What Is BitClout, And How Is It Impacting Monetization For Creators?
If Bitcoin and Twitter were in a relationship, it might look like BitClout; a blockchain-based social network that allows users to speculate on the social clout of personalities in an attempt to decentralize money on social media and put it more in the hands of users.
On the surface, the platform explains itself simply, but as one digs deeper, there are many questions users may have. Influencers may want to take advantage of BitClout, but could be skeptical of its process and may not want to back a company that could hurt their brand.
Here, we will break down the basics of BitClout and how others are contributing to the conversation about this new platform.
Every profile on the BitClout platform gets its own coin that anybody can buy and sell. These are called “creator coins,” and users can have their own coin by creating a profile. The price of each coin goes up when people buy and goes down when people sell.
To buy someone’s coin, users simply navigate to their profile and hit “Buy.” As BitClout explains, coins are a new type of asset tied to an individual’s reputation rather than to a company or commodity. They are “truly the first tool we have as a society to trade ‘social clout’ as an asset,” and the value of someone’s coin should correlate to that person’s standing in society.
Furthermore, likes can be re-imagined as purchases of the creator’s coin. It costs money to like something, so users buy coins associated directly with content which should increase the value of their investment.
The appeal for some is that BitClout and influencers are directly associated and should benefit from their status financially. Of course, with that comes considerable intrigue and skepticism.
The Possible Benefits Of BitClout
According to an April 2021 New York Magazine article, BitClout’s financial backers have put more than $100 million into it. They include a roster of Silicon Valley venture capitalists, like Andreessen Horowitz, Sequoia, Social Capital, along with high-profile crypto investors Digital Currency Group and the Winklevoss twins. The site traded over $225 million within a month of its launch and is worth about $1 billion.
Though many people aren’t sure what to make of BitClout, it brings in enough money from respectable investors to be considered legitimate. The company touts itself as “A new kind of social network. A new kind of blockchain,” and claims that its intention is to keep money decentralized rather than it going into the hands of a few large corporations. BitClout explains that influencer platforms have had relatively little innovation with regard to how influencers monetize, and most earn much less than they should on these existing platforms – if they earn anything at all.
Influencers could benefit from a system that democratizes money and is valued based on the efforts of the individual and their reputation rather than an influencer who may only get a small percentage based on a platform that makes the bulk based on the influencer’s efforts.
“They are truly the first tool we have as a society to trade ‘social clout’ as an asset. If people understand this, then the value of someone’s coin should be correlated to that person’s standing in society,” according to a document on BitClout’s website.
The Controversy Surrounding BitClout
Though the concept seems interesting, some find BitClout practices a bit sketchy. They describe themselves as “not a company,” but a “new type of social network.” Users pay for likes and shares and then are supposed to reap the benefits of the influencer’s popularity. Still, many find users don’t really make money off of these coins and, as one venture capitalist said in the New York Magazine article, it’s “borderline scammy.”
First, once a BitClout coin is purchased, it cannot be changed back to bitcoin, which can be a red flag for some users. Critics also call attention to how BitClout copied 15,000 profiles of famous people and influencers from Twitter and opened accounts in their names without their permission. The company explains that they have invited each person in the system to claim their account, but many influencers see this approach as unethical.
Most of the people for whom BitClout created accounts, using their names and photos, have distanced themselves from the platform—despite the fact that the accounts, if claimed, offer their owners a share of the crypto coins, ranging in value from a few hundred dollars to millions (and usually the influencer has access to about 10 percent).
Another reason few influencers haven’t claimed their “reserved” accounts is that they don’t want to associate themselves with a company that trades in bitcoin, and being backed by a company like this can come with some risk to their reputation. It’s not like they can support the platform under the radar—an influencer must tweet about BitClout to access the account, which offers some marketing for the company.
With any new platform comes a level of caution, especially as influencers try to stay relevant and accessible. At the same time, moving into another platform that fails or has any controversy behind it can also be dangerous. We’re not sure how this platform will play out, but there could be some benefits if the BitClout mission is successful. In the meantime, influencers should always stay aware of new research about the company to determine if it is a risk worth taking.