With cryptocurrencies growing more and more popular, it’s not surprising that BitClout’s unique crypto social network is getting so much attention. BitClout is a decentralized social network platform where it’s users can buy and trade tokens on their favourite influencers (more about that later).
“Its architecture is similar to Bitcoin, only it can support complex social network data like posts, profiles, follows, speculation features, and much more at significantly higher throughput and scale. Like Bitcoin, BitClout is a fully open-source project and there is no company behind it—it’s just coins and code.”
So, Bitclout has people talking but not all the chatter is good because this platform has some major red flags.
The founder of BitClout is anonymous, but goes by the pseudonym “Diamondhands.” Of course, the problem with anonymity is that it leads people to believe that there is something to hide.
Then there is the monetization scheme—here’s how it works:
“The BitClout blockchain has its own native cryptocurrency, called BitClout, that you can use to do all kinds of things on the platform, including buy a new type of asset called “creator coins,” discussed below. Anyone can buy the BitClout cryptocurrency with Bitcoin in minutes through the app’s built-in decentralized exchange, available on the “Buy BitClout” page.The price of BitClout doubles for every million BitClout sold. This makes BitClout naturally scarce, resulting in 10 to 19 million BitClout minted in the long run (less than Bitcoin’s max supply of 21 million).”
So, the only way to buy BitClout is by using BitCoin—but you can’t buy BitCoin with BitClout.
To date, Diamondhands has received $200 million in Bitcoin from investors.
BitClout has set up celebrity profiles so users can purchase what they call “Creator Coins”—each profile on BitClout gets its own unique Creator Coin. Basically BitClout users can purchase their favourite social media influencer’s coin. The price of each coin goes up when people buy and goes down when people sell.
Currently, Elon Musk’s Creator Coin is the most expensive at $70,000. But here’s the thing—none of the influencers gave BitClout permission to use their profiles, they are not being compensated by BitClout, and none of them own their Creator Coins.
That’s right, BitClout is simply taking people’s identities and selling it as crypto. In other words, influencers are being monetized without their consent—BitClout hasn’t been given the right to “trade” their identities.
So how do users sell their BitClout? They can’t. Can users get their BitClout out of the platform? No. What about trading BitClout for any goods and services? Once again, that’s a no.
Interestingly enough, VC firm Sequoia Capital has become a backer. Chamath Palihapitiya, the Winklevoss Twins, and Reddit cofounder Alexis Ohanian are also investors in the crypto token. Sure, BitClout has managed to reel in some big backers but let’s not forget that regular people are risking their hard earned money to be a part of this social media experiment.
If BitClout turns out to be a crypto scam, wealthy investors won’t go hungry, but for inexperienced investors who don’t have unlimited funds, BitClout has the potential to do some serious damage.
Yes, BitClout is selling itself as a decentralized social media platform, and maybe they intend on correcting some of their questionable practices, but as of now, they are in fact scraping people’s profiles without permission and convincing people to put their money into BitClout with no way to cash out—that should set off major alarms.
Currently, my team and I are building Manyone, a decentralized, self-sovereign social networking app but unlike BitClout, we’re not stealing identities, there’s no tulip mania-level speculation and I’m not anonymous—you all know my name.
We’re champions of self-sovereign identity—that is to say, we believe you should own your identity, and that nobody should monetize it without your consent.
Consider us the anti-BitClout.