BitClout, a crypto social network, will launch out of beta this week

BitClout, a crypto social network that allows participants to buy and sell tokens based on people’s reputations, will launch out of beta this week. It is centered around possibilities to invest in a measure of individuals’ credibility and recognition.

Why should we care?
BitClout is both a platform as well as a digital currency. Users deposit bitcoin that is converted to BitClout tokens. As creators get more popular, tokens tied to their identities get more expensive. Consumers can reportedly buy tokens tied to the identities of 15,000 influential Twitter accounts – including Elon Musk and Katy Perry – without their permission. Individuals who tweet about the site can claim a portion of the tokens tied to their names. BitClout has drummed up $160M in funding from a who’s who of prominent investors, including Sequoia Capital, Andreessen Horowitz, Chamath Palihapitiya’s Social Capital, Coinbase Ventures, Winklevoss Capital, and Reddit co-founder Alexis Ohanian. Despite investor confidence in the platform, some industry analysts are raising alarm over possibilities of a scam. One report cited London-based Coinfirm, a risk-management firm, which suggested that BitClout has echoes of Bitconnect, a Ponzi scheme whose tokens reached nearly $400 in value in 2017 and later became worthless. One issue highlighted is that BitClout tokens can be purchased with bitcoin but they can’t be taken out of the network or be traded in for cash or bitcoin. “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,” tweeted researcher Jay Graber.