This article is not financial advice. Ensure to do your research before putting in your money in this volatile asset
BitClout is a new type social network that lets followers gain financially from the popularity of influencers they believe in.
It also allows influencers to monetise their popularity and engage with their followers in unique ways.
What is BitClout?
“BitClout is a new type of social network that lets you speculate on people and posts with real money” – BitClout explainer
It is like an exchange where you trade in stocks of people instead of a company.
What does clout mean?
“To have clout is to have influence or power. In popular culture, people with clout are seen as popular and cool.” – Dictionary.com
BitClout lets you trade on the “social clout” of an individual.
Say you believe in Elon Musk to solve challenging problems and you want to bet on him. Now if Elon Musk manages to land someone on Mars, his reputation will increase. So you will gain financially for believing in his potential.
How does it work?
Each profile on the platform has its own coin. You get your own coin once you create your profile.
The coins can be bought and sold by anybody.
The value of these coins is tied to the reputation of the person and their price fluctuates based on buying and selling.
Price of the coin increases when more people buy it and decrease when they sell it.
Okay, so people buy and sell my coins. But what is in it for me?
You can set a founder reward percentage to get a cut whenever people buy your coins.
For example, if you have set the percentage at 10%. When someone buys 100 of your coins, you get 10 coins.
However, this cut is only for “net buys”. If someone buys 100 coins, then sells them, and then buys 100 coins again, you will only get 10 coins.
Why BitClout may be a success?
Interesting use cases other than trading
There can be various uses of BitClout apart from just speculating the price of a coin.
I. Minimizing spam for influencers
Few ways in which spam can be reduced:
- By having a minimum number of coins needed before a follower can message the influencer on the platform
- Prioritizing messages from the followers based on the number of coins the person holds
II. Opportunity for the influencer to have better engagement with coin holders
- By offering exclusive content/merchandise for the largest holders.
- Premium content for the holders at a subscription of coins every month.
Such use cases could help the influencer engage with the followers in a better way. It will also make it easy for the followers to reach out to an influencer.
Ultimately this increases the demand for their coin.
Incentive for increasing the popularity of another person
When you engage with the posts of influencers in existing popular social media, you help in increasing their popularity.
Even though their popularity increases and they make money, you don’t get any financial rewards.
But in BitClout, the value of the coins you are holding increases if the popularity of the person increases.
So if the popularity of the influencer increases, there is something for those who help them increase their popularity.
Funded by well known VCs
Few of the prominent VCs and individuals who have invested in BitClout are Sequoia Capital, Andreessen Horowitz, Chamath Palihapitiya’s Social Capital, Coinbase Ventures, Winklevoss Capital and Reddit co-founder Alexis Ohanian (Source)
As users have to put in their money, backing by such VCs adds trust to the platform.
Speak your mind on the platform
It is a social media with decentralised servers.
BitClout is based on blockchain. The BitClout nodes can be run by anyone. Each of the nodes stores a copy of all the data.
So there is less chance of you being de-platformed or facing any censorship.
Even though it is interesting, why BitClout may fail?
Many accounts are created on the platform without permission from the individuals
Many famous Twitter personalities have their profiles already created on BitClout without them knowing about it.
And anyone can trade coins of these individuals even though they are yet to join BitClout.
Many of the individuals are asking for removal of their profiles from BitClout.
No option to withdraw funds from the platform
Currently, it is only possible to add funds to buy the creator coins.
BitClout is working on adding a withdrawal feature. But nothing is definitive on the timelines yet. (Source)
I feel this is to hold the users onto the platform.
But letting users know when they will be able to withdraw funds will reduce their anxiety. It will also lead more people to use BitClout.
Mess the reputation of individuals for gains
The platform may run into the problem of people shorting other people.
The reputation is tied to money.
So there is a possibility of bad actors maligning the reputation of other people for financial gains.
BitClout is an experiment, if successful, will change the way we use social media.
If you have any other use cases or any apprehension, do share them with us.
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