{"id":20895,"date":"2021-04-03T23:39:40","date_gmt":"2021-04-03T18:09:40","guid":{"rendered":"https:\/\/valeurbit.com\/blog\/?p=20895"},"modified":"2021-04-03T23:39:42","modified_gmt":"2021-04-03T18:09:42","slug":"scam-or-promising-project-how-bitclout-works-a-social-network-for-crypto-investors","status":"publish","type":"post","link":"https:\/\/valeurbit.com\/blog\/scam-or-promising-project-how-bitclout-works-a-social-network-for-crypto-investors\/","title":{"rendered":"Scam or promising project? How BitClout works &#8211; a social network for crypto investors"},"content":{"rendered":"\n<p>In the wake of the popularity of cryptocurrencies and NFT, another project appeared &#8211; BitClout.&nbsp;It is similar to a social network where users can purchase tokens linked to celebrities and generate income from their growing popularity.<\/p>\n\n\n\n<p>In just a week, BitClout raised $ 160 million and attracted the interest of prominent investors and cultural figures.&nbsp;But crypto security experts are already pointing out flaws in the project and signs of a fraudulent scheme.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Risk assessment<\/h2>\n\n\n\n<p>Jack Dorsey&#8217;s first tweet NFT stakes recently hit $ 2.5 million. These prices have sparked a trend towards converting anything into tokens.&nbsp;BitClout uploaded 15,000 profiles of the most popular Twitter users, and then linked thousands of tokens to each.&nbsp;Their price depends on the popularity of the profile.&nbsp;In other words, investing in tokens is like investing in the social status of a celebrity.\u2002<\/p>\n\n\n\n<p>At the same time, an influencer who publishes a tweet about BitClout will be able to claim part of the tokens associated with his personality.&nbsp;In theory, Elon Musk could get $ 2.96 million worth of BitClout tokens. Lesser-known celebrities will receive several thousand dollars.<\/p>\n\n\n\n<p>BitClout looks like an attempt to assimilate the Twitter feed and works in the same way as Steemit &#8211; the crypto version of Reddit or Voice.com &#8211; the blockchain counterpart of Facebook.<\/p>\n\n\n\n<p>The first step for those looking to enter the BitClout market is to buy BitClout tokens with Bitcoin.&nbsp;And this is already a serious reason to be wary: the block explorer shows that funds pass through only one address before entering the crypto universe.<\/p>\n\n\n\n<p>Rich Sanders, head of blockchain research firm CipherBlade, confirms that the site is sending funds to three exchanges:<\/p>\n\n\n\n<ul><li>88.41% &#8211; Amber Group,<\/li><li>11.17% &#8211; Kraken,<\/li><li>0.42% &#8211; Coinbase.<\/li><\/ul>\n\n\n\n<p>After that, the funds are transferred to other exchanges and wallets.<\/p>\n\n\n\n<p>The only non-exchange address that BitClout paid directly to received money from the Hydra darknet market.\u00a0Sanders believes that the creators of the project paid some dubious user.<\/p>\n\n\n\n<p>There are indications that the address belongs to a suspect in Nigeria, whom BitClout may have paid to create Twitter bots to promote the project.<\/p>\n\n\n\n<p>\u201cThe more users are invited to the social network, the more income,\u201d says Sanders.<\/p>\n\n\n\n<p>Online media outlet Decrypt contacted BitClout&#8217;s Twitter account, but received no comment.<\/p>\n\n\n\n<p>Meanwhile, London-based Coinfirm, which specializes in tracking suspicious crypto transactions, has also voiced suspicions about BitClout.&nbsp;In an interview with Decrypt, Coinfirm management described the site as Bitconnect 2.0.&nbsp;During the 2017 crypto boom, tokens on this platform rose to $ 400.&nbsp;Now they cost nothing.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Where&#8217;s the money?<\/h2>\n\n\n\n<p>Presumably, BitClout tokens can be bought with bitcoins, but BitClout cannot be withdrawn from the network.&nbsp;They can only be sent to other users or used to create author coins.&nbsp;However, you cannot exchange them for cash or bitcoins.<\/p>\n\n\n\n<p>It is impossible to update your profile photo, post a status or write to a chat bot without purchasing coins in advance.&nbsp;And when Decrypt transferred about $ 20 in bitcoins to the platform, the site did not allow the money to be used to buy BitClout tokens.&nbsp;Updated: BitClout now allows you to create a profile and get some tokens by sharing your phone number.<\/p>\n\n\n\n<p>There is also no way to check which transactions will be going through the blockchain.&nbsp;There is no obvious way to create a node or mine coins yet.&nbsp;The anonymous team did not publish the project code.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Shadow army<\/h2>\n\n\n\n<p>Despite the support of influencers, only a few accounts have been verified.&nbsp;However, even this does not guarantee that the influencer associates his name with the project.&nbsp;Neither Chamat Palihapitiya nor Ashton Kutcher, two of the most influential &#8220;verified&#8221; accounts, posted tweets about the project, although this is a prerequisite for account verification.<\/p>\n\n\n\n<p>The two largest Twitter accounts, r \/ WallStreetBets, are also marked verified.&nbsp;However, they say they have nothing to do with BitClout.<\/p>\n\n\n\n<p>The majority of BitClout&#8217;s Twitter fans, each with a small following, do little to nothing but promote the project.<\/p>\n\n\n\n<p>For example, @Ssh_Just_Buy, created in February, pumped altcoins from time to time, and from March 12 switched to BitClout.&nbsp;Two days later, the account posted a link to its own website, which explained in detail the nuances of the project.<\/p>\n\n\n\n<p>Moreover, the BitClout network still operates autonomously.&nbsp;Diamondhands, who appears to be running the project, attributes this to the fact that nodes are constantly rebooting and missing transactions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">First investors<\/h2>\n\n\n\n<p>One of the first investors was Chris McKenn, a Silicon Valley investor and general partner of Race Capital, who learned about the project from friends.&nbsp;He says that he is not associated with the project or its founders, but participated in an early version that was launched last week.<\/p>\n\n\n\n<p>Now the capitalization of his tokens on the platform has reached $ 55,400.&nbsp;McKenn says he invested too much in the project, but notes that the anonymous team managed to create a well-designed website.<\/p>\n\n\n\n<p>One of his friends, Silicon Valley investor Andy Artz, invested $ 18,000 in BitClout.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cAs soon as you kind of get involved and start investing in people at the start, and they get verified, it&#8217;s fun.&nbsp;I want to take advantage of this, \u201dsays McKenn.<\/p><\/blockquote>\n\n\n\n<p>He received nearly $ 34,000 worth of non-refundable tokens on BitClout after he posted a tweet about the project to verify his account.<\/p>\n\n\n\n<p>Michael Arrington, a well-known Silicon Valley investor and media figure, received the equivalent of $ 290,000 in authors&#8217; coins.&nbsp;He did not respond to Decrypt&#8217;s request for comment.<\/p>\n\n\n\n<p>McKenn believes there is now a demand for social crypto projects like Rally or Roll, and BitClout is taking advantage of it.&nbsp;Over the weekend, Roll was attacked by hackers who crashed token prices pegged to influencers from the platform.<\/p>\n\n\n\n<p>McKenn is well aware of the risks, especially the inability to withdraw money from the platform and the impostors&#8217; ability to profit from fake accounts.&nbsp;This is far from the first of McKenna&#8217;s investments &#8211; he also invested in crypto exchanges FTX and Binance, which had problems at the start, and then began to flourish.<\/p>\n\n\n\n<p>But for CipherBlade&#8217;s Sanders, it doesn&#8217;t look very good and resembles one of those ICOs that investors spent billions of dollars on in 2017 and 2018.&nbsp;\u201cThis is a complete mess,\u201d he concludes.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the wake of the popularity of cryptocurrencies and NFT, another project appeared &#8211; BitClout.&nbsp;It is similar to a social network where users can purchase tokens linked to celebrities and generate income from their growing popularity. In just a week, BitClout raised $ 160 million and attracted the interest of prominent investors and cultural figures.&nbsp;But&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v16.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Scam or promising project? 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