What Is Bitclout and How Does It Work?
BitClout, also known as DeSo (which stands for “Decentralized Social”), is a social network and cryptocurrency exchange that combines speculative trading and social media. BitClout is an open-source project built on its own custom blockchain (DeSo) from the ground up, just like Bitcoin’s, except it can handle more complex social network data like posts, profiles, followers, speculation features, etc.
Brief History of Bitclout
The creator/founder of Bitclout, Nader Al-Naji, became interested in “mixing investing and social media” in early 2019. In May 2019, he began developing a custom blockchain but didn’t tell anyone until November 2020. However, in the fall of 2020, al-Naji used his real name to pitch BitClout’s own investors and started posting job listings for a “new operation.”
Although BitClout was not scheduled to launch until mid-2021, its development was accelerated in January 2021 due to a “zeitgeist about decentralized social media” and “this news about GameStop that ignited a trend towards investing becoming a more social thing.” The first block of BitClout was mined on January 18, 2021. The next block was mined on March 1, 2021; after that, mining accelerated.
About fifty investors received links to a password-protected website with the BitClout white paper in early March 2021. They were encouraged to look around the site and share the link with two or three other “trusted contacts.” Users were spending millions of dollars per day on the platform within weeks. The platform’s creators were “completely unprepared,” having planned a “soft-launch,” but decided to keep the platform running regardless.
BitClout launched a private beta on March 24, 2021. Sequoia, Andreessen Horowitz, Social Capital, Coinbase, Cameron Winklevoss, Alexis Ohanian, TQ Ventures, Arrington Capital, Polychain, Pantera Capital, Digital Currency Group (CoinDesk’s parent company), Huobi Global, and Variant are among the company’s early investors.
The “BitClout Exchange Listing API” went live on April 26, 2021, and BitClout developers were working on integrating it with Coinbase’s Rosetta standard to enable the cryptocurrency to be listed on Coinbase as of that date. BitClout’s open-source Rosetta API implementation is operational as of July 2021.
The supply of BitClout was capped at 10.8 million coins on June 12, 2021, in what @diamondhands called the “Deflation Bomb” and “the most deflationary event in BitClout history” (consisting of the then-current supply of 11 million coins as well as the 275k coins to be mined in the next 30 years.
The value of the coin is then determined by supply and demand. BitClout added the ability for users to mint and purchase NFTs within the platform on July 18, 2021.
Who is @diamondhands?
Traders on the social media platform coined the unique phrase ‘Diamond hands, and it quickly became popular. ‘Diamond hands,’ refers to someone who has a high-risk tolerance for the assets they own, and don’t give in to peer pressure and sell their assets. However, on Bitclout, @diamondhands is the pseudonym of BitClout’s enigmatic founder.
Initially, @diamondhands was anonymous on the Bitclout platform which was not surprising. Since BitClout was both inspired by and deeply entwined with the world of Bitcoin, whose creator, Satoshi Nakamoto, is still unknown.
However, when BitClout rebranded to DeSo, which stands for “Decentralized Social,” on September 21, 2021, Diamondhands confirmed his identity as Nader Al-Naji. The rebrand project raised another $200 million, which was used to establish the DeSo Foundation.
How Does Bitclout Work?
When BitClout first launched in March 2021, it already had 15,000 Twitter influencers’ profiles pre-loaded onto the platform without the involvement of their owners. The “clock” icon next to the names of these “reserved” profiles indicates that the profile owner has not yet joined. Elon Musk is the most popular profile on BitClout, according to BitCloutPulse, as of January 7, 2022.
Several high-profile tech, Blockchain, and crypto influencers have been ranked highly on the Bitclout platform, including venture capitalist Chamath Palihapitiya, entrepreneur and former Coinbase CTO Balaji Srinivasan, and Coinbase founder and CEO Brian Armstrong, all of whom have verified their accounts.
However, you can buy and sell their coins even if they aren’t yet on the platform. To do this, you can either search for their profile or go to the creator coin leaderboard to see what they’re up to.
What are Creator Coins?
BitClout has its own native cryptocurrency, $DESO, which you can use to do various things on the platform, including engaging posts and buying creator coins. On Bitclout, every profile is given its own coin, which can be bought and sold by anyone. These coins are known as “creator coins,” and you can get your own by simply creating a profile.
When people buy your coin, the price rises, and when they sell, the price falls. Creator coins are non-fungible tokens (NFTs), which are digital images on the blockchain with a fixed, non-replicable physical identity, allowing people to profit from trading or investing in them. In essence, the value of creator coins depends on the individual’s reputation and social clout.
As a result, people can buy/invest in their coin and profit financially from them when they realize their potential. Traders can profit from the ups and downs by buying and selling them. Go to their profile and click “Buy.” Bitclout allows you to keep a certain percentage of your coins as a creator.
This is called a “founder reward,” and if you set your founder reward to 10%, 10 $DESO will be sent to your wallet when someone buys 100 $DESO of your creator coin. The best way for creators to own a piece of their coin’s upside is for them to buy it when they create their profile and then set their founder reward percentage to zero.
This works because the coins are the cheapest at the start of the curve, which reduces friction on subsequent purchases of their coin. Nonetheless, a 10% founder reward is a “sane default” that ensures creators will keep a portion of their coin even if they do nothing.
How To Make Money on BitClout
While BitClout claims to avoid some of the more negative aspects of mainstream social media networks, the concept is that money can be made by encouraging people to engage or rewarding those who do. The following is a list of how a person could make money on BitClout.
1. Through founder’s rewards
These tokens allow users to support their favorite creators by buying or investing in their coins, just like AngelListist and Patreon. Creator coins are built on the DeSo and linked to a mainstream cryptocurrency, in this case, Bitcoin. Every Bitclout user has creator coins, which can be traded on the platform using $DESO.
2. HODLing and trading other creator coins.
This can be accomplished by buying some more expensive coins and hoping that the price rises after the individual achieves real-world success and becomes more well-known.
3. Investing in your own creator coins.
The idea is that the community will reward you for your off-platform work by bidding up the price of your creator coins, thereby increasing the value of your holdings.
Conclusion
BitClout is a social media and cryptocurrency platform that allows users to create their own creator tokens and trade the tokens of other users, indicating a user’s popularity and driving the price of the tokens up (or down).
Frequently Asked Questions
What is DESO?
DESO is the native cryptocurrency of the Decentralized Social blockchain, which is a platform for decentralized social media applications. DESO is a cryptocurrency that can be used to buy “social tokens” and NFTs and create profiles and posts for Decentralized Social applications.
What is the coin price of $DESO?
The current $DESO price is $55.79 (at the time this article was written), with a trading volume of $7,729,067. With a live market cap of $390,919,503, $DESO is currently ranked #229 on CoinMarketCap. There are 8,884,536 DESO coins in circulation, with a maximum supply of 10,808,492 DESO coins.
