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The Dark, Democratizing Power of the Social-Media Stock Market

In early March, about fifty investors received links to an anonymously created, password-protected Web site. On the site was a seven-page white paper, which opened with the question “What Is BitClout?” BitClout, the paper explained, is a social network that runs on blockchain technology, allowing users to “speculate on people and posts with real money.” Every user is given a public price, which is the amount of money that it costs to buy his or her “creator coin.” With the platform’s native cryptocurrency (also called bitclout), users could buy the coin of any other user on the site. Purchasing a creator coin is a way to invest in someone’s reputation. According to the white paper, the coin is meant to be “correlated to that person’s standing in society.” If Elon Musk launches a rocket to Mars, his value should go up. If he uses a racial slur during a press conference, then, as the paper explained, “his coin price should theoretically go down.”

The investors were encouraged to explore the site, and to send the link to two to three other “trusted contacts” who might be interested. Soon enough, the link began making the rounds on social media. Within weeks, users were spending millions of dollars a day on the platform.

BitClout’s founders were completely unprepared. “They had no idea it was going to blow up the way that it did,” a seed investor closely involved with the project told me. The founders had intended to start with a “soft-launch,” so that they could debug the platform and incorporate feedback from the first few users. In the early days of the platform, photos uploaded to profiles regularly disappeared, and, at one point, an hour’s worth of transactions were deleted from the site history. Most notably, BitClout hadn’t been listed on any cryptocurrency exchanges—once you converted your dollars to bitclout, you couldn’t get them out. The founders were faced with a choice: pull the plug, or let it ride. They chose to keep the platform up.

Seventeen-year-old Sigil Wen heard about BitClout on March 12th. A senior at a public high school outside Toronto, Wen had spent much of the previous year online, Zooming into classes. That day, he was in his bedroom, scrolling through Twitter, when he came across a post summarizing the white paper. By the time he reached the end, he was convinced; he said that the idea “just resonated” with him. Wen began messaging people, asking if anyone had the password to the BitClout site. When he finally got it and set up a profile, he realized that, in order to invest in bitclout, he needed bitcoin—the most popular form of cryptocurrency, and, at the time, the only form accepted by the site.

Wen didn’t have any money of his own. (This past January, he had a balance of negative sixteen dollars in his Royal Bank of Canada savings account.) But his mom had some bitcoin, which she’d bought a few months earlier after hearing about it from a friend on WeChat. She lent all of it to her son, and he then converted a hundred and fifty dollars’ worth of it to bitclout. His first move on the platform was to persuade some of his friends to join, and the group proceeded to buy shares in one another. Next, Wen invested in the TikTok stars Dom Brack and Jeremy Hutchins. Three days later, he had made around six thousand dollars. He started planning to buy a new MacBook and a pair of AirPods Pro. “Back then, it was a lot, right?” he told me, a month later, over Zoom. Wen has an undercut topped with a mop of floppy hair, which he constantly runs his fingers through. He smiles often, the left corner of his mouth slightly higher than the other, producing an impish effect. We spoke on April 30th. At that point, he owned multiple BitClout profiles, which he told me had reached a combined estimated value of half a million dollars. Today, he’s grown that figure to approximately $1.7 million, or nine thousand and four bitclout, or sixty-eight hundred pairs of AirPods Pro. “To me, it’s just numbers,” Wen said.

Another number: this past April, New York magazine valued BitClout at more than a billion dollars. Around three hundred thousand people and entities have created profiles, ranging from students like Wen to celebrities such as Pamela Anderson and Benny Blanco, to institutions like the Museum of Crypto Art. The site itself is an amalgam of other social-media platforms: users write short musings and can post photos to their feeds, as they would on Twitter; and, by clicking a diamond-shaped icon, can even award money to posts they particularly like, a seeming twist on Twitch Bits. But, while those other platforms measure their users’ social clout through likes and follower counts, BitClout does so by attaching an actual sticker price. If you click on Kim Kardashian’s profile, you’ll see that her creator coin costs $5,890.85. Similar to a stock, the coin’s price is a function of how much demand there is for it.

Some celebrities on BitClout have blue check marks signalling verification, as they would on other forms of social media. But Kardashian has a gray clock icon, indicating that her profile is “reserved.” In other words, she has nothing to do with the account, though she can claim it at any time she wishes. When BitClout launched, it had fifteen thousand celebrity profiles—all scraped from the most popular accounts on Twitter. To date, many of these accounts have gone unclaimed, such as those of Donald Trump ($9,234.76), Cardi B ($5,153.51), and Joe Rogan ($4,667.72). BitClout users can still invest in them, but without celebrity backing the shares may be less valuable. (A notable exception is Elon Musk, who, at $55,580.55, has the most expensive creator coin on the platform.) BitClout has removed unwanted, unclaimed profiles at their owners’ request. Nevertheless, it’s not entirely clear whether it’s legal to create these profiles in the first place.

Buying someone’s creator coin is different from buying ownership over that person’s profile. Coin-holders are entitled to neither a cut of a creator’s future earnings outside the platform nor access to that creator. (Some creators promote their coins by offering additional incentives, like Zoom calls with coin-holders, but this is completely up to the creator, not a service that can be purchased.) The main way for an average person to make money on BitClout is to buy the coin of a creator whose social clout is going to rise. Creators, in turn, can make money in four main ways: by collecting transaction fees every time someone buys their coin (this is called a “founder reward”); by holding their own coin and trying to increase their personal value; by investing in other creators; and by earning diamonds on their posts, which function like tips. In other words, creators rely on how much their base literally values them.

Matt James ($1,219.65), the most recent star of “The Bachelor,” on ABC, told me that he owns only two forms of cryptocurrency: bitcoin and bitclout. Bitcoin, he said, is a way of “hedging against inflation and protecting my assets.” Bitclout, on the other hand, “is a bet on myself.” James was one of the first people, after the initial group of investors, to receive a link to the site, and he joined a few days later. “I interact with people on the platform differently than I would on Twitter, Instagram, and Facebook,” he said, meaning that he replies to most of the messages and comments on his BitClout posts. “I’m not responding to everybody’s D.M. on Instagram. That’s messy.” It would be messy for James, who, as the first-ever Black Bachelor, is one of the franchise’s most famous alumni. On BitClout, he is valued similarly to Chelsea Clinton ($1,270.49), Lindsey Graham ($1,238.89), and the Boston Celtics ($1,281.84).

James is also an investor in Calaxy, a social-media platform started by the N.B.A. player Spencer Dinwiddie ($1,595.76). Whereas BitClout users buy “coins” linked to creators, who can dispense whatever content in whatever way they like, Calaxy creators sell “tokens,” which users can exchange directly for services—things like live chats, access to private content, and prerecorded video messages, similar to the dynamic on the Cameo app. Calaxy, which has been in development for a couple of years, is expected to launch this summer. “I think monetization of the creator economy is still in its early infancy,” James said. “I think it’s only going to grow to continue to remove the middleman and allow creators to monetize themselves in direct ways.”

In the twenty-tens, social-media companies became some of the most valuable businesses in the world. But much of that value was built off unpaid labor, as users spent billions of hours crafting posts, shooting photos, and making videos. One might look at BitClout’s creator economy as a way of democratizing social-media platforms and sharing profits more equitably with artists, comedians, and provocateurs—the people who make social media an interesting place to be. After all, where would Twitter, Reddit, or TikTok be without the people who supply them with content? A site like BitClout is simultaneously empowering and dark. It collapses everything—art, humor, personhood—into money, laying bare just who, and what, we are willing to pay for.

And yet, where some see a revolution, others see a scam. Creators can’t really cash in on their own value without owning their own coins—i.e., investing. There’s also the fact that, three months in, there is still no formal channel for getting your money out of the platform. BitClout is working on getting added to official cryptocurrency exchanges, a process that, according to a seed investor, will likely be completed within the month.

When I played around on the Web site, the thing I was most struck by was how arbitrary the prices felt. Currently, Ariana Grande ($12,359.65) is valued much higher than Taylor Swift ($6,852.03). Both musicians have had billions of streams, and are among the most-followed celebrities on other social-media sites. It’s not obvious why Grande’s coin is nearly twice as valuable. Is it that her expected future value is higher, or is it just that BitClout users like her more? On the political side, Donald Trump, Jr., ($4,997.16) is far more valuable than Alexandria Ocasio-Cortez ($1,761.69). Matt Gaetz’s coin price peaked in early April, after the news of an investigation into his possible sex trafficking broke. Even the value of bitclout itself (one bitclout is currently equivalent to $188.79) is opaque. BitClout’s white paper claims that the price is pegged to two main factors: the value of bitcoin and the amount of bitclout in circulation—for every additional million bitclouts created, the price will double. And yet, while the price of bitcoin has tanked in recent weeks, bitclout’s price has remained relatively stable. What gives? (On June 12th, the supply of bitclout will be capped at fewer than 11.5 million coins, at which point the price of the currency will be determined purely by supply and demand.)

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