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BitClout social network sells celebrity tokens 🕵️

BitClout social network sells celebrity tokens and promises to earn money on their reputation: why is it called a crypto pyramid? At the end of March 2021, the popularity of the decentralized social network BitClout — an analog of Twitter with a built-in exchange of tokens tied to the popularity of users-increased.

To attract attention, BitClout pre-registered 15 thousand of the most popular Twitter users without their knowledge-Barack Obama, Elon Musk, Justin Bieber and others. In BitClout, you can buy their tokens or promote your own, earning on the rise and fall of popularity.

Before the public beta, the social network raised more than $165 million in bitcoins from well-known investors, including Sequoia Capital, Andreessen Horowitz, Coinbase Ventures and Reddit co-founder Alexis Ohanian.The startup's work was criticized by IT specialists. The creators were accused of illegal earnings on someone else's fame, and elements of a financial pyramid were found in the scheme of the social network-after all, you can only invest money in the project, but not withdraw it.

How BitClout works
Decrypt calls BitClout "a primitive hybrid of Twitter and Robinhood." This is a social network based on the blockchain, which is similar in principle and interface to Twitter: you can also create a profile in it, write messages up to 280 characters, subscribe to other users.Its main difference from Twitter is that users are assigned their own Creator Coin token, the value of which depends on the popularity and reputation of a person. The tokens are traded for the internal cryptocurrency of the BTLCT platform, which is sold only for bitcoins.

After leaving the beta test, any user of the social network will be able to create Creator Coin, as long as they are available only to famous personalities.

According to the idea of the creators, the value of the Creator Coin will change depending on the user's actions: if Kanye West releases new sneakers or Elon Musk gets to the Moon, their reputation and social capital, and therefore the value of their token will increase.

If they do something to ruin their reputation, their reputation will fall along with the price of the token.

BitClout users can play on the internal exchange, speculating on the future popularity of a person and his reputation. Token holders receive 10% off their Creator Coin transactions.

There are no ads or other monetization models on BitClout other than buying or mining BTLCT.

***The developers claim that the decentralized network will be independent due to its distribution on a set of autonomous blockchain nodes, as well as resistant to censorship — it will not be moderated like ordinary social networks. In the near future, BitClout promises to open the project code.There are already questions and complaints about Bitcloud
BitClout creator Nader al-Naji has already launched a crypto project with an investment of $133 million — it failed
The founder of BitClout asks to remain anonymous in the media and introduces himself to Diamondhands (a reference to the Reddit community of risk investors), but his identity is known — this is a former Google engineer Nader al-Naji.

In 2018, he wanted to create a cryptocurrency with a stable exchange rate and launched the Basis project with investments of $133 million from Google Ventures, Andreessen Horowitz, Bain Capital Ventures and others.

But al-Naji did not take into account the requirements of US law, according to which tokens were equated with securities. The use of Basis would have to be restricted only to accredited investors in the US, so the creator decided to close the project and return the investment.It has the signs of a financial pyramid scheme
One of the main problems of BitClout is the monetization system.

To trade tokens, update photos, post messages, and until recently, register in a social network, you need to buy BTCLT, the BitClout cryptocurrency. It is sold only through Bitcoin.

It is not yet possible to withdraw the money earned in BTCLT from BitClout — according to Nader al-Naji, the team is currently working on the reverse conversion of BTCLT into bitcoins, but does not name specific terms.

Reddit users saw signs of scam and fraud in BitClout: the social network attracts them, makes them spend bitcoins, but only promises to cash out the earned money in the future

So far, all the tokens on the platform are simply useless, says Coinfirm, a London-based firm that specializes in tracking suspicious cryptocurrency transactions.

So does James Prestwich of Summa. He points out that the market capitalization of BitClout tokens can be overstated, and the algorithm is designed in such a way that the social network is profitable only as long as the value of the tokens increases. This overstates the" paper " profit of investors and looks like a pyramid scheme that attracts high and simple earnings.

Other crypto experts compared BitClout to the BitConnect crypto pyramid, which promised users profits and daily bonuses and closed in 2018 — the losses of investors are estimated at $3.5 billion.

It's unclear where the money is going
The Decrypt publication studied BitClout transactions and found out that all users ' bitcoins are transferred to only one wallet, from where they are distributed across three exchanges: 88.41% on Amber Group, 11.17% on Kraken and 0.42% on Coinbase.

In addition to the exchanges, the money also goes directly to the account of Hydra — the largest darknet platform on the Internet, the research agency CipherBlade found."Fans" of BitClout on Twitter do not have a large number of subscribers and practically do not write anything, but only promote the project, which also looks suspicious, writes Decrypt.

CipherBlade has examined transactions in Hydra-they indicate that BitClout may have paid an unknown person from Nigeria to attract bots to promote BitClout in social networks.

Despite the accusations and concerns-investors are real
The Block analyst Frank Chapparo spoke with Coinbase and checked the information about BitClout investors — according to him, it is "safe to say that all investments are real."
One of the first investors is Race Capital General Partner Chris McCain. According to him, he learned about the project from friends, is not connected with it in any way, but participated in the closed beta. The capitalization of its tokens has grown to $156 thousand.
He does not disclose how much he invested in BitClout — but says that "too much, although the team managed to create a well-thought-out service."
"Once you get involved and start investing in people at the start, and they (then) get verified on BitClout, it's fun," McCain says.
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His friend and investor Andy Artz invested $18,000 and received $34,000 worth of tokens after posting a tweet about the project. Another investor — Michael Arrington-received about $756 thousand in Creator Coin. However, none of them can withdraw money yet.***


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