Cardano founder Charles Hoskinson responded to criticism over his proposed acquisition of CoinDesk by saying “[this] epitomizes the fundamental problem of journalism.”
Specifically, he was referring to an op-ed from crypto media outlet Protos, titled, “Opinion: Charles Hoskinson would be the worst thing to happen to CoinDesk,” which blasted Hoskinson’s take on overhauling journalism by changing the incentive structure through “veracity bonds.”
The author explained that the pushback from journalists would make his proposals unworkable. Further, what stands as “truth” is easily swayed by online sentiment, which, in any case, can be bought by the “elite few” anyway.
In a livestream on Jan. 20, the Cardano founder stated that media generally has an agenda, citing several examples of this, including FTX paying the Block to spin positive narratives on the now-defunct exchange.
Rather than spin narratives and influence the masses in a particular direction, his interest in acquiring CoinDesk is to get back to honest and principled reporting, said Hoskinson.
“Everyone wants to have a media outlet and use that as a way to express influence in this space, so ‘our chain is great, and this other chain is bad.’ My interest on the media side is more broad, in that I would like to figure out how to get to journalistic integrity, again.”
One approach to achieving this could be through the use of veracity bonds. This would involve an outlet stumping up money for every article published. Should the article be deemed inaccurate, the outlet would forfeit the bonded money to the one who called out the inaccuracy.
“Wouldn’t that be amazing in journalism, where they would be the financial incentive for people to fact-check the fact-checkers?”
However, according to Protos, such a system would be impractical.
Hoskinson defends his ideas
Nonetheless, in defending veracity bonds, Hoskinson explained that financial incentives are key to impacting human psychology and behavior.
He added that the fundamental problem of journalism boils down to the current incentive structure, which he described as one of fostering anger and division.
Journalists and media outlets pledge their credibility each time they publish an article. The current system has no direct financial penalty for inaccurate and dishonest reporting. But with veracity bonds, inaccurate and dishonest reporting does carry a financial penalty.
“The minute you actually get caught, there’s no actual consequences for that; the incentive structure is broken. Veracity bonds with a prediction market model says that if you get caught with your hand in the cookie jar, you actually lose money.”
Under a veracity bond system, the public would be more inclined to trust media, said Hoskinson.
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