Reputation is, in some sense, the ultimate asset — it’s associated with an individual person, it can be degraded quickly and it’s hard to build up, but once it’s established, can be converted into all sorts of value.
This is where BitClout steps in. BitClout, also known as DeSo (which stands for “Decentralized Social”), is a combination social network and cryptocurrency exchange, where individuals can create accounts that have their own coin associated with them, and users of the exchange can buy and sell those coins to express their opinion about the individuals who issue them. BitClout also has its own cryptocurrency called $CLOUT, which is used to buy those coins.
How Does BitCloud Work?
BitClout aims to use cryptocurrency and blockchain technology to create a kind of digital permanence. Each BitClout profile is intended to be associated with one person, giving them the ability to mint and profit from “creator coins.”
These creator coins are meant to be non-fungible tokens (NFTs) — digital images that are on the blockchain and thus have a fixed, non-replicable physical identity — giving people the ability to profit from their creation and trading. But these coins aren’t necessarily created by the account associated with them, which is one of the more intriguing (or controversial) aspects of BitClout.
Who Has a BitClout Profile?
When BitClout launched in March, 2021, there were already 15,000 accounts pre-loaded onto the site without any involvement by their supposed users. In less than a month, over $200 million worth of Bitcoin was deposited onto the platform despite little indication that many of the celebrity “users” of the service would ever opt into it.
As it turns out, some of BitClout’s “users” have since opted in. According to BitCloutPulse, as of January 7, 2022, the most popular profile on BitClout is Elon Musk. Several high-profile technology and cryptocurrency influencers and businesspeople rank highly on the network, including some who have actually verified their accounts, including venture capitalist Chamath Palihapitiya, entrepreneur and former CTO of Coinbase Balaji Srinivasan, and Coinbase founder and chief executive Brian Armstrong.
Who Is Behind BitClout?
Many users claimed their BitClout profile by tweeting something along the lines “Just setting up my BitClout,” with the hands and diamond emoji following.
This was a reference to two things: the first the notion of having “diamond hands” as the holder of a speculative or volatile asset like a cryptocurrency or memestock refusing to sell (the idea being that diamonds are very hard and thus someone with “diamond hands” wouldn’t “fold”). It’s also a reference to BitClout’s mysterious CEO. While the leader of the company has done several interviews with reporters, they have yet to reveal their identity.
But BitClout’s investors are quite well known and identifiable. They include Coinbase Ventures and the Winklevoss twins, two of the biggest names in crypto, as well as Andreessen Horowitz and Sequoia, two of high-profile Silicon Valley venture capital firms.
That there would be anonymity associated with BitClout is not surprising. BitClout is both inspired by and deeply enmeshed with the world of Bitcoin, whose creator Satashoi Nakamoto remains anonymous to this day.
How Can Someone Make Money on BitClout?
While BitClout claims to avoid some of the more negative aspects of mainstream social media networks, the idea is that money can be made by driving engagement or tracking those who do. Here’s a breakdown of the different ways a person could potentially make money on BitCloud.
1. Through rewards on your “creator coins”. According to BitClout, these tokens “allow users to support their favorite creators by buying their coin, a little like a combination of AngelList and Patreon.” Like NFTs and ERC-20 tokens, creator coins are built on top of a different cryptocurrency product and are connected to a mainstream crypto, in this case Bitcoin.
Every user has creator coins and they can be bought and sold with $CLOUT, the BitCloud cryptocurrency. With your own creator coins, you can make money through rewards that flow specifically to you. These are called “founder rewards,” and the default is 10% — meaning you would get one tenth of every purchase of your coins. On the other hand, this makes the coins more expensive for others to buy and may discourage users from buying them.
2. By holding on to your own creator coins. The idea is that the community would reward the content you create or whatever you do off the platform by bidding up the price of your creator coins, thus increasing the value of your holdings.
3. Buying other creator coins and then waiting for the price to go up. This can be done by buying some of the more expensive coins and hoping the price shoots up after the individual has real world success that makes them more popular.
While it may seem that these money-making opportunities are more for boldface names than for regular people, there have been reports of users buying up very cheap coins or making money from selling their own coins even if there’s no association with celebrities. That said, these money-making opportunities come with a fair share of risk — it’s entirely possible that a person wouldn’t make any money, or might even lose money.
What Can You Do With $CLOUT?
One of the major complaints about BitClout when the service launched was that there wasn’t a way to turn your $CLOUT back into Bitcoin, let alone dollars. A workaround emerged — a service called BitSwap that allows for exchange from $CLOUT to Bitcoin and Ethereum. $CLOUT is also listed on Blockchain.com .
How Much Is $CLOUT Worth?
As of January 7, 2022, the price for $CLOUT is around $76 and the overall $CLOUT market cap is just under $824 million. In theory the value of $CLOUT, which is necessary to navigate BitClout and buy creator coins, is a good indicator of the overall health and use of the BitClout ecosystem.
BitClout is a combo social media and cryptocurrency platform that allows users to create their own creator tokens and trade the tokens of other users, thus indicating the popularity of a given user and driving up (or down) the price of the tokens.
For investors interested in trading crypto, SoFi Invest® offers members the opportunity to buy and sell crypto from dozens of coins including Bitcoin, Ethereum, Dogecoin, Solana, Litecoin, Cardano, and Enjin Coin.
Photo credit: iStock/Luke Chan
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