How Blockchain Can Fight Fake News

Fake News

"Fake news" is a term that's being thrown out a lot lately. Strictly defined, the concept constitutes blocks of information fabricated either wholly or in part from falsehoods to serve an end, sometimes political. Creating or promoting fake news is principally an act of commission and occasionally an act of omission: reporting blocks of true information chosen selectively to promote a goal.

A natural response to the problem of fake news is the emergence of fact-checkers. A recent take on the phenomenon from Vox addressed the question: Who will guard the guardians?

Though the term has gained steam recently, fake news - or fake history, for that matter -is not new. Every society is built on a store of publicly-accessible information, a shared history, that evolves over time. Bloomberg View columnist Megan McArdle wrote a piece on the advent of "fake news," titled " Fact-Checking's Infinite-Regress Problem ."

"It's a high-tech version of a problem that has been with us for at least 2,000 years," she wrote.

But who is assigned to determine this public ledger and how can they be trusted? Incentivizing the content creators is certainly one way to address the proverbial players.

That's where blockchains come in. A blockchain is a shared, distributed database which is updated and kept secure through some communal consensus algorithm. The Bitcoin blockchain appears to have solved the fake news problem for its particular application (essentially, debiting/crediting money accounts).

With an increasing appetite for verifiable truth on the internet, blockchain technology can step in to provide the new ecosystem of information.

Incentivizing Curators of Content

Warsaw-based company Userfeeds is developing a new solution which utilizes "the principles and methods of Bitcoin and Ethereum to create transparent and publicly auditable content networks and ranking algorithms that use digital tokens as ranking signals," according to a statement on the company's blog.

Its underlying philosophy is that the current system of news discovery and content ranking, which involves links, likes and upvotes, is in fact broken and easily manipulated by third parties essentially enabling "fake news" to rank high on platforms such as Facebook, Twitter and Google's news search.

The company's first product, Userfeeds Engine, is built on top of the Ethereum blockchain and will enable developers, publishers and users to run custom content rankings to produce search results, recommendation processes, news feeds and sponsored links. The end goal: create completely new business model opportunities for content publishers and developers well beyond traditional advertising and subscriptions.

The first product platform aims to build an incentive-based system which allows digital content to be backed by tokens. The tokens themselves can be exchanged by users, producing time-stamped transactions that can be publicly viewed as a link between the content creator and the content they are producing or curating. Essentially building a process whereby the content creator can authenticate the content they are creating and keeping them accountable.

The reputation token will both gain value within its walled categories and applications and have liquidity in that they are tradeable for other currencies to create a mechanism by which content creators and curators can generate revenue for sharing authenticated content. This will ultimately incentivize and enable the guardians.

Feeding Real-World Truths

Thanks to the counterintuitive dynamics that drive prediction markets, Silicon Valley-based company Augur could create more specific and accurate predictions - an antidote to media pundits and pollsters who bear little cost for getting their forecasts wrong. But like so many other technologists, financial traders and other freethinkers working to create strangely fascinating new services atop the blockchain , Augur, which is still in beta, can eventually feed real-world truths into any other online application.

Here's how it works: After one group of people joins a prediction market and bets on an outcome, Augur pays others to identify that outcome, to verify what happened. But it doesn't just pay them a flat fee. On its blockchain, Augur houses its token that encourages people to be accurate. Augur calls this digital token the "REP." This cryptocurrency doesn't let you buy and sell stuff. It tracks your reputation-that is, how often you tell the truth. People bet their REP tokens that they are indeed telling the truth, reporting the facts as they actually are. If most others agree, the system returns their tokens and pays them in cash. It's a way of aligning individual aims in the same direction. Augur adopted clean dividend-like characteristics for its tokens. All the fees generated by a market get distributed to the REP holders (in ether) that correctly voted for an event (i.e. they voted with the consensus). As the number of markets rise, the income generated by the REP holders should also rise. The REP token ensures that everyone is pulling toward the truth.

If Augur gains scale, other possibilities arise. In an age when fake news bounces around Facebook's echo chambers, and readers see no difference between online hoaxes and the careful reporting of The New York Times, the possibility of creating a digital market for facts becomes a real concept and solution.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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