The Ultimate Guide To BitClout Social CryptoCurrencyApr 12, 2021
It's one of the hottest things, in the hottest sector out there. I'm talking about BitClout. Where crypto meets social. Where you get to invest real money into celebrities and influencers. This revolutionary new crypto platform has a chance to completely disrupt the space... but what is it really?
That's exactly what I want to cover today, everything that BitClout is and isn't. How it works, who owns it, is it a scam or the next big thing. Opinions are all over the place, which is why I've been studying this platform since it first emerged back in March. So hold on, this is gonna be a wild ride.
Disclaimer: Nothing I say here is intended to be financial advice. I am not a CPA, Lawyer, or anyone else who wears a tie. I am just someone who loves cool new ideas and likes to share them with my friends. So please, do your own research. Investing is risky, and BitClout is even riskier, so only put in what you can afford to lose.
If you are still interested in exploring BitClout, I do have a video showing how I got a 500% return on my BitClout
OK, so here is a quick list of what I will cover:
- What Is BitClout?
- How Did BitClout Start?
- How Does BitClout Work?
- What has happened so far
- Excitement About BitClout's Future
- Concerns, Worries, And Fears
- The Future Of BitClout
What is BitClout?
BitClout is in many ways like BitCoin. It is an open-source technology built on the blockchain. It has a look and feels very much like a primitive Twitter, but with one huge difference, it runs on a cryptocurrency called BitClout.
Yes, this is a platform that allows you to invest real money (you buy BitClout using BitCoin) to speculate and invest in the social media profiles of celebrities, athletes, influencers, and entrepreneurs.
This meeting of social and crypto has some huge possibilities for the future, and I will go into them later. For now, I want to focus on what is taking place today, and that is the buying and selling of social value.
On BitClout you have a chance to buy "Creator Coins". These are unique coins created for every profile on the network. Each individual coin goes up and down in value on its own. (and the overall value of a BitClout coin goes up and down too) The value of each coin determined by how many coins are in circulation and this can change at any time.
So when a pop star gets booked to play halftime at the Super Bowl, investors can jump on and the price will go up. Or if an athlete gets in trouble with the law, investors can bail sending the price down. In this way, BitClout aligns the incentives of the creator and the audience like never before.
This simple concept has set off a rush of opinions. Some believe it is the next big thing and it will change the social media landscape forever. Others think it is a big scam and that investors are being taken to the cleaner. With over 180 million dollars transferred in during the first month, I think it is definitely worth learning about.
How Did BitClout Start?
BitClout first came online in March of 2021. The founder remains anonymous and only goes by the handle @diamondhands. His belief is that "Public discourse shouldn't be controlled by a handful of companies who are optimizing for ad revenue" and BitClout is designed to fix this. You can read the entire manifesto here. It is basically all of the official communication to come out. (although he does post updates on the platform)
Unlike Twitter, Facebook, and Pinterest, which all live on servers owned by their respective companies, BitClout belongs to the internet, and that is where it lives. There isn't a company behind it (but it does have some big-name investors and I'll cover those in a moment), so there isn't a way to shut it down, or enforce regulations.
BitClout lives on a custom-made blockchain very similar to the one BitCoin was created on. The main difference being that it was built to store social media data (posts, messages, relationships, etc) as well as financial data. “In the same way [Ethereum] is bringing innovation back to the financial system, we think BitClout can do the same thing for social media," said DiamondHands. This is really where it takes us in a whole new direction.
How Does BitClout Work?
Joining BitClout is a fairly simple process. You just need an email address and phone number. In a few minutes, you can get your profile up and running. To begin investing you will need to purchase some BitClout. This requires you to transfer some BitCoin into your BitClout account and from there you can buy the native coin.
There are some fees associated with making this transfer. Right now I am still trying to figure out exactly what they are and where they go, but don't worry, they are all listed on the screen when you make the transfer.
I want to be really clear about one of the major criticisms of BitClout. At the time of this writing, there is no way to transfer BitClout back into BitCoin or any other type of currency. Yes, your money is really locked up in the platform... for now.
I say "for now" because there are lots of really smart people working on solving this problem, and I'll go into detail on this when I cover the future of BitClout. For now, just know that any money you put in could be stuck, so only invest what you can afford to lose.
Once you have some BitClout, investing is pretty easy. Just find the profile you want to purchase and click on the Buy button. A word of warning here. There is a setting in your profile called the Founder Reward %.
What happens is, every time someone buys a Creator Coin, that % is given to the owner (even though it is paid for by the buyer). This is a setting that users control and it can go anywhere between 0 and 100. So if you aren't careful, you could spend $100 on someone, but only get $10 in coins. (with them getting the other $90)
On top of this, BitClout has some basic posting and messaging systems built-in. You can follow people you like, reply to posts, and ❤️ any posts you like. At this point, that's about it for the functionality. But it won't be for long.
What Has Happened So Far?
Bitclout.com went online in March of 2021. The nodes for BitClout began running late last year, so the network has been tested. Along with this came an initial investor pool that is pretty substantial. (This is a decentralized platform, so the investors received early BitClout coins, there is no company and no stock or profits)
If you know the VC space at all then you will recognize many of these names. Sequoia Capital has been around for almost 50 years and was an early investor in Apple, Google, Oracle, Yahoo, and many more. Winklevoss Capital is run by the two brothers who were pushed out of Facebook. Coinbase Ventures is an arm of Coinbase the crypto exchange that is going public on April 14th and expects to bring in massive investments. So as you can see, there are some pretty heavy hitters backing this.
At the launch, BitClout added 15,000 accounts for the top social media creators. Each of these accounts has a little "Clock" icon next to it. If the user wants to claim ownership of this account they just have to tweet out their public key and the #bitclout, then BitClout will replace the clock with a blue checkmark, and the rest is done.
This has created a lot of controversy. These profiles were created without anyone's approval, the data was simply copied from twitter. While they can go in and delete the profile if they want, these coins are being traded already, and some for a lot of money.
For example, the top profile value right now goes to Elon Musk. He hasn't verified the account, but that hasn't stopped people from investing in him. At the time of this writing, his coins were selling for $68,489 each. Because of the founder rewards, his profile owns 43 Elon coins already. So he could get 43 x $68,489 = $2,945,027 in BitClout, just for signing up.
But some people are mad about it. The Prime Minister of Singapore, Lee Hsien Loong became furious that his likeness was being used to promote a social media platform he wasn't involved with and had them take it down immediately. Others have sent cease and desist letters to have their content removed. The hard part though is... who do you sue? It's decentralized and has no owner?
Excitement About BitClout's Future?
So why are some of the top minds in Silicon Valley so excited about this? It isn't BitClout.com, it's what is to come. BitClout is a platform. It was designed to have technologies built on top of it.
BitClout alone isn't all that useful. Someone had to go and build an exchange, so you could buy, sell and trade it. (Yes at the very, very beginning, there wasn't even a way to buy BitCoin) Other users built ways to buy things with bitcoin and it grew from there. By itself... meh. But fully integrated... WOW!
The decentralized nature of BitClout means that anyone can run a BitClout node themselves. So for example, Nintendo could program their own node and run gaming-specific features and integrations, but users would still have access to their BitClout.
This means that if he wanted to, Lebron James could host an online NBA2K21 (video game) tournament and only allow people with a certain number of his coins to play in it. Or Ariana Grande could release a song at a Zoom party with her top coin holders being allowed to attend. The potential is huge.
On top of this, the early success and adoption has been a great sign. There are some brilliant people out there working to build these amazing technologies. One of the first is cloutgate.com. This site aggregates profiles and allows you to sort them by coin price, newness, followers, and much more. This can be a very handy tool when looking for investments.
Another great site is bitcloutpulse.com. They have a feature that lets you look into other people's investments. (Remember, blockchain is very public) You can often judge how invested someone is on the platform, by how much they have invested, and where.
These aren't the only new sites, more are popping up every day. I have some amazing friends on the inside of the crypto world, so I get to hear some pretty early stuff and what I have been shown is really exciting, a lot of innovation is on the way for BitClout.
To learn more about these great sites and lots more check out my free BitClout Strategy Video, where I show how I got a 500% return in less than an hour.
Another great sign is the money pouring in. BitClout currently has over $190 million in BitCoin deposited since opening. This includes a single deposit of over 286 bitcoins, which's about 16 million worth. Somebody believes in it pretty strongly. Also, a lot of prominent crypto investors and businessmen are jumping on board.
All that having been said, I once again want to caution you. This is still very, very young, and there are many questions. So don't put in more than you can lose.
Concerns, Worries & Fears?
The biggest concern is obviously getting money out. Once there is a reliable way to turn BitClout into another crypto (BitCoin, Ether, etc) then the most substantial hurdle will be out of the way. But until it is, many will call this a scam.
In an interview on the Defiant, Diamondhands said that this is due to technical reasons. “When you do a certain type of transaction on the Bitcoin blockchain, the BitClout nodes are all watching the Bitcoin blockchain and they give you BitClout on the BitClout chain. Thatʼs called an atomic swap. Essentially, the developers built the BitClout nodes to support getting BitClout with Bitcoin.
To go the other direction would require modifying the Bitcoin blockchain to watch the BitClout blockchain.” He clarified that people will be able to pull their money out when BitClout is eventually offered on exchanges. I can't say if or when this will really happen, so I'll just keep on watching and waiting.
Another major concern has to do with legal liability. When you give any investment advice (which I repeat, this is not! 😊) you have to be very careful. But what about your Bitclout? Ex. Jake Paul, YouTuber turned Boxer, stated that his BitClout will double after he knocks out Ben Askren. Now if he said "my followers will double", no problem. But instead, he spoke about an investment, and lawyers jumped out of the woodwork to warn him that he was technically "giving financial advice". Oops.
The last major concern is really about the scammers. This type of environment is ripe for plucking and many are already at it. You can find fake profiles for everyone imaginable.
Often people will set up a knockoff profile for a celebrity. This can cost someone real-world money when they realize that their profile was a fraud. Hopefully, in time the verification system will improve as more people begin to use their profiles, and it will become easier to tell. For now, it is just something to watch out for.
The Future Of BitClout?
The decentralization of social media may turn out to be as revolutionary as the decentralization of finance has been. If so BitClout has a huge first-mover advantage and a lot of fantastic backers.
At this point, if we could get some clarification about the structure of governance for BitClout (even decentralized platforms have decision-making/updating procedures) and a system for removing tokens from the platform, it would be much easier to support BitClout even more.
But, the exciting possibilities make it hard to ignore, so I'm gonna keep on exploring and learning. Whether it is BitClout or someone else, it is very possible that the future of social media will be on the blockchain.
If you'd like to see how I'm using BitClout come follow me at https://bitclout.com/u/jasonmoffatt