin Offerings”, ICOs. Aided by an ever more automated process, practically anyone can whip up their own tokens, have a quick online auction, and pick up a quick mill or more. Cool!

(And I do mean “quick”. ICOs are infamous for their opaque online auctions that last a few minutes and are sucked up by big players.)

If this sounds like selling unregistered securities (on unregulated markets), the US Securities and Exchange Commission agrees. The SEC Guidance is pretty simple: if it looks like a security, then it is covered by US laws. Period.

Has this dampened enthusiasm? Not much, though it has been a boon for lawyers as people try to thread the needle to avoid regulation, yet still cash in.

As Avtar Sehra comments, the world of ICOs is now exploring various “workarounds” that resemble the “creative” business models of Pachinko parlors. These efforts basically try “to execute undercover securities issuances”.

It’s questionable how well this will work. The SEC tends to be pretty unforgiving of such shenanigans.

And Sehra makes the important point that pouring effort into this penny ante quick money stuff is neglecting the real opportunities that may exist to use this technology within the legal framework.

These workarounds “may be limiting the vision and creativity required to see the true scale of what ICOs and digital tokens could represent; blinding many in the industry to possible risks if they take the wrong path.”

Honestly, it seems to me that cryptocurrency technology is charging down the wrong path, ignoring warning signs and shoving aside the grown ups.

  1. Alyssa Hertig, Bitcoin’s Battle Over Segwit2x Has Begun Coindesk.August 30 2017,
  2. Avtar Sehra, The New Pachinko? Exploring the Economics of Initial Coin Offerings Coindesk.August 20 2017,
  3. US Securities and Exchange Commission, SEC Issues Investigative Report Concluding DAO Tokens, a Digital Asset, Were Securities. 2017: Washington, DC.



Cryptocurrency Thursday