BitClout doesn't have a wallet yet, or a way for buyers to cash out, but this week the blockchain social media platform passed 1 million transactions.
What is BitClout? Think about BitClout as social media on blockchain meets a dystopic future in which your social worth is tokenized and traded. OK, maybe BitClout won't become an episode of Black Mirror but there are eerie similarities.
BitClout is a crypto-focused social media platform that monetizes influencers’ reputations into customized coins that users can buy and sell. BitClout users can speculate on people's success — from Elon Musk or even rapper Blueface — with real money using BitClout’s custom blockchain.
How it works: Every profile gets its own unique creator coin. Users convert Bitcoin into BitClout’s coin — $BTCLT — which can then be used to buy others’ creator coins. As people buy a creator’s coin, the price rises. As it sells, the price goes down. BitClout trades for about $178 USD per coin as of April 15.
Who created it: The open-source platform was created by an anonymous group of developers led by the mysterious “Diamondhands.” Launched in March 2021, BitClout says there is no company behind the organization — “it’s just coins and code.”
“If you look at people’s existing relationships with social media companies, it’s this very adversarial thing where all the content they produce is not really theirs but it belongs to the corporation that doesn’t share the monetization with them.” —Diamondhands to TechCrunch on March 22
The catch(es): You can't convert your BitClout back into BitCoin and no major crypto exchange supports the coin. BitClout said it plans to create its own exchange function eventually. It’s also highly speculative, as you’re betting on someone’s popularity on the platform.
Controversies: BitClout will likely face a litany of lawsuits as it’s trading celebrities’ reputations without their permission. The platform pre-loaded the top 15,000 influencers from Twitter, allowing users to buy and sell the reputations of Ariana Grande or Gary Vaynerchuk without their consent. Brandon Curtis, chief research officer at the decentralized token exchange Radar Relay, and the crypto law firm Anderson Kill P.C. recently issued a cease-and-desist letter to BitClout for using Curtis' likeness without his consent.
Is BitClout a scam? Many crypto personalities allege that BitClout is a hoax. Crypto investing blog Crypto Potato claims that some VIPs were allowed to pre-mine BitClout before arriving on the public market and “are already sitting on huge profits.” CryptoPotato also reported that BitClout has been selling celebrity NFTs without consent, including Kayne West, Billie Elish, and YouTuber Jake Paul.
Big backers: While many in crypto are still skeptical, BitClout has attracted some of the biggest investors in Silicon Valley, according to the New York Times. Sequoia Capital, Andreessen Horowitz, Coinbase Ventures, Social Capital, Winklevoss Capital, and the Reddit co-founder Alexis Ohanian have all backed BitClout as it usurps NFTs as the latest crypto craze.
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Moving money: Decrypt reports that a single BitClout wallet has received more than $165 million worth of Bitcoin. That means there are likely hundreds of millions of dollars worth of Bitcoin already on the platform.
Clout kings: Unsurprisingly, Elon Musk’s unverified account tops the list of most valuable personalities on BitClout with an estimated value of about $66,000 per coin and 364 coins in circulation. He’s followed by AngelList founder Naval Ravikant, who’s drawing a value of about $45,500 per coin.
BitClout alternatives: Other platforms like Roll and Rally are also enabling their users to monetize their online reputations. Roll tokenizes your digital self into branded tokens called “social money” on the Ethereum blockchain. Rally allows users to buy and sell social tokens to gain access to special VIP benefits like unreleased content, private communities, and early access to tickets.
The bottom line: From Twitter to Facebook, social media companies have been monetizing their users’ clout for years. While it’s unclear if it will be successful, BitClout taps into a demand that allows people to directly monetize their digital life and reputation. But before you buy a share of Rihanna’s clout, do your research.