Wikipedia’s Jimmy Wales Passes On Cryptocurrency, ICO

Thursday, 8/2/2018

Jimmy Wales' appearance at the BlockShow Europe in May turned a few heads because of his well-known critical attitude toward cryptocurrencies and ICOs. However, it turned out his reason for attending the conference was to warn participants in the space. He noted that the industry was "in for a rude awakening," according to MarketWatch.

Following this comment, Wales recently revealed that his brainchild, Wikipedia, would "absolutely never" issue its own cryptocurrency or hold an ICO. He said the website had "zero interest" in joining the crypto trend.

Wales told Business Insider his reservations regarding blockchain and why he attended BlockShow in Berlin in the first place:

"It's a super-interesting technology, but it's clearly a bubble with a lot of mania and hype around it. People pay me to give speeches, so I flew to Berlin. I really do like the city."

Clearly, he was not in Berlin to emerge as the next spokesperson for the development and adoption of the technology.

In a time of crowdfunding, it is notable that Wales vehemently opposes ICOs and instead relies upon conventional donations to keep the online encyclopedia running. ICOs have successfully raised funds for a variety of ventures, such as the blockchain platform EOS, even despite potential flaws with these methods. Wikipedia could, in theory, benefit from its own token offering, especially considering its widespread use and large community of editors.

Although Wikipedia has passed on crypto, there are other encyclopedia platforms that use cryptocurrencies to reward users for their contributions. One example is Lunyr, an Ethereum-based platform that is essentially the blockchain equivalent of Wikipedia. A striking difference, of course, comes through the service's tokens, which are given to individuals whenever they contribute to the application.

The Lunyr team believes its blockchain encyclopedia can solve "the problem of inaccurate information" while pushing "the boundaries of crowdsourced knowledge." This is because an economic incentive like the platform's token would theoretically encourage users to provide robust, accurate information. Lunyr currently has 3,080 articles, compared with Wikipedia's over 5 million.

However, with the dominance of Wikipedia, it is important to ask, "Does the website even need a token to improve its fundraising efforts?" For all intents and purposes, the online encyclopedia is doing just fine. In fiscal year 2017, the Wikimedia Foundation, which hosts Wikipedia, raised over $80 million in donations. Deducting the foundation's overhead, it still increased its endowment by about $20 million – no small amount.

Wales' decision to forego crypto should come as no surprise, then. The website has demonstrated it can succeed with simple banner campaigns that ask users to donate to the cause. If people already want to keep Wikipedia alive and well on a volunteer and donation basis, then the economic incentives of cryptocurrencies may not be attractive.


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