In Part One of our series on BitClout, we introduced you to a new platform designed to attach investments to reputations, but the concept comes with some serious skepticism as investors wonder if it is anything more than a tech-centered Ponzi scheme.
Users invest in BitClout by depositing bitcoin into the site, which the platform instantly converts to BitClout tokens. Those tokens can then be used to invest in individual creators. As that creator amasses more tokens, their popularity causes their coins to become more expensive. Creators have the option to deposit a percentage of transactions into their own BitClout wallets as users invest in their profiles.
What are the controversies surrounding the site? There are two main subjects raising eyebrows:
The Opt-In/Opt-Out Question
Most sites organized around social currency are opt-in, with users coming to the site looking for ways to invest in innovative ideas for monetizing their fanbase and build a reputation and income across multiple platforms. BitClout has used an aggressive approach to the opt-in idea, pre-populating the BitClout universe with 15,000 accounts from Twitter profiles.
This means that someone that has never visited the BitClout site could have an account set up on their behalf, an idea that isn’t sitting well with everyone. BitClout early investors hope that when profiles begin amassing value, it will entice the owners of those profiles to get involved.
The Hotel California Effect
Right now, users can invest in BitClout tokens, effectively “voting” for the reputation of different profiles on the site. But while they can invest, there’s no way to cash out. This has raised some eyebrows, but backers insist that some of the big Silicon Valley names investing in the site should reassure potential investors that any concerns around this topic will be quickly resolved.
Will It Take Off?
While there’s plenty of conversation about BitClout, many in the industry wonder whether it really has the momentum to take off. It has not successfully achieved a viral adoption among creators in a way that ensures a smooth start.
In fact, many in the decentralized community suspect that BitClout may serve as a case study for how not to begin an incentive engineering project on social media.
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