In a tweet, Coinbase CEO Brian Armstrong fueled a controversy that is far from abating. “I have just configured my bitclout”, he wrote on the media, in reference to a platform halfway between a stock exchange and a social network based on the blockchain, which continues to attract criticism for its model.
Digital tokens and NFTs have given birth to a new market on the internet, making it possible to give a price to events, digital works, by marketing their certificate of authenticity. Some platforms such as Sorare have specialized in sports, such as football, by marketing NFTs on players, like collectable cards.
BitClout, on the other hand, goes much further. How to describe it? Perhaps like a stock exchange where users exchange tokens, known as “designer tokens”, attached to nothing but individuals. The price of each person’s token is estimated based on demand, “Correlated with the position of that person in society”. Forget stocks or cryptocurrencies like Bitcoin, here the list of available digital assets consists of first and last names.
Just setting up my bitclout 💎🙌https://t.co/0BmvSJT90O
— Brian Armstrong (@brian_armstrong) June 15, 2021
Buy Elon Musk, Justin Bieber, Samsung, FC Barcelona
By clicking on the site, you will discover the thousands of profiles of stars, companies and even football clubs available. The most expensive token is Elon Musk’s, which is currently trading at $ 114, for a full profile valued at $ 56,178. Going through the list, we found absolutely everything: from the most popular singers, to FC Barcelona, to agency journalists. Reuters, and ordinary users who have created their profile.
On paper, the platform claims to be decentralized and blockchain-based. It invites its users to exchange bitcoins for its own cryptocurrency, the $ CLOUT, which has also been accessible on Blockchain.com for a few days. For a long time, the site was very difficult to access and use: you had to access a special password to integrate the platform, and $ CLOUT could not be exchanged for bitcoins again.
Some users have made big fortunes. This is the case of Sigil Wen, a young 17-year-old student in Toronto (Canada), who had won a full report by the New Yorker A week ago. Thanks to a few hundred dollars of bitcoins that his mother had bought earlier, on the advice of a friend, the youngster had started to invest in personalities on BitClout. Today, he has built up a fortune of $ 1.7 million.
Controversial, but appreciated
Coinbase CEO Brian Armstrong’s support for BitClout has led to widespread criticism, reported Cryptonews yesterday. In addition to the model, some criticized the man for pushing young investors towards questionable cryptocurrencies. “You are telling this bullshit instead of helping people understand the importance of Bitcoin”, wrote one user on Twitter.
That said, BitClout is far from hated by the crypto community, and even attracts big investors. Sequoia, a16z, Social Capital, DCG, Pantera, Huobi, Winklevoss Capital, North Island Ventures… many of them, and of great renown, have invested in the platform. Before being a simple stock exchange to invest in personalities, BitClout wants to define itself as a full-fledged social network where it is possible to publish posts like on Facebook or Twitter.
The incentive to invest, in addition to the possible capital gains, is worked by BitClout by access to advantages given by personalities. Those who claim their account (BitClout automatically generates their profile, then everyone can accept to manage it or not), can offer rewards such as messages reserved for investors, calls on Zoom, etc …
Difficult to know if the sauce will take. “Starting a cryptocurrency is a bit like starting a religion. Without large-scale membership, the system looks like a cult ” wrote Caroline Lester, a journalist at the New Yorker. BitClout was released in March in a version accessible only to a few people (long password protected). But already, the company says millions of dollars in transactions are made every day.