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WTF is BitClout?

Moolah
Hey friends,
I wrote a short essay this week exploring BitClout, which is kind of like if Bitcoin and Twitter had a baby. You can find it at the end of this newsletter.
Instead of a “Tweet of the Week”, I also decided to showcase an “NFT of the Week”. Watch this skit from SNL if you want to learn more while seeing Pete Davidson hilariously parody Eminem.
Hope you enjoy this week’s discoveries, and feel free to reply if anything resonates with you!

Discoveries
Paul Ford, co-founder & CEO of Postlight, took over an entire issue of Bloomberg Businessweek in 2015 to explain code to a wide audience. He weaves together a hilarious fictional story of a non-technical mid-level manager with an explanation of what coding is and popular issues surrounding it (e.g. “Why Are Coders Angry?”). The essay in its entirety can be accessed through the link above; if you’re into programming or even considering it, I highly recommend setting aside a Sunday afternoon (or even a few days) to reading it.
Hasu is an independent crypto researcher focused on network security and game theory economics. Widely known within the industry, he joins the Bankless podcast to talk about EIP-1559, a proposal that radically changes how Ethereum users will pay for transactions. Though a very technical and complicated subject, I was impressed with Ryan and David’s ability to synthesize some of Hasu’s explanations and summarize them in a way that helped me make further sense of the topic. If you care about the future of gas fees on Ethereum, EIP-1559 should be on your radar.
Though this article is only three years old, it’s crazy how fast the pandemic has accelerated FinTech and the keen observations Chris Skinner made in his essay. Digital banking is more than having an app: it’s a transformation of most banks’ business models; yet, a survey found that 76% of decision makers at large banks thought otherwise. The most valuable startup in the world is a FinTech company: Stripe, worth more than SpaceX, was recently valued at $95 billion. Goldman Sachs, at the time of this writing, is worth approximately $110 billion. With crypto also disrupting traditional financial institutions, it’s only a matter of time before we discover which banks actually went digital, and which ones failed to adapt.
NFT of the week
This week's essay
I stumbled upon something new recently called BitClout.
I think The Hustle hit it right on the money when they called it “a stock market for people”.
Technically, it’s a social media platform powered by a blockchain. Here’s what that means:
  • A group of developers combine their computing power to run the platform. Similar to Bitcoin, if one of those computers turns off, theoretically the platform should continue running.
  • What I just described above is called decentralization. Since BitClout cannot be traced back to a single company or creator (outside of the anonymous profile @diamondhands), it’s much harder to influence or attack as a platform.
  • Blockchains replace networks with markets (credit: @naval). Because everyone has their own social token (think of it like stock), people can bet on other people or raise their reputation in society to increase the value of their own token. Currently there is no financial gain whether your tweet gets 1 like or 1,000,000 likes. On BitClout, the value of your token—and presumably your net worth—goes up if you go viral.
Is BitClout the real deal?
Reactions are mixed.
Proponents say that decentralized media is the future. “Why does Facebook, Twitter, and Instagram make all the money and we [the users] do all the work?” asks Shaan from The Hustle. Whereas most creators extract only social value from today’s platforms, crypto-networks like BitClout generate financial value for creators.
Whether or not that financial value is actually being captured by the creator remains to be seen. To generate activity on the platform, BitClout created 15,000 new accounts using people’s Twitter profiles—without their consent. You also can’t withdraw your money if you buy $BTCLT, the BitClout token.
I decided to create an account on BitClout to give it a try. It required me to deposit 0.001 bitcoin (approximately $56 USD) in exchange for $BTCLT. After about 10 minutes of waiting for the transaction to go through and waiting for my profile updates to load, I was finally set up and made my first post:
As you can tell by my BitClout worth, I'm kind of a big deal.
As you can tell by my BitClout worth, I'm kind of a big deal.
Time will tell whether decentralized media overtakes traditional media.
In the meantime, you can find me on Twitter.
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Phil Hendricks
Phil Hendricks @PhilLHendricks

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