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- BitClout has emerged, offering a way to become wealthy by investing in popular profiles
- Although the marketing strategy of the project is great but it uses the credentials of others to attract investments without permission
- Many considered the project as a scam, but the value of it is yet speculative
BitClout seems to be the next latest hyped-up bandwagon for the investors as per ValueTheMarket. Over the last few months, the retail investors have experienced a wild ride. Now in the space, has entered BitClout, which has gained social media craze. The latest project can be described as a mixture of Twitter, Robinhood, and Bitcoin. Not that big, but the decentralized social project has attracted small traders into its frenzy. Still, there are concerns about whether retail investors should be aware of such hypes.
How exactly does BitClout work?
To interact on the platform of BitClout, users will have to purchase its tokens with 0.001 BTC. Once the payment is completed, the users will be able to acquire a Creator Coin that is linked to a famous profile on the platform. When many users will purchase the coin of the same creator, the price of the coin will surge.
The price of the coin is designed to increase in value as compound interest works. The best example that BitCout’s price is being driven up exponentially is its value getting doubled with every million sold.
Following the project’s whitepaper, we have found that there is a similar calculation taking place to raise the price of the Creator Coins. Notably, how the prices are soaring according to the calculations is increasing FOMO among retail investors. And, many excited investors have already pledged their funds in the hope of getting rich.
BitClout’s marketing strategy seems shady
In the current scenario, the most famous creator on the platform is Elon Musk, the CEO of Tesla. And the surprising factor is he has not yet joined the platform. Indeed, his name only is currently having more than 13k followers, and the price of his coin has surged to $67,884. Musk has become somewhat a crypto legend, and there is a possibility that he can join the platform to claim his $67,000 pledged to his name.
According to BitClout, to claim the token, Musk will have to tweet his public key with #bitclout in the process. Hence, the marketing strategy of the platform is clear as Elon’s tweet can bring a whole lot of users to its platform.
Notably, the platform has begun scrapping the top $15k Twitter handle credentials, which helped the platform to kickstart. According to legal perspectives, the business seems shady. Where data scraping is only attracting skepticism, BitClout is attracting investments using such credentials, that too, without permission.
Is there a ponzy scam going on?
Following the scenario and strategy of the project, there are many standing on the negative side of the fence. There are many deemed that the project has a close resemblance to Bitconnect, and the tokens will remain worthless at the end. However, the prominent point of concern is that the project is taking BTC deposits, but no withdrawals are available yet.
So far, the project is having approximately more than $225 million worth of Bitcoins. According to ValueTheMarket, there are few early investors. Such investors include Sequoia Capital, Andreessen Horowitz, and others. And it seems like these few early investors have already purchased the tokens before the platform’s launch. Considering other scams, we have witnessed how early adopters left being rich, whereas thousands are left behind, falling into the trap.
Following the scenario, the project’s intrinsic value is yet highly speculative. Betting on popular profiles might be tempting, but if the users have no way to cash out, then the trade seems to do nothing. And the more significant concern is whether BitClout will be the social platform that we always need or will crash and become worthless.
