WSJCoin: Yes, We Created Our Own Cryptocurrency

By October 3, 2018 No Comments

In an original WSJ documentary, markets reporter Steven Russolillo ventures to Japan and Hong Kong to explore the universe of cryptocurrencies. His mission: create WSJCoin, a virtual token for the newspaper industry. Image: Crystal Tai. Video: Clément Bürge

In 2017, bitcoin was one of the greatest investment manias in recent memory. This year, that boom has turned to bust.

To understand what drives the wild cryptocurrency market—the technology, hype and innovation, combined with the hacking, market manipulation and increased regulation—we decided to experiment with a digital currency of our own: WSJCoin, a virtual token for the newspaper industry.

Traveling to Japan, a hotbed for cryptocurrencies, we found that creating a coin is relatively easy: Find a blockchain startup, watch the founder type some code on a screen and a cryptocurrency is born. No wonder there are more than 2,000 of them, according to CoinMarketCap.

What’s complicated is creating a cryptocurrency that is valuable, useful and has widespread appeal. So we began a journalistic venture to find someone who would accept WSJCoin for payment.

Along our way, we met quirky characters who epitomize Japan’s crypto craze: a popular all-female J-pop band called the “Virtual Currency Girls”; a 21-year-old student who spends most of his time mining cryptocurrencies; and a university professor creating a cryptocurrency for use exclusively on campus and in the neighboring college town.

There is one major problem for the industry: The mania has fizzled. Cryptocurrencies have lost over two-thirds of their value since last year’s high. Many people who bought cryptocurrencies at the end of last year have lost significant portions of their investments.

And whether the industry really needs thousands of these digital currencies has been questioned. This year’s selloff has been harder on the biggest so-called altcoins—alternative versions of bitcoin—than on bitcoin itself.

But hope springs eternal among the truest believers, particularly those with faith in crypto’s underpinning blockchain technology.

“There is still potential for significant disruption,” says Ivan Zasarsky, a Hong Kong-based partner in Deloitte’s financial-crime unit. “This is only the first centimeter in a kilometer race.”

Write to Steven Russolillo at [email protected] and Clément Bürge at [email protected]

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