This probably won’t come as a surprise to many of you, but I’m not nearly as smart as I like to think I am. Specifically, when it comes to new technology, I am a blithering idiot, and no matter how hard I try to correct this and educate myself to the ways of the 21st century and all the advances we’ve made, it tends to shoot right over my head. So when I learned that a film was being financed with cryptocurrency, something I’ve never properly understood, I knew I had to sit myself down and find a way to wrap my head around it all.
First, there’s the obvious question of what, exactly, cryptocurrency is, and this primer on Bitcoin filled me in with a general overview. Bitcoin is, of course, the most well known and popular of the cryptocurrencies, though it is not the one being used to finance the particular project we’re going to examine. That would be Ethereum, which uses a token known as ether.
The project in question finds production companies Ground Control Entertainment and XYZ Films partnering with producer Kyle Franke and SingularDTV for a five-part feature called New Frontiers that will cost about $5 million, or 9000 ether, and will be distributed via block chain through SingularDTV’s streaming distribution platform Ethervision. The idea of distributing through a streaming service is easy. Block chain, I am to understand, is “a shared public ledger on which the entire” currency relies. I get that, too, because I assume it’s like having a Netflix membership. All of that stuff feels pretty straightforward, and my confidence in cryptocurrency’s long-term financing prospects instantly grew as I went over it all, though some skepticism still lingered.
From a dollars and cents standpoint, the financiers of New Frontiers plan to convert the Ethereum to cash, and pay the producers, talent and vendors (etc.) through that process. I mean, if one has 9000 ether to spare, there are worse things on which to spend it than a sci-fi movie. That doesn’t appear to be an uncommon feeling, as there is at least one website now operating that is designed to use cryptocurrency to fund feature films. Literally, it’s called bitcoinfilmfunding.com, and its whole purpose is pretty self-explanatory. Create a Bitcoin in an ICO (or Initial Coin Offering, basically an IPO for cryptocurrency), get people to buy it, and those funds go directly toward the project in question. Simple.
Of course, this begs several questions, like whether or not Bitcoin has a viable future (opinions tend to vary on this), and whether Bitcoin and its ilk should be taken seriously as reliable methods of financing entertainment projects. Let’s dive into the second part, first. The truth is, any kind of financing should be taken seriously until it no longer exists. Debt financing, equity financing, tax incentives, government grants, they all get the job done… until they don’t. As has been discussed plenty in this space, a string of different financier types — from oil magnates to tech giants, junk bonders to hedge funders, Eastern European kleptocrats to Far Eastern governmental entities — have come and gone in Hollywood, and if the mining of Bitcoin can lead to your project coming to fruition, there is simply no argument against it. If it works, it works.
However, there’s still that first part mentioned above, about Bitcoin’s reliability. People may be designing and buying Bitcoin, but the fact that it is not tangible would seem to imply that it remains open to potential sabotage, especially in a digital world without any regulation. After all, you can build the most protective safe in history, and there will still be someone who will find a way to break into it. Additionally, there is apparently a high occurrence of fraud when it comes to the cryptocurrencies. Bitcoin is the safest one, for now, and has the most public engagement, but many others have cropped up over the last year or so, and they are often nothing more than a way for the people who create them to make a quick buck. There are legitimate questions about what, in fact, investors are actually buying, and what their investment really is. In fact, it’s not unlike the dot-com boom of 20 years ago, and we all know how that worked out.
Whether you’e optimistic about cryptocurrency or have your doubts, the good news is that the entire system is likely heading for some kind of cataclysmic reckoning. I recently read about how the Bitcoin program currently uses more electricity in a year than Ireland and 18 other European countries, and that, in just 18 months’ time, it will consume more energy that the entire continental United States. I keep seeing alarmist stories online about how Bitcoin can destroy our Clean Energy plans for the future, thus leading to the demise of everything, so it’s fair to question the viability of cryptocurrency.
Bitcoin sort of recalls the horror stories we see in film, television and books about how humanity creates technology that is meant to help us, but ultimately leads to our doom. That might be a heavy-handed analogy when talking about something like cryptocurrency, but when you’re as dumb about these things as I am, you tend to take the word of those who at least claim to have a better understanding of it.
Having said all that, I’m not entirely sure there’s any moral reason to not jump on this train while it’s still chugging along. It’s not like taking dirty money from criminals or other suspect sources, especially if the transactions are specifically designed for the project in question. That said, with cryptocurrency still in its relative infancy, it remains sketchy enough that the skepticism surrounding it is fair. I’d rather be wary of it and perhaps even avoid it entirely rather than get caught in the middle of it all, if and when it finally collapses. There’s no such thing as a sure bet in Hollywood, but until someone can explain it in such a way as to assuage most if not all of my doubts, I don’t think I’ll be alone in that regard.