Bitcoin’s bear market is bleeding into crypto journalism

Members of the BreakerMag team, including Juliet, the BreakerMag dog.
Members of the BreakerMag team, including Juliet, the BreakerMag dog.
Image: Courtesy Ben Schiller
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BreakerMag, an online publication celebrated for its long-form articles about blockchain and cryptocurrency, announced Tuesday that it is shutting down. The publication was around for about a year, but quickly carved out a name for itself as a contrarian voice in crypto media.

In its short life—and with a small staff—BreakerMag produced a surprisingly large quantity of work and its writers, who proudly didn’t own much crypto themselves, helped explain the complex controversies common to the industry. From covering boozy blockchain cruises to exposing pay-to-play “news” outlets, BreakerMag learned to speak the industry’s language but remained sufficiently skeptical to provide a rare service to crypto investors: honesty.

Perhaps, the only blemish on BreakerMag’s name was its parent company, Breakerformerly SingularDTV, a “blockchain entertainment studio.” The company was co-founded by Joe Lubin, who is often credited as a co-creator of ethereum, the second largest cryptocurrency.

Breaker’s financial situation is unclear, but the company raised 580,000 ether in 2016—then worth $7.5 million—and last May, the company said it benefitted from ether’s 2017 price explosion since it didn’t convert the crypto funds into conventional currencies. While Breaker’s treasury management strategy hasn’t been publicized, an ex-staffer for BreakerMag said they were not aware of any financial difficulties at the parent company. When notified of BreakerMag’s impending closure, “the only reason mentioned was a lack of willingness to continue funding the site,” the staffer said.

This isn’t the first time that a Lubin-led company has cut staff. ConsenSys, his “blockchain venture studio,” which he funds out of pocket, laid off at least 13% of its workforce last year.

Ben Schiller, BreakerMag’s editor-in-chief, told Quartz his publication sought to provide something different from most other crypto media. Rather than focus on prices, he said, BreakerMag wanted to explore the cultural intersections of cryptocurrency, with sports, business, and other disciplines. “The reality is that it’s a sort of niche subject,” Schiller said of crypto. “And in any form of journalism, you either need scale or you need something special that people are willing to pay for.” Schiller lamented that Breaker did not have the time to realize his vision.

Despite the bear market, BreakerMag also planned to host a conference, “BREAKERCON,” during New York Blockchain Week in May. However, that plan has been derailed, and another crypto publication, The Block, has now assumed responsibility for the event.

As a fellow blockchain/crypto journalist, I’m saddened to see BreakerMag shut down. The publication’s demise marks a somber day for two reasons. First, the cryptocurrency industry will be worse off. While mainstream media chronicled crypto’s ascent (e.g., Everyone Is Getting Hilariously Rich and You’re Not), BreakerMag was there to pick up the pieces. Such sober coverage helped dispel the fantasies of blockchain evangelists. BreakerMag was comfortable with the uncomfortable, and the publication confronted the ethically challenged segments of the crypto community. David Z. Morris, an ex-BreakerMag writer, said he was proudest of his story about a cryptocurrency exchange which acquired Neutrino, a firm whose founders were tied to governments with a history of human rights abuses.

Secondly, BreakerMag’s end also reflects the modern challenges of creating a profitable online publication, especially in a narrow market. “Not nearly as many publications will continue running without a business model,” a writer for another crypto news site told Quartz. “I suspect that a lot of publications will shut down and it will lead to consolidation of the whole crypto media space.”

If Breaker and other editorially independent outlets vanish, then coverage of the blockchain/cryptocurrency industry may come to be dominated by dodgy operators, with the very pay-to-play business models that Breaker laid bare.

BreakerMag created a rich resource for blockchain enthusiasts and crypto investors. As other publications attempt to turn a profit in a bear market, readers should support their efforts. Truth can set you free, but that doesn’t mean the truth is free.


What you need to know—and why

Tether has 74% of its reserves

Tether is a company that has issued digital tokens that are supposedly backed by US dollars, but has recently been plagued with questions about its viability after an affiliated company reported $850 million has been seized by authorities in Poland, Portugal, and the US. In a court filing submitted on Tuesday, Tether’s general counsel disclosed that the company has 74% of cash and equivalents on hand to back the tokens. In other words, there’s only $0.74 to cover every outstanding digital token—at least immediately. Despite the revelation, Tether continues to trade for $1.00 per unit.

Takeaway: Tether’s incomplete backing should serve as a warning to crypto traders. There’s no upside to holding tokens that are pegged to a dollar if there aren’t enough dollars to back them. Until the company’s $700 million loan to Bitfinex is recovered and the $850 million that is missing from Bitfinex is returned, it would be smart to avoid the stablecoin. ↘️

Please send news, tips, and boozy blockchain cruises to Today’s Private Key was written by Matthew De Silva, and edited by Oliver Staley. Only entropy comes easy.