Have you ever wanted to bet on a person? You meet someone, through school or university, and you just think to yourself; Man, whatever that guy does, he’s going to knock it out the park.
You just know that whatever they are working on is going to be a success. Maybe they’ve got a special Midas-touch, or maybe it’s a specific work-ethic. BitClout gives you a way to bet on that person’s success (reputation, actually), without their permission.
Here’s a hypothetical example.
You meet a young guy straight out of college — Max — who has it all going for him. He’s smart, good-looking, and has a work ethic to match. You think… I want to be part of this kid’s future.
Theoretically (not yet, anyway, there are only 15 000 ‘profiles’ you can buy right now) you could go onto BitClout and buy Max’s creator coin — MaxCoin. That’s assuming that no one else knows about Max yet, and his creator coin is still very cheap, so you can own the whole thing. As Max matures, and maybe you help him along the way by providing him valuable connections, mentoring, and resources; his reputation grows, and more people hear about him as he builds himself a name in the tech world… MaxCoin becomes more valuable, and your net worth increases.
Then, one day Max has too much to drink and makes a boo-boo. He gets into a bar fight, ends up punching someone, and lands up with his bloodied face smeared across an online tabloid. The baby-faced founder has lost face (literally) and his reputation has been tarnished — MaxCoin just became much less valuable.
BitClout is the platform that makes that exact transaction possible.
But hold on, how does Max fit into all of this? Doesn’t he have a say in who is trading his coin?
What Max can do, is verify himself on the platform by tweeting out his public address — showing he has ownership of his domain — and then he will get a proportion of the rewards.
The creator can set this percentage of ‘founder rewards’. So when I get my profile verified, I can set my founder reward percentage to 10%. That means, when someone buys 100 MaxCoins, they only actually own 90, and Max gets the other 10.
Obviously, the higher Max chooses to set his percentage, the less attractive it is for potential buyers.
But Max still doesn’t have control over who trades his coin, and at what price. That is solely controlled by supply and demand — which is linked to reputation and status.
Why would I buy one?
This is all good and well, but what’s the end goal here? Why would I buy BitClout, or Creator Coins?
It’s an asset class. Just the same way you’d buy Bitcoin (or stock on Robinhood, or gold) because there is intrinsic value in it as the founding Cryptocurrency; Creator Coins and BitClout alike are part of the rising wave of digital asset classes (See: NFT’s).
They are a way for you to increase the value of your money.
It’s important to note that when you sign up, you’re able to buy both BitClout (that’s the name of the coin, too) as well as other Creator Coins.
By buying BitClout, you’re essentially betting on the concept.
As a side note: To buy BitClout, you have to own Bitcoin. Bitcoin is what you transfer to the BitClout platform, to buy BitClout (currently trading at around $150 USD for one).
Is that all BitClout is good for though?
No, BitClout is a further enabler of the creator economy which is booming at the moment.
At its core, BitClout is decentralizing social media. Traditionally, when people are tweeting, creating videos on TikTok, or posting cat pics on Instagram, they’re adding value to the platform enormously. The only value they get in return is social capital — they grow their following.
What BitClout is doing is giving creators a way to get financial value from the content they create too. Beyond just reputation, Twitter is a place where people share valuable resources and knowledge, and creators are now able to get rewarded for their efforts financially.
More on the exciting opportunities this unlocks at the end.
So, is BitClout a good bet then?
[Not financial advice!]
Has this got legs? Well, this is where the critics are polarizing in their opinions.
The backers are hyping this to be the next big thing ‘you wish you were apart of early’. Remember the days of being able to buy a Bitcoin for a few dollars? Yeah, me neither.
And the backers have some — ahem — Clout. The project has an impressive investor list (according to Tech Crunch):
- Andreessen Horowitz,
- Sequoia Capital,
- Chamath Palihapitiya’s Social Capital,
- Coinbase Ventures,
- Winklevoss Capital
- Reddit co-founder Alexis Ohanian, among others.
It’s not all sunshine and roses, though
- The site has been operating intermittently over the last few days. It comes and goes. Presumably, this is due to the early-stage hype and traffic overwhelming the servers.
- The founder/s are anonymous. They say in an effort to keep the blockchain truly decentralized, they would prefer their identity to remain unknown. He/she does go by the pseudonym ‘diamondhands’ — if that gives you a level of comfort.
- Most worryingly… you can’t withdraw funds. “Yet” — says our friend diamondhands. Alarm bells should be ringing in your head, as they were in mine. What’s the point in owning something you can’t sell, if the point of owning it is to grow the size of it.
The founders are saying that the ability to withdraw funds is just a technicality they need to wrap up, in terms of making BitClout tradeable on some exchanges like Uniswap or MetaMask. So it is in the pipeline — apparently.
What does the future of BitClout look like?
Beyond the use cases explained above, the implications for the social media world and creator economy specifically are quite significant. Consider some of these examples:
- Coin holder engagement. Creators could pay-wall their engagement. To comment on their posts, you have to own a certain amount of their coin. Why? Well, when people pay for something they are invested in it. That means the conversation quality is a lot higher, and the people who are there are there for the right reasons.
- Creator attention. The same applies to the inbox. Imagine an inbox that gets filtered according to “how much of my coin they own”. You will be hearing from your most valued supporters first, and rewarding them accordingly.
- A monetization platform. Creators now have a direct means of making their audience available to advertisers. They can auction off sponsored posts all within one environment while driving up the price and demand for their coin.
- Paywalled content. More coin ownership = access to better content.
What’s my bet?
… I don’t hear you saying. (I am going to offer my 2c anyway.)
Crypto is here to stay — no doubt about it.
I have my reservations about this current incarnation of crypto-as-social-media but I certainly believe there is merit in the systems and fundamentals behind the product.
Additionally, the creator economy is booming, and allowing creators to monetize their following and increase their social capital more effectively is going to be a big win.
My main question or point of concern is this: BitClout is taking on Twitter. Aside from the attractiveness of owning an asset that grows, how are they going to steal a sufficient audience — and creators — to create content that will be better than what Twitter already has.
It’s the old marketplace supply-and-demand, chicken-and-egg dilemma.
To beat Twitter, they have to get to the critical mass of users that means that people would rather create content for their followers on BitClout than on Twitter, because the total upside is larger (social capital + financial value).
But, Twitter is heavily resourced. And they’ve recently taken steps to allow creators to monetize their audience better (acquisition of Revue, announcement of Super Followers, etc.). Is BitClout going to be able to get to critical mass before Twitter steals its business model?
Or is BitClout going to steal a small niche of the Twitter user-base where their platform is hyper-suited to their use-case and operate as a sideline for those superfans?
One thing is for certain, there's never been a better time to be a creator!