What is Bitclout?
- Bitclout is a social media platform with its own cryptocurrency.
- The website lets you buy this asset called “Creator coins” which lets people like you and me buy and sell other people’s social worth (bitCLOUT = clout aspect).
- It has its own blockchain, which is a secure digital ledger that stores transactions across several individual computers. The value of the currency isn’t determined by one person or group, like fiat currency and the central bank, but by the amount or volume traded.
- So, you’re essentially buying and profiting off people’s reputation as if it were a stock. Elon Musk’s Creator coins are currently the most expensive.
How does it work?
- The more a person’s creator coins circulate, the more they are worth. It’s kind of the company’s selling point and why it is “decentralized."
- In theory, if Demi Lovato had a Bitclout profile and released a number one hit single, her Creator coin would go up in value. But if she insults a yogurt shop, it would go down.
- For every million Bitclout coins sold, the price doubles. And, much like Bitcoin, the supply is capped at 19 million.
- Think of that Black Mirror episode “Nosedive,” where people’s values are based on other’s perceptions of them on a social media platform. It’s like that.
- Just like Bitcoin, Bitclout founders have kept their identities pretty hush-hush in alignment with that whole “decentralized” concept.
- All we know is that their lead creator goes by “Diamondhands” and that they have some high profile investors – including Andreessen Horowitz (who has also invested in ClubHouse), Sequoia Capital, the Facebook twins/Zuck’s nemeses and Coinbase Ventures – all of whom have poured over US$100 million into Bitclout.
- Critics say that it would appear to encourage cancel culture since technically all you need to do is take a short position on someone’s coin.
- A short position is like placing a bet that the value of something is going to drop, then you profit off of the drop in price.
- In our hypothetical Bitclout scenario, a user could borrow 100 Elon Musk coins from Person A, sell them to Person B for US$1,000, release an audio recording of Elon Musk making a controversial remark with the hope that his coin value drops, buy back their 100 Elon Musk coins from Person B for only US$500 since his value dropped and give back the 100 coins to Person A that the user borrowed. At the end of the day, the user has made US$500.
- Another issue is that you can get money in but not out. So while you can convert Bitcoin into Bitclout, you can’t convert it back into Bitcoin. So far, a reported US$225 million bitcoins have flowed in. Diamondhands is currently trying to make it possible to convert Bitclout into Bitcoin as well.
- It’s said that Bitclout took the profile info off of 15,000 Twitter profiles without the knowledge of those users.
- Some of the celebs who had their profiles created without their permission are actively trying to distance themselves from it, whereas others love it. For example, Famous Norwegian DJ Kygo tweeted, “Just setting up my #bitclout.”
- It’s still too early to say. But, when we say people are catching the Bitclout train, we’re talking about high profile people – just like how high-profile people like Musk made Bitcoin a thing.
- For example, Terry Crews launched his own social currency called $Power with another social currency startup, Roll.
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