A currency whose time of death has been called at least 93 times since its inception can’t be described as going through a volatile period. Bitcoin’s natural state is volatile, the R. Kelly of money. So when Bitcoin’s biggest investor buys the industry’s paper of record, you have to assume it will do little, oddly, to dissuade its investors/fanboys of the money’s integrity.
Leading Bitcoin news outlet CoinDesk has announced it is now the property of Digital Currency Group, the investment firm of Barry Silbert, who founded SecondMarket in 2004 to allow for private-company stock trading. Yahoo Finance reports DCG bought CoinDesk for roughly $750,000.
The announcement comes just as early adopter and developer Mike Hearn turned his back on Bitcoin, calling it an “inescapable failure” in a lengthy post at Medium:
“Why has Bitcoin failed? It has failed because the community has failed. What was meant to be a new, decentralised form of money that lacked ‘systemically important institutions’ and ‘too big to fail’ has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system.
So with an all-out civil war going on among the Bitcoin faithful, how will CoinDesk continue to be a trusted source when its ownership is profiting off investments? Would you trust Sports Illustrated if it was owned by Roger Goodell?
Speaking to Yahoo, Ryan Selkis, the executive who will run CoinDesk, explains the seeming paradox of being the magazine’s boss without influencing its coverage:
“On the latter point, I’m not concerned because even before this, CoinDesk had established itself as a clear industry leader in terms of a trade journal. So they were already getting most of the scoops. When you talk about embargoed news releases, they are going to continue to be on the same lists as the other folks that DCG reaches out to. So that doesn’t really change. To be honest, CoinDesk was typically part of a broad group of outlets that would be contacted whenever there was news about a DCG company, because we never want to restrict press attention to just one outlet for any of its business interests. So that is the much easier question to answer.”
With respect to editorial conflicts, look, that’s what I’m here for, is to make sure there’s a buffer between both entities. So on the one hand, I’m not influencing CoinDesk editorial, but on the other hand, I’m leading the team on a day-to-day basis, and I’m able to interface with DCG but I’m no longer privy to any inside-baseball related to the portfolio companies.
Bitcoin had a dip following the sale, but that could more as easily be attributed Hearn’s highly public loss of faith. For now, Bitcoin’s rallying up in the low $400s, and looks like a good buy with potential to go higher. Or at least that’s what the experts tell me.
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