Civil Media, a blockchain company that has partnered with more than a dozen news outlets, has about a week left to sell its new cryptocurrency to the public. The tokens are intended to create the foundation of an economy that is key to the model that Civil envisions for journalism.
So far, it's not clear whether Civil will succeed. The website Token Foundry, which has been measuring the sale, says about $1.4 million worth of tokens has been sold since the sale started in mid-September — well short of the $8 million Civil has set as its soft cap for the project. Its ultimate goal is to raise $24 million worth of tokens. If it doesn't hit the soft cap, the money will be returned.
Civil CEO Matthew Iles says the Token Foundry numbers don't tally every sale the company has made. Civil plans to release more information about the sale and its participants in a report that will be released Wednesday.
The company is also teasing a notable partner ahead of that report. On Tuesday, Civil announced that Forbes will publish some of its content on Civil. Forbes will consider publishing everything on the network within the next year.
But the sales figures that have been made public so far underscore the myriad unknowns that exist around the project, which media observers have been watching closely for months.
News organizations, especially in local and regional markets, have struggled for years to stave off cutbacks and layoffs. Success for Civil and its partners could present a promising alternative to the advertising revenue that the industry is reliant upon, but which has been sucked up by Google and Facebook.
Failure, meanwhile, could send everyone back to square one.
Token ambitions
Civil views itself as a home for good journalism. The company, which is backed by venture capital, has so far given out at least $1 million in grant money to roughly a dozen news organizations that specialize in several fields of work, including local and international reporting, investigative journalism and policy coverage.
Those partner organizations are also coming up with their own sources of revenue they hope will sustain them. Some solicit donations, for example, while others require paid subscriptions to view content.
But Civil doesn't just want to provide seed money to journalists.
Its token program is designed to give readers and patrons a bigger stake in the project. All participants will abide by a journalistic code of ethics, and the community can leverage their tokens to challenge any content they believe runs afoul of the code. Tokens can also be used to tip journalists for their work.
To get that far, though, Civil needs to create an economy for the tokens — hence, the sale.
The launch last month got off to a rocky start. The original process was long and convoluted, creating a deterrent for customers who weren't already familiar with cryptocurrency.
John Keefe, a journalist and developer at the website Quartz, wrote an article for the Nieman Journalism Lab at Harvard University about his experience trying to buy Civil tokens. It took him 44 steps to complete the process. He said he had to upload his own passport photo, take two quizzes about the process and sign up for three different services.
Keefe said he had a positive experience, and learned a lot about how the crypto market works. But he also acknowledged that not everyone is willing to jump through the hoops.
"I think there were a lot of people out there who also had either tried it and completed it, tried it and didn't make it all the way through," Keefe told CNN Business. "There's a lot of people who were daunted by all of those steps."
Iles, the Civil CEO, said his company heard the complaints. It recently made changes so customers can pay for tokens directly with cash.
"When we initially launched, we joked internally that you could hear the loud 'thud,'" he said. "We're encouraged that we're making the right improvements."
Matt Coolidge, a Civil co-founder and the company's head of marketing, said Civil is also promoting the sale as a way to reach more users. While he declined to say how much the company budgeted, he said their tactics are "certainly helping us reach a broader audience."
A 'wild west'
Even so, Civil has faced skepticism over its premise. The Nieman Lab recently rounded up a host of concerns about not only the complicated process for buying tokens, but also about the idea of token ownership entirely. One person included in the roundup, writer and editor Sarah Baird, pointed out that the token sale excludes people who don't have the time or resources to figure it out.
Civil and its partners say they have ways of protecting the enterprise from going awry. A council of journalism experts will act as a final arbiter for any challenge brought by a token owner who believes a piece of journalism is unethical or inappropriate — a way of preventing what Iles has called "mob rule."
Iles also deflected concerns over a single person potentially buying up too much of the token economy, and wielding outsized control over the platform. Only a third of the available tokens are part of the public sale, he said. The rest are being held by Civil and its media partners.
If problems do arise, the participants will be ready to confront them, Maria Bustillos, the editor of the Civil-backed website Popula, told CNN Business.
"The decentralized web is really new, and it's going to have crazy growing pains," Bustillos said.
That's not to say she doesn't recognize the risk. Bustillos, who has been covering blockchain technology and cryptocurrency for several years, said the market is still a "wild west" for those who participate in it.
Anything involving blockchain "is super volatile and always has been," she added. If the token sale fails, they'll go "back to the drawing board and try again."
Iles meanwhile, said he wasn't focused on "alternatives" to the company's current plan. But he also stressed that Civil is about more than the success of its token sale, and that its ability to generate operating capital is not tied to its cryptocurrency system.
"We didn't get into this business to talk about soft caps and hard caps," Iles added. "I think it would be silly for people to think this is the be all, end all."
Civil's token sale ends October 15.
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