How Civil Didn’t Save Journalism

In 2017, Civil funded a fleet of new publications, promising that its cryptocurrency would create a sustainable model for digital journalism. When that didn't happen, editors and staffers got caught in the lurch.

By Study Hall staff writer Allegra Hobbs
Illustration by Paige Mehrer

In the summer of 2017, cryptocurrency seemed like the future. The price of Bitcoin was spiking, doubling from $2,500 in June to $5,000 by the beginning of September. Financial technology companies had raised over $1 billion selling cryptocurrencies. Silicon Valley was obsessed with blockchain technology, which was touted as a solution to problems across industries. Blockchain-based start-ups kept popping up, one after the other: an encrypted messaging app, an online retail service, a social network aimed at helping people build their own companies online. Fruit juice and vape companies added “blockchain” to their names to capitalize on the trend’s cultural cachet. It was a different time.

Civil was introduced in 2017 as an innovative force that would similarly use crypto to save journalism. The company was founded by Matthew Iles, a former marketing executive at a start-up incubator, and funded by blockchain venture studio ConsenSys. Given the climate around crypto technology and the media industry at the time, it made sense. With its blockchain-enabled CMS and custom currency — the CVL token, built on the Ethereum blockchain — Civil promised to rescue the ailing industry from the clutches of Facebook and Google by facilitating crowd-supported newsrooms, placing power in the hands of actual journalists. “With open governance and crypto-economics, we can create a sustainable place for journalism — even the kind of local, policy, and investigative journalism that has been most eroded,” reads a white paper document that Civil published in October of 2017.

This was before the digital-subscription boom that has driven the New York Times and Washington Post to new heights, when confidence in digital media was at an ebb. The venture capital-backed models of Vice, BuzzFeed, and Vox Media looked shaky with their need to hit investors’ revenue targets. Meanwhile, publications like DNAinfo and Gawker were being destroyed by the whims of billionaires, their investigations and commentary erased. Maybe the strengths of cryptocurrency — digital permanence, trackability, and payments within closed systems — were exactly what the media industry needed.

Civil induced a feeling of hope, not the least because the company had raised $5 million in investment and promised to launch dozens of new publications. Their “first fleet” of of 14 titles included sites that stood out in the increasingly bleak landscape of online media: Popula offered offbeat coverage and personal essays as a kind of global alt-weekly; Hmm Daily seemed a worthy successor to beloved quirky blogs like The Awl; Documented promised on-the-ground coverage of immigration issues impacting New York City; Cannabis Wire tracked weed as a business; and Sludge covered money and corruption. In a particularly dire time for local news, two newsrooms — Block Club Chicago and The Colorado Sun — joined Civil, rebooted from previously folded regional publications. There were also smaller operations, like the two-host business podcast ZigZag, local news podcast FAQNYC, and The Small Bow, a site focused on sobriety helmed by AJ Daulerio of Gawker infamy.

Civil’s mission was to provide this network of independent newsrooms with a blockchain-based platform supported by the CVL token. In a second white paper from May 2018, Iles wrote that the model was “predicated on two distinct features: economically incentivized self-governance and permanent recording of authorship and content.” The blockchain, he explained, allowed for both. The newsrooms would be exclusively owned and operated by the “newsmakers” (journalists) producing their content, and anything published on the platform would be permanently encoded in the blockchain and thus relatively untouchable by censors.

With the prospective launch of the CVL token, readers or investors would be able to join the Civil community by purchasing the novel cryptocurrency, which would ostensibly function both as a revenue source and a way for members to hold a stake in the overall company and participate in publications’ “economically incentivized self-governance.” For example: Any new newsroom would have to sign the Civil Constitution, a document defining what the community considers ethical journalism, and then CVL token-holders would judge the incoming newsroom by those standards and get to vote in its favor or against. Members would also vote with their tokens to mediate ethical disputes, like fact-checks or corrections. This was not an entirely absurd idea! Bitcoin had proved to be an amazing investment; might CVL be, too?

To help these independent newsrooms get their start, Civil distributed $1 million in no-strings-attached grant money across the first 14 newsrooms, which Iles wrote would support more than 100 journalists, as well as a grant of CVL tokens, which would have some added monetary value dependent on the market when the currency launched. It’s unclear how much money was allocated for each individual newsroom, but Sludge founder David Moore said in the past he was able to pay the salaries of five full-time reporters with the Civil funds (the Sludge staff is now limited to Moore and his co-founder Donald Shaw).

* * *

Civil indeed helped launch a handful of publications, but it fell short on its promise to solve the media industry’s problems by finding a viable, alternative funding model. This might be because Civil’s mission was always more about investigating the viability of cryptocurrency. Study Hall’s interviews with former staffers and founders of struggling or defunct Civil newsrooms revealed a complicated legacy for the company. On one hand, the cryptocurrency technology never really delivered, leaving newsrooms without funding to continue publishing; on the other hand, those newsrooms would likely not have existed in the first place without Civil’s cash. Multiple emails to Civil went unanswered, as did a message to founder Matthew Iles requesting an interview.

Iles wrote months before the token’s initial launch date in September 2018 that “while our CVL token reserve may effectively fuel the company for an extended period of time, it cannot be relied upon alone for Civil’s long-term growth and sustainability,” and that other methods of monetization would need to be developed. The publications’ viability, in the early days, was always tied to the intensely hyped token launch. But the CVL token launch was a spectacular failure.

During the launch, Civil was unable to secure more than a small fraction of its baseline goal of $8 million — like a failed IPO, readers and investors weren’t buying. Partly, the issue was a difficult interface involving crypto “wallets” and changing currencies to get CVL. The launch also came at one of the worst moments for the entire crypto scene — Bitcoin had tanked to around $6,000 and increasing regulatory pressure slowed investment. A former Civil executive, Daniel Sieberg, publicly denounced the company after he was fired during the launch failure, claiming the coin was “never going to work as a business model.” Though the company had managed to secure some partnerships with news organizations, like the Associated Press, others declined because they found Civil’s concept confusing. The director of product for the Washington Post told the Wall Street Journal: “Our concern was: Are readers going to understand it?”

About a year after that failed launch — and a mea culpa from Matthew Iles admitting the company had focused too heavily on tech innovation and not enough on journalism — several of the platform’s “first fleet” of Civil-based publications had already gone from fully-staffed newsrooms to skeletal operations on the verge of shutting down. Civil had given its first grants — the negotiated mix of cash and tokens — to fund their editorial staffs, but then the regular money dried up before sustainable funding models could be developed independently. The value generated by the token launch was supposed to keep these newsrooms going, but there was no token.

When Civil attempted a relaunch for the CVL token in March 2019, funding concerns still seemed secondary to the high-minded ethical vision promoted by the company’s founders. Around the relaunch, Iles told the crypto publication Coindesk that features like “tipping and revenue generating tools” weren’t ready yet, but “are on the roadmap coming soon after this launch.” Yet the decline of its affiliated publications had already started.

In July 2019, the political commentary site Hmm Daily was forced to shut down due to lack of funding. Founder Tom Scocca told Study Hall that the failed token launch, which occurred right around the publication’s launch, had paved its path to ruin. When the second token sale also flopped, Hmm Daily was left scrambling to become sustainably funded on its own. At that point, the site had only been around for less than a year. It “not only made the timetable for monetization come faster than it otherwise would have,” said Scocca, “but it also put the sites on divergent paths and left them raising funds and operating themselves on their own terms.” The first-fleet network was falling apart.

Scocca also said that the cryptocurrency had proven a “barrier of entry” for readers, just as the Post had feared. “Getting ordinary people into crypto was always the trickiest part of the whole proposition,” Scocca said. “And both the way that the development unfolded and the way the climate around crypto projects was shaping up, we never achieved that sort of frictionless entry for people to get in and start spending money.”

The birth, failed launch, and fade-out of Civil’s platform and publications demonstrates the uneasy exchange between technological innovation and the media industry. Journalism is fundamentally a very un-technological product: Its core is good writing, good editing, fact-checking, and a delivery mechanism to readers. What Civil was promising was far more ambitious and, perhaps tied up in ideals that are secondary to what makes a newsroom tick. The Civil publications that maintained a full editorial staff and robust production through today are those that already had a built-in audience and following. Civil’s new sites like Hmm Daily had to build an audience from the ground up, which made the shortened timeline even more difficult.

* * *

When Popula launched, it was what every new publication aspires to be: Quirky, exciting, an editorial tastemaker and favorite of Media Twitter. It became a common source of recommended links. The site is still up and running, but it’s a shadow of its former self. Founder Maria Bustillos, formerly a writer for The Awl, had to make drastic cuts around the time of Hmm Daily’s demise in the summer of 2019, and now, nearly a year later, it’s still hanging by a thread. “The money ran out, so I just cut everything to the bone,” Bustillos told Study Hall. Popula reduced its publishing schedule to a minimum but had “enough money coming in from subscriptions to keep the lights on. I started trying to find new sources of money and figure out what we’re going to do about our future.”

However, Bustillos harbors no bitterness towards Civil for the way things went. A “crypto winter” had set in prior to the launch, she explained, as the value of Bitcoin and Ethereum plummeted. But she admits that the publication’s struggles were also due to a lack of preparedness on the part of the Civil visionaries. “A lot of it was not their fault — some of it, I think, was,” she said. “There was a certain amount of short-sightedness and this assumption that everything was going to work out. I think you almost have to be like that to be an entrepreneur.”

Popula still lists six editors on its contacts page, but it has only had one since May of last year, when Bustillos laid off the entire staff of independent contractors. Staffers were told there was some hope of future funding and of possibly reclaiming their jobs and did not announce the layoffs on Twitter. Bustillos says she maintains the hope new sources of funding will come through and she’ll be able to take old team members back. Shortly after the layoffs, she made an entreaty for subscriptions in an email to readers, citing the site’s financial difficulty, which she attributed to it being an independent, ad-free publication.

For now, Bustillos said, Popula is “running on an absolute shoestring,” but it’s keeping its head above water. She is frustrated by her inability to raise her current freelance rates, but hopes that will change sooner rather than later. “It’s a disaster, we’re able to pay so little to writers,” she said. “I really, really, really hate it, but I hope that we are doing right by them in terms of the editing and taking a lot of care with their work and encouraging a lot of young writers who might not have bylines.”

In the meantime, Bustillos has instituted a micro-tipping system that lets readers tip writers, and she has built a members-only commenting system that encourages engaged readership. She is grateful to Civil for the platform Popula is a part of, and is a true believer in the company’s mission, which she sees as an opportunity to ensure “speech rights and press freedom.” Her main goal, she explained, was to be an “information activist,” and in that sense, she considers the experiment a success.

Still, some former Popula staffers now describe disillusionment with Civil, which represented, in their view, a tech company swooping in to save an industry it didn’t really understand and making promises it couldn’t keep. It seemed self-defeating, observed one former staffer, that the company only provided Popula with enough cash to last less than a year, relying entirely on the still-unproven success of the token to make up the rest. “As we were building momentum and getting more readers and getting more subscriptions, they just kind of bailed,” the staffer said, referring to the end of the cash grants. “Which I’m sure is a business decision, but it was like, well, why did you fund us in the first place?”

There was an ambiguity around whether Civil was actually responsible for the publications under its umbrella — as a Gawker-like network of sites — or if it saw them as totally independent operations, providing them with funding to get them started but ultimately unaccountable. Civil didn’t seem to have a back-up plan to the token, according to the staffer, who found it naive to expect a brand-new publication to become sustainable so quickly. “It was clear they didn’t get the business,” they continued. More than anything, media takes time and commitment to build a close connection with readers, who might end up subscribing because of the stories, not the CMS.

The crypto aspect itself seemed to be a barrier of entry for readers. “People were like, ‘I don’t know how to subscribe to Popula,’ and ‘Do I have to have crypto?’” the staffer recalled. Bustillos, for her part, says Popula is crafted to be inclusive and that dollars are accepted alongside cryptocurrency. Its readership, she says, is “not at all blockchain people.” She also clarified that most subscriptions to date have been fiat. In other words, the crypto gatekeeping system doesn’t play much of a role in the journalism.

* * *

Around the same time as the Popula layoffs, the Civil newsroom Documented, which covers immigration issues in New York City, fired every staffer except for the founders — journalist Felipe De La Hoz, who was the only full-time staffer and still writes a Spanish-language newsletter for the publication on a freelance basis, plus a contract editor and contract engagement staffer. In a phone conversation in late 2019, De La Hoz described the current iteration of Documented as “in a sort of hibernation mode where they’re keeping the core project going — and still keep doing some great stuff.”

De La Hoz echoed the concern of Popula staffers that a lack of planning and an over-reliance on the token sale’s theoretical success put publications in an untenable position. “I think there were several miscalculations,” he said. “First of all, it really did seem that the company intended for most of these newsrooms to be fully or mostly self-sufficient a year out from their founding, which is basically impossible. There is no way that was going to happen.”

“The Civil token was supposed to be this big success,” he continued. “It didn’t seem there was much of a contingency plan if the token launch didn’t quite go as planned.”

Part of the problem, as De La Hoz and Scocca both observed, is that the task of building a subscriber base and securing funding is especially challenging for new publications. The Civil-affiliated newsrooms that have survived and thrived are those with histories that predate their partnership with the tech start-up. The Colorado Sun was launched out of the ashes of mass layoffs at The Denver Post, its staff consisting entirely of former Post staffers. Block Club Chicago is a continuation of DNAInfo Chicago, launched shortly after the city news site’s shutdown. It’s certainly not the only reason for their survival, but these publications came with built-in audiences and established identities familiar to readers.

Then there’s Sludge, a site launched in 2018 as a first-fleet Civil newsroom for investigative journalism focused on money and corruption in politics. It announced in October of 2019 that it would shut down (or go into “hibernation,” per Sludge at the time) unless they raised enough funds by Halloween. Co-founder David Moore explained to me at the time that he was in talks with charitable funders and foundations, but had not yet been able to secure any guarantee of funding. By the time the coin launch failed in October of 2018 and they realized they would be tight on cash, it was too late to solicit big donors for 2019. His hope was to raise enough money from subscriptions to tide the site over until 2020, at which point he hoped donors would have room in their budgets.

As of May 1, Sludge was being kept afloat primarily by members, plus a few small grants (under $5,000) from journalism foundations, said Moore, who is continuing to apply for grants and look for partnerships.

Moore is another true believer in the democratizing, utopian promise of what blockchain technology can do for journalism. He declined in advance to talk about Civil and would only discuss matters pertaining to Sludge. He also declined to answer if he felt at all that his publication had been harmed or misled by Civil’s miscalculations.

Instead, Moore spoke at length about the potential benefits of “smart contracts” for freelancers — contracts that would use blockchain technology to allow freelancers to easily sign onto projects and get paid automatically by the contractor without middlemen or excessive processing fees — and of a microtipping system currently used by Popula that allows readers to make regular, tiny crypto donations that go to the writers. (In the case of Popula’s system, readers must use Ethereum rather than CVL tokens to leave their tips.)

“I think the development of these tools is ongoing, but I think the design element of balancing the user friendliness also needs to go along with the fundamental decentralization of [newsrooms],” said Moore, referring to Civil’s core mission of putting power in the hands of journalists themselves. To Moore, the kind of publishing technology that Civil has been working on is still essential to Sludge’s future.

* * *

While much of Civil’s “first fleet” were diminished or shuttered by the 2018 crypto crash and botched token sale, Civil has since expanded its stable of newsrooms overall. As of March 2019, more than 100 news organizations had signed on to be part of the Civil community — though it is unclear exactly what that means in practical terms. Blurbs from leaders of these newsrooms, published in a Civil blog on new additions, talk of “experiment[ing] with new financing models” and addressing “lack of trust in media.”

A chart of CVL token activity.

But has tech shown itself to be the solution to these problems? The CVL token is worth next to nothing. It debuted at $0.23 in March of 2019, was worth $.10 in June, according to Crowdfund Insider, and according to data on Coingecko, is currently trading at around $0.006. ConsenSys, the blockchain venture firm backing the project, cut 14 percent of its workforce at the end of April this year after already undergoing significant layoffs in February. Like so many other tech booms, the crypto rush is still cooling, for now at least.

Matthew Iles had envisioned Civil developing a host of apps and products consumers would buy into to help attract funding for newsrooms. App development, however, doesn’t seem to have been integrated into Civil’s core mission, or to have been made broadly applicable across newsrooms. In the summer of 2019, Civil introduced “Boosts,” which would allow readers to donate funds into a newsroom’s cryptocurrency wallet. The few projects on Civil’s boosts page indicate the experiment had helped bring in funding for a few projects while others were stalled at a small fraction of their fundraising goals, like failed Kickstarters. The micro-tipping system used at Popula has a similar goal, but was developed by Bustillos herself, using Ethereum as a more widely-owned cryptocurrency than the CVL token.

The blockchain technology that creates a permanent, untouchable record of the published work — protecting it from meddling publishers and preventing its erasure — has been hyped as a selling point, but it has also been pointed out that the same thing can be accomplished with a WordPress blockchain plug-in.

The real allure of the Civil project seems to be in its promise of community, a word the company frequently invokes to describe its network of newsrooms. The structure of the registry, the inclusion of members whose votes determine the course of the community, the missionary fervor of this quest to save a dying industry, all work together to sell the vision of a collective. This makes sense; it taps into the growing media trend of emphasizing membership and focusing on readers as stakeholders, an effective tool when it comes to selling subscriptions. Yet this strategy is happening more successfully without blockchain technology. Maybe the real cryptocurrency was the relationship with readers publications had all along.

* * *

Media analyst Rick Edmonds of Poynter wrote shortly after Civil’s 2019 relaunch that he had reservations about the complexity of the company’s blockchain-based structure. He still holds those reservations today. “I’d stick by the notion that it’s experimental, and I still see some questions about whether it’s right on target,” Edmonds told Study Hall. “It seems like a fairly complicated system, but I guess you could say the problems are complex too.”

“In terms of interacting with the public, I think that remains an issue,” he added.

Still, even the initial grants seem to be enough to save the company from ill will. (Compare it to the funding Facebook supplied to publications and then revoked for its misleading video efforts.) “I don’t want to bash Civil because I don’t know if [Documented] would have existed at all without the Civil grants,” said De La Hoz. The execution of the project did not go as planned, he said, but he attributed that to benign fumbling. “None of this had bad intent,” he said. “There was some miscalculation but it wasn’t just stunning incompetence, and they had good people there. It’s hard to predict.”

This attitude seems partially based in desperation about the state of the media industry in general. In Scocca’s words: “Nobody else has a scheme that works.”

We are indeed at a time of widespread, harried experimentation in the race to save journalism. Billionaires are throwing money at news start-ups; self-publishing platforms like Patreon or Substack, which recently raised $15 million in venture capital, are billing themselves as the future of media; dueling visions for saving local news have recently emerged, both for-profit (albeit donor-supported) and nonprofit models, like The City and Texas Tribune.

“As I look over what’s going on now, there are an awful lot of new initiatives with big ambitions,” Edmonds said. “I kind of wonder whether there’s going to be a shakeout — is there room for all these different approaches?”

Civil’s shortcomings and messy track record of actually supporting sustainable journalism show the limits of these big ambitions. At a time when publications are scrambling for sustainable funding models — or just money to keep going in the meantime — Civil is trying to do something far bigger. It wants us to imagine an entirely new way of conceptualizing a news site; how a news site could be powered and funded; and how media ownership works. But news sites are capsizing on a much more basic level while Civil continues evangelizing. There may very well be room for it in the droves of initiatives Edmonds references, but Civil’s arcane model doesn’t seem to be the savior journalism needs right at this moment.

It feels impossible to classify Civil objectively as a “failure” or “success” — it depends entirely on how you’re measuring. There is a recognition, even among those no longer working at Civil newsrooms, that the company provided a platform for journalism that otherwise never would have existed at all. “It was great they were willing to put money behind these sites and get them started,” said Scocca. “A bunch of sites jumped in and started publishing, when they otherwise might not have done so.” This ‘tis better to have loved and lost attitude is pretty par for the course in media, where almost any job and every publication is expected to have an expiration date.

Bustillos, though frank about Civil’s shortcomings, considers Popula a success both because of the content it has published and because of the innovation in blockchain technology it has participated in. For her, the goalposts are different — the goal was never to run a fabulously profitable media empire, but to further information activism in the form of un-erasable content and participate in this grand experiment of data permanence and protections for journalists. By that measure, the goal has been met. (At least for the editor-in-chief, if not for all of her contributors or former staffers.)

Civil still has time, and maybe money, to keep trying. Maybe the audience comes later. “If you’re not doing an ad-based model, if you’re not trying to get rich, if all these goals are just stripped away, it doesn’t matter how many people are coming to read [your site] at any given point yet,” Bustillos told me. “We’re just still building the foundations of something that I think can work… and I have all the patience in the world for it.”

Updates: Donald Shaw was misnamed David Shaw; clarified Moore’s view on decentralized publishing; Rick Edmonds writes on Poynter, not Nieman Lab.