Smash Hit or Trash It? The World’s First “Celebrity” Cryptocurrency
“Should I buy a cryptocoin representing Elon Musk’s Twitter persona?”
I’m new to cryptocurrency, and procuring some Bitcoin was hard enough for me to grasp.
But now there’s a new coin-trading platform on the scene and the concept is… a little odd.
Actually, some details about this site are downright suspicious.
Like the fact that the developers of this new platform have chosen to remain completely anonymous.
At the same time, in order to trade through them, you have to send them some of your already-held Bitcoin they will then exchange for their new coin.
Which sounded to me like a way for these unnamed founders to make off with some free (and very valuable) Bitcoin.
There’s another odd layer to this mysterious coin platform, however.
Because as untrustworthy as that all seems, the idea caught the attention of some legitimate venture capitalist backers.
Sequoia Capital, Andreessen Horowitz, Social Capital, TQ Ventures, Coinbase Ventures, Winklevoss Capital, Arrington XRP Capital and others have already invested.
So is this a lucrative idea? Or just another crypto project destined to be a dud?
Let’s dive into it…
BitClout is a social media blockchain.
At first, it just seems like a combination of some buzzwords, but let me try to break it down…
BitClout wants to be the first decentralized social network.
As you probably know, Big Tech runs the internet.
Apple dictates what shows up in its App Store… Google uses its algorithms to control what pops up when you search something… Facebook, Twitter and Instagram all have a say in what you see when you’re scrolling on their platforms.
They can also suppress certain content — which has been a subject of constant controversy over the past few years.
But BitClout, at its core, wants to take some of that power away from a handful of companies and put it back in the hands of people… while also opening up the possibility for people to profit.
It has its own coin (BTCLT) that you can trade on its platform just like any other cryptocurrency.
Like I pointed out, the only way to get your hands on some BTCLT is to exchange it for Bitcoin, a transaction that cannot be reversed.
Once you have the BitClout coin, you can start buying into creators.
If you look on the right side of the image above you’ll see some popular online creators.
Based on the number of people that have already bought the coins of these celebrities, they are now the top most valuable creators on the internet.
BitClout scraped their online personas and replicated them onto its own site. All the celebrities have to do is verify themselves on BitClout’s platform and they can start promoting their coins to get more buyers.
Developers made coins for thousands of famous people… Donald Trump is on there, as are Pamela Anderson and LeBron James, just to name a few.
If I buy any of these, it makes the value of their coin go up, just like in any other market scenario.
But the value of the coin is also tied to the creator’s reputation.
For example, if a singer was about to release a new and potentially popular album, their coin would theoretically gain.
It could be a way to keep celebrities accountable, while also putting some control into our hands since this is a buyer-run market.
But while there’s positive potential in “trading reputations,” there’s also a potential for it to get ugly.
Shorting the Rich and Famous
While social media and blockchain have come together before, the concept of trading actual creators and not the content they’ve produced is a new one.
Trading based on a specific post is really short term — the attention of the internet is fleeting, after all.
Speculating on a celebrity’s reputation is a different side of the market. In theory, you would be able to invest in creators for the long term.
On the flip side… there’s also the possibility of people trying to profit from celebrities’ downfalls.
Opening up a short position on a famous person and then working to bring down their reputation could be a darker side of BitClout’s uses.
Not to mention there’s still no market for these coins: You can’t cash them out for anything as of this time.
So I’m not going to be lining up to trade my Bitcoin for an Elon Musk coin just yet.
That being said, Sequoia Capital and other venture capitalists aren’t backing this platform for nothing.
The opportunity for BitClout to be a legitimate form of trading is getting investors buzzing, which makes it worthy to keep it on our radar.