By now, you’ve probably heard the buzz about BitClout. If not, you will very soon. BitClout launched a month ago, and has reached several amazing milestones:

• Funding: $155+ million investment from the top investors in Silicon Valley and $160M in investments for its users.
• Users: 185,000+users
• Developers: 50+ developers creating apps on top of BitClout
• Celebrities: Many celebrities on the platform (Bella Thorne, Ashton Kutcher, Steve Aoki, Scott Disick, James Charles, Bryce Hall, Tana Mongeau, Pamela Anderson, Paul Pogba, Jake Paul, and Diplo) or talking about the platform (Snoop Dogg and Logan Paul).

At its core, BitClout is three things:

• Social network (very similar to Twitter)
• Decentralized protocol for developers to build on top of
• Stock market where you can invest in people and projects

But, on the surface, BitClout looks like just another thing…

• Yet another crypto project
• Yet another social network
• Yet a new thing to invest in
• Yet another thing to pay attention to
• Yet another distraction

After reading this article, you’ll clearly see that it’s not any of these.

It’s worth your time to understand it immediately without dismissing it out of hand based on a few headlines or an initial judgement. We’re very likely witnessing the birth of a whole new era of the web. A “wait and see” approach is short-sighted.

Even if BitClout.com fails to live up to its promise, BitClout, the protocol, will likely endure and have a profound impact on the world that is hard to fathom right now. Being early now means you profit as a creator and investor in a few ways:

• Followers. Users are actively looking for people to invest in and follow 10x more than they will in the future.
• Investing. Many of the world’s top influencers have no investors yet. If the platform does gain a wide option, there is an opportunity to get in at the very bottom.
• Content and Apps. There is an incredible, untapped opportunity to build content, research, apps, and companies on top of BitClout.
• Handles. You can claim your personal username, company username, and keyword usernames related to your industry before someone else does.

It took me hearing about BitClout ten times before it clicked with me. Then, it took dozens of hours of using it to understand its potential. My hope for this article is to condense everything I’ve experienced into one article. I want it to be the thing that helps you understand BitClout on a much deeper level and answer the questions below:

• What is BitClout?
• Who is BitClout for?
• What are the potential benefits of BitClout?
• What could BitClout turn into?
• Is BitClout legit?
• What are the risks of BitClout?
• How do I get started with BitClout?

My secondary goal is to share my authentic and balanced BitClout review — to share my excitement while also sharing the downsides and risks of the platform.

With that said, let’s jump in.

To really understand BitClout, you first need to understand what I call the three legs of the BitClout stool…

• Web 3.0
• Financialization of everything
• Social tokens

Let’s start with Web 3.0.

BitClout Is The First Mainstream Web 3.0 Application

Web 3.0 fundamentally reinvents the internet we know today.

As I write this, entrepreneurs are raising capital and developing web 3.0 versions of every web 2.0 platform. Below are a few of the ones that I’m aware of…

Web 3.0 applications have three hallmarks:

• Ownership
• Transparency
• Decentralization

Ownership: In Web 2.0, platforms like Facebook and Twitter got paid for the free work of users creating value (i.e., sharing their creative works) on the platform (i.e., giving their attention, creating content, commenting, liking, voting, and curating the best content by sharing it with their network).

In Web 3.0, creators and users get ownership for the value they create. Therefore, as the platform and their account grows, they make money.

In addition, in the Web 2.0 era, several platforms owned all of your content. In the Web 3.0 era, users own their content.

Transparency: In Web 2.0, much of the aggregate data of users is kept private and used by the platform. In Web 3.0, everything is public on the blockchain. This means that you can see what others are doing. With BitClout, below are some of the things that are public:

• Everyone’s Investments. Who every person invested in, how much, and how much it is worth.
• Everyone’s Actions. All of the posts and data on likes, retweets are public.
• Everyone’s Investors. For every creator, you can see who invested, how much, and how much that stake is worth.
• And much more…

Decentralization: With Web 2.0, users are at risk of being deplatformed / moderated and developers are at risk of having their apps banned, throttled, or their revenue skimmed. With Web 3.0, users and developers don’t have to worry about these in the same way.

According to the official BitClout WhitePaper everyone can create copies of and access all of the BitClout data forever. This is a big deal.

As a result, developers can build new apps on top of the BitClout protocol, not just BitClout.com. This means they could create versions of BitClout just designed for specific types of content (i.e., longform articles, video, sound). Currently, BitClout’s functionality is designed to copy Twitter. Below a visual that shows the relationship between the protocol and the apps that can be built on top of it.

Each of these apps built on top of the BitClout protocol can:

1. Have their own moderation policies.
2. Automatically sign users in the way that Facebook and Apple have one-click sign up and sign in buttons.
3. Access to all of the data the user generates as they use the various sites built on top of the BitClout protocol.
4. Create their own feeds. For example, ESPN could curate a sports feed. Politico could curate a political feed.

In other words, one of the reasons the open web succeeded is that developers could build applications and raise funding knowing that they’d have the ability to control the destiny of their applications. With the advent of centralized app stores (Apple, Facebook, Twitter), we learned that companies who own app stores often end up competing with the best apps, changing policies on what data the apps have access to, or taking a large percentage of all sales. With the BitClout protocol, developers control their future again.

Bottom line: BitClout isn’t just a new social media app; it’s a new operating system for social media apps.

In addition, this form of decentralization is also profound for the user. When you start using BitClout.com, you aren’t just attracting followers and investors for BitClout.com. You’re building a portable profile you own that will be used on all BitClout applications that are developed in the future. Furthermore, if a user is deplatformed from one of the BitClout apps, they’ll still own their identity (followers, investors, posts, content) and be able use it on other BitClout sites without restarting from zero.

Now that you understand Web 3.0 better, you next need to understand the financialization of everything. Without understanding this, BitClout will still be confusing.

BitClout And The Financialization Of Everything

Another way to see BitClout is as a continuation of the trend toward financialization of all assets.

We’ve grown up in an era where a narrow set of things are looked at as financial assets. For example, we buy, sell, and invest in things like…

• Houses
• Companies
• Commodities

We’re used to these having value because they are physically tangible. There is something backing them.

But, it’s worth remembering that the first commercial corporation was only started in the 1600s. At one point, the idea of having a company with investors was counterintuitive.

We’re now entering an era where we can bet on and trade on the intangibles as well: ideas, potential, reputation, predictions, etc.

BitClout financializes a person or project’s reputation and perceived potential. In other words, it turns these intangible assets into something that anyone can buy and sell.

Things like reputation have always had value. With BitClout the intangible has immediate financial value.

This shift toward the financialization of people may sound insignificant or even harmful on first glance. For example, when I first saw dollar signs next to other people’s names, it felt shallow to associate someone with a dollar value. I wondered how this shift would intersect with cancel culture, and I thought to myself, “I wouldn’t want my 12-year-old daughter on this platform.” But, the more I’ve learned about the platform, the more I’ve also seen the emergent possibilities. For example:

• Everybody is an owner. In our modern world, a very small percentage of people own assets. With BitClout, all customers can easily own their favorite products, employees can own the companies they work for, friends can own each other, and everybody can own themselves. This ownership creates a new source of wealth and also changes how people act as customers, fans, friends, and employees.
• Potential is investable. Let’s say you come across someone who is extremely ambitious and talented. In the past, you could only invest in them if they had a company. Now, you can invest in them directly and immediately. Also, it creates the incentives for people incubators to be created that offer support and capital for free in return for ownership.
• Creators can monetize more easily. In Web 2.0, creators in many fields work for free, earn way less than the value they create in the world, and get taken advantage of with onerous contracts. For example, many musicians have to tour on the road, because they only earn a small percentage of each Spotify stream. Many creators ask their fans for ‘donations’ even though their fans are receiving lots of value. By earning from their reputation, creators unlock a whole new source of revenue that allows them to focus on their art.

Now that you understand web 3.0 and the financialization of everything, let’s dive into the final leg of the stool…

BitClout Is The First Mainstream Crypto Social Token Platform

Over the last twelve years, the public has become aware of fungible tokens. These are tokens like Bitcoin and Ethereum. Fungible tokens are interchangeable with each other. In other words, one bitcoin is equal to another Bitcoin just like one dollar is equal to every other dollar. Currently, most people use fungible tokens as currencies, assets, and for financial services like investing and loans.

Non-fungible tokens (NFTs) are not interchangeable. Each NFT represents something unique and scarce. In the last few months, we’ve seen this space blow up. Particularly, we’ve seen particular types of NFTs blow up:

• Collectibles (ie — NBA TopShots)
• Creative Work (ie, art, articles, songs, podcasts, etc)

The new type of NFT that is just beginning its growth curve are social tokens. Social tokens are NFTs for people, projects, and companies. You can think of a social token as any type of user you might see on Twitter.

Currently, there are three main social token platforms…

• Rally
• Roll
• BitClout

The overall map of where BitClout fits into the crypto ecosystem looks like this:

BitClout was launched in March, but it’s the fastest growing and largest social token platform. What makes BitClout different than Rally and Roll is primarily two things:

First, BitClout is layered on a Twitter-like social network.

BitClout functions just like Twitter. It has a newsfeed. There is liking, threads, and reclouting (equivalent of retweeting). What makes it new though is that each account’s social token is integrated with their profile. Every time a user posts, the value of their coin is placed next to their name in the newsfeed.

Below is a screenshot of my current newsfeed so you can see for yourself:

Second, BitClout used controversial, but extremely effective growth hacks to attract influencers.

BitClout scraped the information of the top 15,000 Twitter accounts, duplicated those accounts on BitClout and put a percentage of the money it had raised into the coins of all of those accounts. That way, when those 15,000 accounts join, they automatically get at least thousands of dollars. Users can trade those tokens before the account is claimed by its owner. So when some creators join, they will collect millions of dollars and they will have direct access to thousands of their true fans. This gives a strong incentive for the most influential people on Twitter to join BitClout. Furthermore, in order to claim their account, the influential creators must craft a Tweet with #bitclout and their public key. This creates another way for new users to learn about BitClout.

Several users on the Internet have claimed that this is outright fraud and that BitClout stole people’s identities. Several celebrities are suing BitClout. Others are claiming their token.

The other perspective is that many of the mainstream platforms on the Internet were started in similar ways. Google has scraped billions of pages, most of them without explicit consent being given. Yelp created profiles for businesses in its app without consent, collected reviews on those businesses, and created incentives for businesses to claim their profiles. Facebook launched by scraping the headshot of all Harvard students in order to create a directory.

Third, BitClout built a protocol that developers can build on top of.

I explained the significance of the protocols earlier.

Now that you understand the three leg stools that help you understand BitClout:

• Web 3.0
• Financialization
• Social Tokens

Let’s answer what is probably your biggest question right now:

How Does BitClout.com Work?

With BitClout, you get all of the things you’d expect from a social network:

1. Profile where you can post text and images like Twitter
2. Ability to like, retweet, and comment on any post
3. Newsfeed where you can see the posts of people you follow

But the key difference is that you also are able to buy and sell into any of the other accounts on the platform (including your own) if you want to. Simply go to their profile and click the blue ‘Buy’ button in the upper right. For example, here’s what the top of my profile looks like currently:

In addition to the buy button, you also get info on:

• Coin Price:  This is how much each coin is worth. My coin is worth $1,337.70. As more people invest in that account, the coin price rises, and your initial investment is worth more.
• Coins In Circulation: Each account starts off with zero coins. As more people invest, the supply of coins increases. As more is invested, every additional dollar leads to the creation of fewer and fewer coins.
• USD Locked: This is how many US dollars other people have been invested.
• Market Cap: The market cap is derived by multiplying the # of coins in circulation times the individual coin price.

You also have a wallet where you can see all of the investments you’ve made and the value of your total portfolio.

As a user, you can…

• Create your own content
• Engage with other people’s content
• Buy and sell people’s coins (including your own)

Now that you have a better understanding of BitClout’s features, here’s how I’m approaching it…

How I’m Using BitClout

Currently, I’m following the Hockey Stick Rule, which I talk about in Learning Speed: What Jeff Bezos, Elon Musk, And Bill Gates Know That Most People Don’t. This rule is simple:

This rule was inspired by being late to several opportunities and wishing I could go back in time and front load my research. For example, I first heard about Bitcoin in 2013. I started hearing about it from many of the smartest people in my network in 2017. I didn’t invest until 2020. In retrospect, I wish I hadn’t written it off without taking the time to understand it. I’ve now spent over 100 hours understanding the world of crypto, and if I had spent the same amount of time seven years ago, the difference would’ve been 1,000x.

This past year I reflected about what I could’ve done differently that would’ve helped me explore Bitcoin when I first heard about without getting overwhelmed with every new opportunity out there. The Hockey Stick Rule was the answer.

The Hockey Stick Rule has several benefits:

• Helps you focus on new opportunities with the greatest chance of success and not get overwhelmed by all of the shiny objects.
• Allows you explore new things without getting sucked into them.
• Helps you avoid missing out on big opportunities that you would’ve previously dismissed out-of-hand.

With the Hockey Stick Rule, rather than product adoption being one decision, it is multiple decisions…

Here’s how I spent my first 10 hours. I recommend you do something similar.

There are three paths to take on the platform at the moment:

• Creator
• Maker
• Investor

Each path has very different actions and payoffs.

I’ve chosen to be both a creator, maker, and an investor.

First, I decided to invest $20,000 into the platform. I chose an amount I was comfortable losing 100%. Even though BitClout is super exciting, it still has a chance of going to zero.

When I bought into the system existing BitClout users weren’t able to easily sell their existing BitClout tokens and turn them into US dollars. When new tokens are created, it typically takes many months or years before you can buy them on platforms like Gemini and Coinbase. Some people who had significant gains on BitClout wanted to sell. And because there wasn’t a big market of buyers at the time, coins were being sold at a 45% discount. Thus, my $20,000 turned into $37,000 in BitClout. If you’re interested in buying BitClout from existing BitClout owners, check out Bitswap. I’ve now used it three times to buy tokens and spoken with the founder. It has worked flawlessly.

The conventional and safest path to buying BitClout is to:

• Buy Bitcoin
• Send your Bitcoin to BitClout (every BitClout user gets a unique Bitcoin address)
• Convert your BitCoin into BitClout

Once I was on BitClout, the first thing I did, and the first thing I recommend you do is buy your own coin. The earliest investors get the best deal. I spent $5,000 dollars investing in my own coin. So far, a total of $21,000 has been invested into my coin by myself and others.

The next thing I did is start looking for investment deals. Here is some of the simple logic behind some of the bets I’ve made:

• Celebrities who haven’t had anybody invest in them
• Individuals investing heavily into the platform and creating BitClout applications
• Large companies and sports teams with devoted fans

The good news is that we are extremely early in the platform and most of the 15,000 accounts reserved by BitClout haven’t had anybody invest in them.

So far, I’ve made dozens of investments. And, to the point of transparency that is baked into the platform, you can see all of my current investments in real-time here. Below is a screenshot of what a wallet looks like:

As a creator, I’ve created several posts, but more importantly, I decided to co-create a new account called BitCloutU with my good friend and brilliant designer, Camille Ulmer. The goal is to create helpful explainers of BitClout on the web so people understand the value of BitClout, get through the complicated registration process, avoid scams, get followers, and build the value of their coins.

First, we invested $1,000 into our creator coin. Next, to announce the idea, we made one post:

Without doing anything else, about $10,000 was invested into the project by other users… only one of whom I actually know. So, our initial investment of $1,000 has increased significantly.

Next, joining the platform does not come without risks, and it’s worth knowing about those upfront…

The Big Risks To Consider

Below are some of the largest risks to consider for your time, money, and sanity:

• BitClout could get hacked. Just last month, over $5 million was stolen from another social token platform. A hack could take down the site or data could be compromised. BitClout has claimed that their site has been fully audited by multiple third parties, but who those parties are has not been publicly shared.
• The founders of the company (DiamondHands and Maebeam) could theoretically run away with all of the money. The founders are pseudonymous, which means that theoretically, no one knows who they are. Although, there are educated guesses floating around. The good news is that they are both very active in the community, and they have every financial incentive to keep developing the site.
• Competitors could overthrow it. One of their competitors (Roll or Rally) could outcompete BitClout or there could be a new startup that competes. The good news is that BitClout is more than BitClout.com. Even if BitClout.com fails, other companies are already creating other apps on top of the protocol. As I write this, the Rally token currently has a market cap of $105M and has raised $22 million in financing. Their code is also open-source and decentralized so it too could be built on top of by others who integrate it into their platforms and products. In addition, it is easier for a novice to buy someone’s Rally token (only a credit card is needed) than it is to buy someone’s BitClout (requires owning BitCoin).
• Scams could cause early users to stop using the platform. For example, some people are registering fake accounts for famous people and creating fake content on their behalf in order to get investors, sell the coin, and make money. To be sure a celebrity or influencer is real, I recommend making sure their account is verified (blue checkmark) or reserved (gray clock).
• Backlash could grow faster than adoption. It is hard to predict what the future of the platform will turn into just like it is hard to predict what the Internet would turn into in 1990. There will surely be good things and bad things. Already, if you search BitClout on Twitter you will see a lot of people questioning it. The platform’s growth could be hampered if the negative comments vastly outweigh the positive comments.
• Early adopters could get bored. After an initial excitement wears off, users could get bored, stop posting or post much less, and/or cash out. There are signs that social activity is decreasing at the moment.
• The market could end up being much smaller than people think. Today’s mainstream social media apps have hundreds of millions of users. Given BitClout is based on money, the market could top off at millions rather than hundreds of millions.
• The negative qualities of social media could be amplified. The past ten years have taught us that social media is incredibly addictive, can empower dangerous Internet mobs, and can be harmful to people’s self-identity. BitClout takes all of these qualities and multiplies them. Now, users will see their coin value increase and decrease daily along with the value of their investments in other creators. A surprisingly significant number of posts on the platform are jokes about how addictive it is.

I do think BitClout has a decent chance of succeeding, which is why I’m investing so much time, but I’m also mentally ready if it fails. I recommend you take a similar philosophy — do your due diligence on BitClout. If you do invest, only invest what you can afford to lose. Also, it’s important to know that you do not have to invest in anything in order to use BitClout.

This article was written with love and care using the blockbuster mental model.

Disclaimer: Given that BitClout isn’t just a social network and that it is a stock market for people, I just wanted to make it clear that I am not an investing expert. I’d recommend consulting a financial advisor to help you determine whether to invest and if so, how much. Given that BitClout is only a month old, like any startup, there is a chance it could collapse. So, if you do invest, I would recommend investing a small enough amount that you would feel comfortable completely losing. In this article, I just wanted to share my honest personal experience, so you could make your own decision.

If there’s a link to an Amazon book, it’s an affiliate link, which means I get a small amount of compensation when you buy the book. This compensation does not influence the specific books I recommend, as I only recommend books that I read and love.