Is BitClout, an open source social platform, just another scam?
There is a new social network emerging in the crypto space by the name of BitClout. It contains Twitter accounts of more than 15,000 celebrities. The platform has coins pegged to these celebrity accounts. Crypto analysts are raising eyebrows at the practice of putting up user’s profiles without their consent.
The thing we learnt from the NFT craze is that everything can be tokenized. People are spending millions of dollars on purchasing stuff like small video clips and signed tweets. The buyers only get ownership of the original piece. Nonetheless, the sold content is freely available on the internet for everyone.
BitClout platform has built its business model around the same theory as NFTs. It tokenizes the profiles of reputable individuals. The worth of the token depends on the clout of a profile. In a conversation with Coindesk, the creator of BitClout articulated the idea behind the platform in the following words.
“The core insight behind BitClout is that if you can mix speculation and content together, you can not only get a 10x product that creates innovative ways for creators to monetize, but you also get a new business model that’s not ad-driven anymore,”
The coin pegged to Elon Musk’s Twitter profile has the highest value on the platform right now. It is valued at over $70K.
The young singer Ariane Grande’s profile coin is worth $26K. Likewise, other celeb Twitter accounts are valued at different prices. The account holders are allowed to claim their profile. However, most of the profile at the moment are in reserved mode.
BitClout is a proof-of-work blockchain. The native currency issued to creators is BTCLT.
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Big Shots In The Space
BitClout has the backing of some of the prominent names from silicon valley and the cryptocurrency industry. Sequoia Capital, Winklevoss Capital, Coinbase venture and Co-founder of Reddit Alexis Ohanian are investors in the platform.
Millions of dollars are already poured into the BitClout network. So, the tokenization of social currency is working pretty well. However, some people are smelling the smoke here.
Does This All Sound Like A Scam?
There are many red flags when it comes to BitClout. First of all, the profiles are on display without the permission of account owners. Secondly, there is no way for users to cash out from the platform. Lastly, people are questioning where the money is coming from and where it is going.
Who exactly are they funding, if it’s “no company behind it—just coins and code”?
— John { zaprite.com } (@_johnmagill) March 23, 2021
What Should You Do?
Well, the crypto industry is still in its infancy. There have been multiple crypto projects in the past that busted before the first flight. Hence, it is better to wait for the cat to come out of the box.
In crypto and life in general, if something sounds ‘too good to be true,’ then it probably is too good to be true. Do your own research before investing in a new venture. Furthermore, keep the exit doors in sight just in case the whole initiative flops.
