Why You Need ETH to Purchase CVL
We’ve said from day one that we hope to become the first truly mainstream application of blockchain technology — a non-trivial goal, to be sure. But somebody’s got be the standard bearer for humanizing dense, technical terms like “token curated registries,” “partial-lock-commit-reveal voting,” “proof of stake” and, of course, “Ethereum” — and putting their very real potential to action. For more on this front, I highly recommend you read Vivian Schiller’s great overview: A Non-Blockchain-y Person Explains Civil.
I’m here to address an important topic that concerns anybody who wants to purchase CVL, especially those with little or no previous experience purchasing cryptocurrency: to purchase CVL, you will first need to purchase ETH, the cryptocurrency that powers the Ethereum blockchain (Civil itself is built as an application on Ethereum).
This post applies to you if:
- you want to launch a Newsroom on Civil
- you want to be able to challenge a Newsroom if you think it violates the Civil Constitution
- you want to vote for or against these challenges
- you want to be able to appeal the results of these votes to the Civil Council
These are the initial use cases for CVL tokens. If you’re ready to start the process, and you’ve already reviewed how CVL tokens work and know how to responsibly acquire and store cryptocurrency, then we encourage you to register on Token Foundry, our close partner that’s managing the CVL sale, and start the journey.
If you still have further questions about the process, including why you can’t simply buy CVL with traditional currency — and whether we’re simply trying to design an endlessly torturous exercise (we’re not) — then this post is for you.
Civil is about supporting journalism; we welcome all comers, from cryptoland and beyond
What’s so exciting — and a bit daunting, sure — about this project is that we’re trying to unite a network of people who care about supporting quality journalism above all. Civil exists to take the middleman — third-party owners — out of the equation, and return control back to journalists so that they can focus on serving their readers above all else. If a newsroom is profitable, and providing a public good, journalists should never have to live in fear of imminent layoffs, as is the case currently.
Blockchain factors into this model, but we’re not looking to limit this process to those who know about and actively purchase cyptocurrency. There are many in that group that will participate; for many more, though, Civil will be their first experience with a blockchain-based technology.
This post is for that latter group.
Why do I need ETH? Why can’t I just purchase CVL with “normal” currency?
Civil is an application built on the Ethereum blockchain. That’s what allows it to be decentralized — meaning, all transactions will occur in a peer-to-peer manner, and be reflected on Ethereum’s ledger —and why you will need to purchase CVL tokens with ETH. Think of CVL as the customized software that bridges Civil’s platform with the Ethereum blockchain. It’s what makes everything work.
Why not just build our own blockchain, you may ask? It would be prohibitively difficult — and needlessly complex — to build our own blockchain, and would distract our product team from developing the software needed to power Civil’s system. For our cryptoeconomic model — meaning, the system that incentivizes “selfish” individual decisions (“I want to acquire more CVL by voting for the winning side in a challenge”) that positively impact the overall network’s welfare and positive growth (“My vote helped reject a frivolous challenge that tried to remove a high quality newsroom from Civil’s platform”) — to work, we need to attract a network of mission-aligned individuals who care about promoting quality journalism above all.
We can’t simply rely on the fact that anybody who already has ETH perfectly overlaps with those who actively want to help promote a new model to incentivize quality journalism. Buying CVL is a signal that you do care about that, and that you intend to participate in the system, either by launching your own Newsroom or by being active in challenging Newsrooms that appear to violate the Civil Constitution / voting on challenges.
Thanks to Ethereum’s easy-to-build nature (for developers, at least), we’ve been able to develop custom “smart contracts” (the “software” I referenced above — more on smart contracts appears later in this post) that let users transact via CVL, while logging those transactions on the Ethereum ledger, for things like launching and challenging newsrooms, and appealing suspect voting outcomes to the Civil Council.
It’s thus necessary to first acquire ETH — Coinbase and Gemini are two of the most popular, easy to use platforms for doing so — to acquire CVL, as you’re effectively entering into the larger Ethereum ecosystem when you buy CVL.
OK — so how do I know how much CVL to buy?
It’s ultimately up to you, and the role you’ll want to play on the platform. If you want to launch a Newsroom, you’ll need at least $1,000 worth of CVL. The price of the CVL token will depend on how much ETH is contributed during the token sale. If we sell $24M worth of CVL, the price would be approximately $0.70 per CVL token ($24M worth of ETH divided by the 34 million CVL being publicly sold).
That means if we sell less than that, the price would adjust accordingly. So, you’re not coming to the sale saying, “I want to buy 100 CVL tokens”, you’re instead saying “I want to buy $XX ETH worth.” (here’s an up-to-date currency converter for making these calculations)
Think of $1,000 as a magic number as it relates to key activities on Civil, including:
- the stake required to launch a Newsroom
- the stake required to challenge a Newsroom you think violates the Civil Constitution’s standards
- the stake required to appeal the results of a challenge to the Civil Council, if it’s not aligned with the Civil Constitution
If the CVL sale reaches the maximum value we plan to accept, that means these actions would require 1,429 CVL/each (as of August 2; this number may vary slightly between now and September). Based on the current market, we’ve determined that total to be $24 million (for more on that decision, see this post from Civil CEO Matthew Iles).
For voting, 1 CVL = 1 vote. We considered a scenario in which each individual CVL token holder = 1 vote, but ultimately determined that system would be far more vulnerable to manipulation (e.g., you could try to flood the network with bots posing as humans; the time required to weed them out would be extraordinary, and it could undermine confidence in the network from day one… basically, we’d risk facing the same issues currently plaguing Twitter).
For those who worry that those with more CVL will be able to exercise outsized power over community votes, remember that you’re not voting for which side you like best, you’re voting for whether or not a Newsroom is clearly in violation of the Civil Constitution, or not. In an extreme scenario in which a single party or small, motivated bloc was able to exert undue, special interest-driven influence over the network, the outcome of the community vote could be appealed to the Civil Council, who retain the right to overturn such votes on appeal, and reverse the flow of tokens awarded (e.g., if a Newsroom was voted off and lost its deposit stake, the Council’s reversal would not only give them their stake back, but 50% of the challenger’s stake, with the remainder of the stake going to those who voted for the Newsroom to remain on Civil).
You talk a lot, blockchain man… Remind me again why we can’t just do this with ETH — or, gasp! — “regular” money?
Fair warning: things get slightly more technical from here.
I referenced this above, but the absolute key for this model to work is attracting a network of truly mission-aligned people. It’s much easier to do so by creating a new network from scratch, and explicitly stating that it exists for all who want to help support journalism, by creating a home for journalist-owned newsrooms (a shocking rarity in today’s climate). A blockchain-based system is necessary to create a decentralized network (e.g., “no middleman”) and permanent archiving (or, “billionaire-proofing” journalism that runs on Civil). And doing so with ETH would make it inordinately difficult to attract a network of people universally committed to supporting journalism.
We want to ensure that those who join want to do so because they understand what we’re trying to do vis a vis journalism, and who want to join in and help drive the process. This is a stark contrast to simply opening the floodgates to anybody with ETH, with no filtering mechanism for individuals who may not be rational contributors to our self-governance model. So, we’re launching this unique cryptocurrency, CVL, that will underpin this purpose-built network that incentivizes taking specific actions to promote quality journalism. That’s how participants will be rewarded with CVL tokens, which will have a fixed supply of 100M total. The fixed supply — there will only ever be 100 million such tokens — is an important distinction; it means they can’t be won by “mining,” as is the case with ETH and other cryptocurrencies — which presents an entirely different incentive model.
OK fine, I get it… I need CVL, and CVL needs Ethereum… but why not Bitcoin? Isn’t that technically a blockchain too?
Ethereum makes it particularly easy to build applications (or “decentralized applications,” or “dapps” as they’re known… Civil is a dapp), via a series of open protocols — think of them like customizable token templates for software developers — that allow you to create your own token for a specialized use case. This could be, for instance, curating a purpose-built platform that aspires to be the “anti-Facebook” for journalism. It’s for this reason that Ethereum has become so popular with developers; it’s much more difficult to do this on bitcoin and most other blockchains.
Another reason is that Ethereum enables “smart contracts,” which were referenced earlier in this post. Smart contracts are essentially, a way to automate and enforce “if-then” or “if-then-else” agreements. “If the Patriots win the Super Bowl, noted Patriots hater Matthew Iles will donate 10 ETH to the Patriots foundation”; “if the Patriots don’t win the Super Bowl, ethical Patriots fan Matt Coolidge will donate 10 ETH to the Ford Foundation.” Once that scenario is agreed to, the transaction will automatically go through, unless more than 50% of the entire Ethereum network (the distributed community who has access to the ledger) votes to overturn it and effectively pretend it never happened. That’s a highly unlikely outcome, and why these transactions are often referred to as “trustless.” Once they’re agreed to, you can rest assured they will go through automatically and without needing to be processed by a third party (like a bank). It’s a purely peer-to-peer model.
Tl;dr
We fully recognize this is going to be a new process for many people, and that it’s not yet as straightforward as other online transactions. But it’s how we’ll build a distributed network of people from around the world who come together with a shared purpose of supporting ethical journalism, providing a home for the growing diaspora of journalists being laid off from struggling newspapers and pushing back once and for all against the growing scourge of disinformation.
We’re committed to making this process as smooth as possible. There’s a lot of documentation available on our website, and we’ll soon be hosting daily webinars to walk through the process of purchasing ETH, and then CVL. Register here to join.
Here’s to a better way forward for journalism.