Crypto social network BitClout arrives with a bevy of high profile investors, and skeptics – TechCrunch
While much of the recent wave of relentless hype around NFTs — or non-fungible tokens — has been most visibly manifested in high-dollar art auctions or digital trading cards sales, there’s also been a relentless string of chatter among bullish investors who see a future that ties the tokens to the future of social media and creator monetization.
Much of the most spirited conversations have centered on a pre-launch project called BitClout, a social crypto-exchange where users can buy and sell tokens based on people’s reputations. The app, which launches out of private beta tomorrow morning, has already courted plenty of controversy inside the crypto community, but it’s also amassed quite a war chest as investors pump tens of millions into its proprietary currency.
Early backers of the platform’s BitClout currency include a who’s who of Silicon Valley investors including Sequoia Capital and Andreessen Horowitz, the startup’s founder tells TechCrunch. Other investors include Chamath Palihapitiya’s Social Capital, Coinbase Ventures, Winklevoss Capital and Reddit co-founder Alexis Ohanian. A report in Decrypt notes that a single wallet connected to BitClout has received more than $165 million worth of Bitcoin deposits suggesting that huge sums have already poured into the network ahead of its public launch.
BitClout falls into an exploding category of crypto companies that are focusing on tokenized versions of social currency. Others working on building out these individual tokens include Roll and Rally, which aim to allow creators to directly monetize their internet presence and allow their fans to bet on them. Users who believe in a budding artist can invest in their social currency and could earn returns as the creator became more famous and their coins accrued more value.
“If you look at people’s existing relationships with social media companies, it’s this very adversarial thing where all the content they produce is not really theirs but it belongs to the corporation that doesn’t share the monetization with them,” BitClout’s founder, who refers to themselves pseudonymously as “diamondhands,” tells TechCrunch. (There’s been some speculation on their identity as a former founder in the cryptocurrency space, but in a call with TechCrunch, they would not confirm their identity.)
The BitClout platform revolves around the BitClout currency. At the moment users can deposit Bitcoin into the platform which is instantly converted to BitClout tokens and can then be spent on individual creators inside the network. When a creator gets more popular as more users buy their coin, it gets more expensive to buy denominations of their coin. Creators can also opt in to receive a certain percentage of transactions deposited into their own BitClout wallets so that they continue to benefit from their own success.
The company’s biggest point of controversy hinges on what has been opt-in and what has been opt-out for the early group of accounts on the platform. Most other social currency offerings are strictly opt-in. Users come to the platform in search of a way to create tokens that allow them to monetize a fanbase and build a social fabric across multiple platforms. The thought being that if the platforms own the audience then you are at their mercy.
BitClout has taken an aggressive growth strategy here, turning that model on its head. The startup has pre-populated the BitClout network with 15,000 accounts after scraping information from popular public Twitter profiles. This means that BitClout users can buy shares of Kim Kardashian’s social coin or Elon Musk’s without those individuals ever having signed up for a profile or agreeing to it. This hasn’t been well-received by all of those who unwittingly had accounts set up on their behalf including many crypto-savvy users who got scooped up in the initial wave of seeding.
The startup’s founder says that this effort was largely an effort to prevent handle squatting and user impersonation but he believes that as the platform opens, a sizable pre-purchase of creator coins reserved for the owners of these accounts will entice those users to verify their handles to claim the funds.
Perhaps BitClout’s most eyebrow raising quirk is that the platform is launching with a way to invest into the platform and convert bitcoin into BitClout, but at launch there’s no way to cash out funds. The project’s founder says that it’s only a matter of time before this is resolved, and points to Coinbase and the Winkelvoss twin’s status as coin holders as a sign of future exchange support to come, but the company has no specifics to share at launch.
While the founders and investors behind the project see a bright future for social currencies on the blockchain, many in the decentralized community have been less impressed with BitClout’s early efforts to achieve viral adoption among creators in a permission-less manner.
“BitClout will make a great case study on how badly crypto projects can mess up incentive engineering when they try to monetize social networks.” Jay Graber, a decentralized platform researcher involved in Twitter’s bluesky effort, said in a tweet. “Trust and reputation are key, and if you create a sketchy platform and mess with people’s reputations without their consent it is not going to go well.”
If BitClout comes out of the gate and manages to convert enough of its pre-seeded early adopter list that there is value in joining its closed ecosystem version of a social token then it may have strong early momentum in an explosive new space that many creators are finding valuable. The concepts explored by others in the social currency space are sound, but this particular execution of it is a high-risk one. The network launches tomorrow morning so we’ll see soon enough.
Bitcoin may be entering the ‘later stages’ of a bull market, crypto analysts say, as talk of a price plunge grows
Bitcoin has soared more than 700% in a year Dado Ruvic/Getty Images
Bitcoin conditions are “similar to the second half or later stages of a bull market,” crypto analysts said.
Glassnode’s report pointed to signs of long-term holders spending coins and a reduction in big wallets.
Talk of a bitcoin price plunge has grown, with a crypto entrepreneur saying there could be a 90% drop.
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Bitcoin may be entering the second half or later stages of a bull market, according to crypto analyst Glassnode, as nervousness grows in some quarters about a possible plunge in the price.
Glassnode’s weekly analysis report found there had been a pick-up in “wealth transfers” from long-term bitcoin holders to newer speculators, which the company said was reminiscent of previous market peaks.
The report said bitcoin bull markets eventually reach a “euphoric top”, which materializes as big holders increasingly spend their coins to realize profits.
Glassnode estimated long-term bitcoin holders had reactivated about 9% of supply so far in 2021 by spending coins, although this was below the 17% reactivation seen before the market’s crash in 2017.
“These studies suggest conditions are similar to the second half or later stages of a bull market,” Glassnode said.
The bitcoin price (BTC) was down 6% on Tuesday to $54,294, well off a high of $62,000 earlier in March, but still up around 700% from a year ago.
Glassnode also said on Tuesday that the biggest players - wallets with 1,000 to 10,000 BTC - had cut their holdings by 307,000 bitcoin since December.
Investment manager Timothy Peterson tweeted recent falls in big holdings “are often, but not always, associated with bear markets.”
On Monday, crypto exchange founder Bobby Lee told CNBC 2021 is a bull market for bitcoin, of the sort that comes around every three, or four years. He said the bitcoin price could “potentially” go as high as $300,000 this year.
Yet Lee said the “bubble” was likely to pop. “People should be aware that it could fall as much as 80% to 90% of its value from the all-time peak,” he said.
However, many bitcoin advocates point to growing institutional interest as a reason why bitcoin is unlikely to crash like it has in the past. Visa, Morgan Stanley and JPMorgan are some of the latest big names to get involved.
Dorsey’s first tweet sold for $2.9m in crypto auction – Daily Business
Digital deal
Buyer acquired the NFT on the ethereum blockchain
Twitter co-founder and CEO Jack Dorsey’s first-ever tweet has sold in a crypto auction for a staggering $2,915,835.47.
The tweet was not only the first by the CEO, it was also the first ever tweet on the social network.
Dated 21 March 2006 it was sold in the week that Twitter turned 15. It simply reads: “just setting up my twttr.”
The tweet was auctioned on Valuables, a platform that lets people make offers on tweets that are “autographed by their original creators.”
It had been available for three months and was sold as an NFT (non-fungible token) to Sina Estavi , the CEO of Bridge Oracle, and minted on the Ethereum blockchain.
A non-fungible token is a unique unit of data on a digital ledger called a blockchain, where each NFT can represent a unique digital item.
NFTs allow people to buy and sell ownership of unique digital items and keep track of who owns them using the blockchain.
Estavi outbid Tron CEO Justin Sun who offered up to $2 million.
Jack Dorsey has previously stated that the proceeds from the auction will go to the GiveDirectly charity for its Africa Response.