Have you heard of BitClout yet? Twitterverse is humming with controversy. Clubhouse rooms abound, rich with debate around the (not-so) shiny but new platform.
The decentralized social network issues “creator coins’’ in exchange for Bitcoin. It has had a rough time out of the gate, landing itself a lawsuit in the first 24 hours, but the future is unclear as to whether it will succeed and usher in the next phase of the metaverse or if it will turn out to be a massive ponzi scheme dressed in internet clothes with NFTs and social capital.
Before I get into a few of my red flags, I want to give you a little sense of what it’s like. The home page is reminiscent of your facebook news feed, but WAY less cluttered, spartan in comparison. You can post text or photos to your profile, follow and message other users as well as buy their creator coins. If people enjoy your content, they may buy some of your coin. No ads to speak of yet either, which is refreshing.
Red Flag #1: The UI is just black and white, almost too simple, with a hacky vibe to it.
It lacks a softness and inviting nature that I really want with the excitement of a new social network.The UX feels very leading too, like once you put your money in, they might not really care about your experience.
There is a simple menu on the left side and the “Top weekly creators’’ list on the right. You see, this platform is supposed to provide a decentralized way creators can provide great content without an algorithm optimized for ad revenue. Everyone starts with a few dollars in BTCLT, $6.66 if I remember correctly. (Definitely not a red flag…? Or ya? Either way, let’s keep it moving.) When you sign up for BitClout, you’ve got to find a link to it on DuckDuckGo, Reddit, or somewhere other than Google. When I searched for it on google, it didn’t pop up with any links that worked to let me sign up. Instead I kept getting this message that “a password is necessary to access the BitClout blockchain.” Once I found the “secret” link on reddit, I signed up and put a small amount of BTC in and converted it to BitClout, their own coin.
Red Flag Number 2: The financial stream is a 1-way flow (as of now).
Once you convert your BTC to BTCLT, there doesn’t appear to be any way to retrieve it from the platform.
Presumably in the future, they will create a way for you to cash in on your gains. Are they creating a base of funds in the hopes that their BitClout coin will be listed on crypto marketplaces? In that case, then it could be a good idea to get on early and grab some of these easier, early coins for yourself and try to capitalize on this part of the growth curve? I’m still not convinced. Remember the leaderboard I just mentioned? It’s full of usernames with a small timer clock next to them. These are profiles that are reserved for famous people that have yet to claim their username on the platform. You’ll see elonmusk at the top of the weekly creator list, and other names like arianagrande, justinbieber, katyperry, and mrbeastyt. Which brings us to #3.
Red Flag #3: Reserving these names and monetizing them before they get on the platform is fishy.
I can understand why they might decide to do so, but it’s encouraging people to dump their coins into the hands of these engineers, which could be just one big black meaningless coiffer. Why would they maybe want to do this? To the extent that there is a BitClout value associated with certain names, it gives the platform clout (pun-intended). When Elon logs on and sees that he has thousands of dollars worth of BitClout, he’s more likely to sign up. By doing so they minimized the down-risk of the parties and minimized their own losses in the process. Besides this, the coins were pre-mined, so it’s not sweat off their back to seed these profiles with sometimes huge amounts of BitClout.
Red Flag #4: Rumor has it that the creators maintained a huge amount of the original BitClout coin in their own wallets.
So as far as it being a “decentralized” social platform, this doesn’t quite fit the bill. It’s just centralized around these guys or gals. As of this writing there is more than 3400 BTC in the platform, which brings us close to the $200M mark. I suspect that we will have blown by that by the time you’re reading this. To be clear, you don’t have to spend any money on it to sign up in the first place, so that’s actually nice, but in order to buy anyone’s own “Creator Coins’’ you’ve got to have something in your wallet. So in theory, you could be able to use it like any other social platform without money and just create content people like and they will buy your coin in the hope that you will raise your own value and they got in on your coin while you were still new.
(Couldn’t you spend your money on yourself in real life and wouldn’t that actually raise your equity too? Asking for a friend….)
So what do you get for your Bitcoin, or BitClout rather? We’ll have to wait and see really. It depends on if this thing was doomed to fail from the start.
The Cease and Desist was from Anderson Kill P.C. representing Brandon Curtis, the product lead for the decentralized token exchange Radar Relay. The name of the defendant is Nadar Al-Naji, the former founder of Basis. according to their website, Basis is “is a stable cryptocurrency protocol with an algorithmic central bank designed to remove volatility.” The legal letter claims that Al-Naji breached California’s civil codes by using Curtis’ likeness without his consent. Check out the CoinDesk article here for more info https://www.coindesk.com/bitclouts-alleged-leader-hit-with-cease-and-desist-by-prominent-crypto-law-firm
For me the questions around the ethics of it all are very interesting.
Are we witnessing an inevitable evolution of technology?
Maybe so. Maybe this is the natural progression from NFTs to the metaverse. It may not be ethically correct, but the tech is moving anyway.
Should we try and stop this?
The monetization feels very Black Mirror-ish to me, but I think we’re well into narcissistic social credit systems taking hold in our society anyway. Maybe we were always going to monetize ourselves in this way. Aren’t we already doing this with ecommerce? Reviews? Uber ratings?
Should we avoid scammy social media platforms?
I’d say it’s probably a little late on the last one, haven’t we been hearing for decades how the big social platforms are already using our data in nefarious ways without our consent? So I’d argue that we are evidently okay with scammy social media platforms.
Red Flag #5: Many people are getting bad gut vibes on this platform.
For anyone who’s been enjoying the relatively egalitarian, high-bandwidth environment of connection and discourse on Clubhouse, BitClout can feel like a regression back to analog style, dystopian competition. It’s pretty antithetical to Clubhouse actually.
Regardless if you’re bullish or bearish on the platform or its monetization, there’s a lot happening very quickly so we’ll have to stay tuned. There are claims of big money backing , Sequoia and the like.
Oh, also Jordan Belfort tweeted: If the question is BitClout, the answer is yes.
Does that make it more or less suspect?
At this publishing Bitcout appears to be down, another red flag? Or just a challenge of fast growth? Time may reveal more details. Let’s hope it goes back up soon though, because I’ve got to see if anyone’s bought my coin yet.
If you get on there, follow me, I’d love to buy some of your Creator Coins. Find me on BitClout @estevanserrano and if you like, you can get in on the ground floor too. We’re taking this baby to the moon! I hope…
See you there?
