By Alvaro Maranon
The 2016 election demonstrated the far-reaching impacts of when data systems are manipulated and highlighted the importance of data security. Of the various issues that plagued the presidential election, fake news gained a great deal of attention in part due to its vagueness as a term and its repetitive use by the current presidency.
There are various approaches to combat Fake News and deter foreign influence, but this issue will require some creativity to solve. One proposed solution focuses on the disclosure requirements of online ads for online platforms with at least 50 million monthly viewers. The proposed Honest Ads Act[i] would extend existing FEC and FCC disclosure rules for online ads. The Act requires online platforms to retain copies of the political ads, their target market, any associated expenses, when they were run, and who financed them. Moreover, existing FEC foreign investment laws would be expanded upon platforms like Facebook and Google to make reasonable efforts to ensure that foreign nationals do not fund political ads.[ii] This legislation aims to impose further duties, in addition to the already costly General Data Privacy Regulation compliance costs, upon tech companies.
While compliance is one approach, one company, Verasity,[iii] decided to restructure the existing ad revenue system and implemented a blockchain platform to filter out fake news and reward both content creators and viewers. Verasity fuels its content through VERA tokens, which are purchasable through Bitcoin and Ethereum. This cryptocurrency changes the method of payment by advertisers, as content creators are paid by consumers, who then in exchange are paid by advertisers when consumers view their ads.[iv] Content creators are then valued upon the quality of their work, while advertisers are rated in the same manner by consumers. Apart from the improved effectiveness of ads, it offers a new approach to online advertising methods, which have developed a notorious reputation in recent years. Users could choose ads that interest them instead of dreading those 30 seconds. The company also claims viewers can control how much data they reveal to the company and to the public. Another important feature of this platform is that the viewer metrics given to the content creators are anonymous to filter out fake and algorithmically produced accounts, often referred to as “bots.” Previously, advertisement revenue was based upon the amount of views content gathered, so bots were not necessarily disliked by content producers.
The days of mass general target advertisement may come to an end as more companies choose to adopt this type of interactive advertising. Current Media partners with different streaming companies like Spotify to reward consumers for their time spent on content and for the data they share.[v] Current Media’s utility token (CNRC),[vi] which runs on the Ethereum network, can be used by consumers to reduce their membership fees or buy products. This model appears to be more of a rewards system than an independent cryptocurrency, as there are no holdings or a stake in Current Media. Utility tokens, like CNRC, become a sort of digital asset and may be used to access products or services, similar to that of Starbucks’ reward points. This classification may pose a challenge for these businesses. Specifically, when further liability is imposed by the existing regulation regarding loyalty and rewards programs, which are often considered unilateral contracts.[vii]
Regulation is often relied upon to quickly respond to bad actors. However, rushing meaningful reform can be just as harmful by stifling innovation and creating regulatory barriers. While the Honest Ads Act made progress by requiring further disclosure behind online ads, solving the issue of Fake News will require further action. Letting tech companies develop better business practices may be the solution to Fake News, and blockchain might be at the center of it.
[i] Honest Ads Act, S. 1989, 115th Cong. (2017).
[ii] See 52 U.S.C. § 30121 (2004) and See generally, 11 C.F.R. § 110.20 (1971).
[iii] Verasity, Powering the New Era of Blockchain Enhanced Online Video, (last visited Nov. 26, 2018), https://verasity.io/.
[iv] Gillian Brassil, How a new class of startups are using blockchain to tackle some of the Internet’s biggest challenges, CNBC News, (Sept. 8, 2018), https://www.cnbc.com/2018/09/08/media-meets-crypto-how-blockchain-based-media-is-compensating-users.html
[v] AmaZix Editorial, Current: All the multimedia content you ever wanted (and possibly you never knew existed) on one ecosystem, Medium, https://medium.com/amazix/current-all-the-multimedia-content-you-ever-wanted-and-possibly-you-never-knew-existed-on-one-3a9e3f2e916 (last visited Sept
[vi] Current CRNC Digital Token, Cryptoslate, (last visited Nov. 26 2018) https://cryptoslate.com/coins/current/?utm_source=cryptoslate
[vii] A. Christopher Young, Loyalty Programs: All fun and games until someone wants you to buy them a harrier jump jet, Pepper Hamilton, LLP., https://www.pepperlaw.com/publications/loyalty-programs-all-fun-and-games-until-someone-wants-you-to-buy-them-a-harrier-jump-jet-2016-05-16/ (last visited Nov. 26, 2018).
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