There has been a lot of buzz around BitClout recently, so I thought I'd poke my head in and see what the fuzz was about.
BitClout has been hailed as the next big thing, a ponzi scheme and an outright scam, so what exactly is it?
At its core BitClout is a distributed social network running on a new blockchain. In its current form, it most like Twitter than other social networks, but that may change.
BitClout also gives ever user a coin, what they call a Creator coin. Users are able to buy and sell Creator coins. This enables speculation on users. If a user does something good, more people will buy their coin, if the user does something bad, people will sell their coin.
They also introduced the idea of a Founder reward. When a creator coin is minted (when the coin is at an all time high price), a percentage of that minting can be redirected back to the user linked to that creator coin. This mean that value users can in effect be paid for their activity on the platform.
This all sounds amazing, it can't all be good news?
Currently you can't transfer any BitClout out of the platform (some people have been buying and selling BitClout OTC) so any gains you make are locked in BitClout (you can buy and sell Creators coins as you wish). We don't know for sure when we'll be able to move our BitClout to other crypto or FIAT currencies.
Reserved without permission
Before launching the founding team of BitClout scrapped the top 15K accounts on Twitter and reserved those accounts on the platform. Other users were able to speculate on these coins, even though there weren't linked to their actual owners.
Some people have taken issue with this, and there are reports that a cease and desist has been sent to the BitClout founding team. We don't know what the legal exposure is here, though no law suit has been filed as of yet.
It is unclear how the governments will react to this new(?) type of asset. Will they try and regulate it? How can they regulate it?
Is it a scam?
We don't know for sure, but if the rumors about who is involved with the project (the founding team & investors), it seems unlikely that this is a scam. It could however still collapse, as the experiment they are conducting could prove to have too many obstacles.
For me, BitClout of full of potential, yes there are unknowns that could derail it. Being a part of the journey if it succeeds could be a lot of fun, and very profitable.
I'm not betting my house on BitClout, but making small bets with money I can afford to loose.
This is not financial advice, don't make financials decisions based on anything you read here!