BitClout Draws Investors to a New Type of Social Media Monetization BitClout Draws Investors to a New Type of Social Media Monetization Photo: Pixabay

The nascent tech company barters influence, luring influence market brands such as HighKey.

BitClout launched in March, not as an alternative to current social media options, but to upend the social media network landscape. Its novel approach leverages cryptocurrency and clout to monetize that clout for both the influencer and followers. The concept has lured investors who see promise in the potential for financial growth due to wider adoption of cryptocurrency, as well as intrigue in a future of decentralized social media.

Cryptocurrency, once for the daring and well-versed in blockchain technology usage, is now held in the investment portfolios of laypersons. Even household names such as PayPal, Robinhood, and USAA facilitate cryptocurrency investment. Cryptocurrency’s appeal stems from the applications of the blockchain technology on which it is based. Blockchain eliminates the entity acting as middleman, such as a bank or brokerage. It allows individuals or groups to exchange digital assets, such as Bitcoin, whose value is authenticated. According to an article published in the journal Blockchain: Research and Applications in February, blockchain applications extend far beyond the simple financial investments done on a mobile app or those nefarious transactions heard of on the dark web. Energy companies, including renewable energy startups, are exploiting the tech, too. Blockchain can improve market access for owners of smaller assets, provide a decentralized platform for power generation and sharing, enhance finance for battery storage, and more in the energy sector.

It became inevitable that cryptocurrency would emerge as a form of social capital on a network used by some of the biggest online celebrities. Enter BitClout, whose early adopters include Reddit founder Alexis Ohanian, financial guru Grant Cardone, and HighKey founder Luke Lintz , whose HighKey businesses include a branding agency and influencer management company. Well-known venture capitalist firms Coinbase Ventures, Social Capital,  and Sequoia Capital have also invested in BitClout, which is worth $1 billion, according to NY Magazine.

Lintz, a serial entrepreneur who owns several multi-million dollar businesses, was immediately enamored when he first heard of BitClout and its mission. As someone who runs a branding agency and social media growth business, Lintz finds it especially attractive how BitClout’s open-source platform creates a decentralized social network.

“At any point in time, Instagram has the full right to censor, shadow ban, or fully disable your account,” Lintz says. “This is where the decentralized component of BitClout comes into play. Where every creator on the platform has ownership of their own ‘creator coin,’ and any money directly invested into themselves is not only retained but helps build their brand and attract other investors.”

BitClout’s cryptocurrency is eponymously named BitClout. The cryptocurrency can be used to buy coins that have a U.S. dollar value and can only be initially purchased with Bitcoin. As a decentralized platform, BitClout coins, as well as the content and followers acquired on the BitClout network, can move anywhere the user likes.

We fully believe that decentralized social media is the future,” says Lintz, who runs HighKey Clout, the influencer management company. “BitClout will be a place where entrepreneurs and businesses who heavily believe in investing in themselves will come and become top creators, because the investment in their brand will directly correlate with their notoriety and clout on the platform.”

Some critics of BitClout point to the network’s sourcing of profiles as problematic. BitClout is pre-populated with the profiles of Twitter’s 15,000 most popular influencers, none of whom agreed to have their profiles scraped. According to BitClout, however, these influencers can activate their profiles and take authority over them at any point. And when they do so, they can earn from the value of their creator coins, as BitClout refers to them, by buying into their own brand.

An individual’s clout already has a history of being assessed to determine that individual’s value—especially their public relations value. The Three R’s of relevance, reach, and resonance are used in a variety of situations, including in film and TV casting. Marketing a new film is much easier and more affordable when the project features an actor with a social media following of half a million fans. With BitClout, the premise is that the reputation-based value of its custom currency can be shared, like shares in a stock.

This gives followers or fans of influencers on social media a more active role. For followers, whose data is often monetized by social media companies in the form of targeted advertising and other strategies, they now can reap rewards with their investment into the celebrities they follow by purchasing their own creator coins. This symbiotic relationship fosters wealth when influencers succeed in real life, according to BitClout. Or drops their value when influencers fumble, for example with insensitive racially charged comments that would presumably lead to a sell off.

While the concept is alluring to early investors, there are still kinks and questions unanswered about the nascent platform. The most glaring question is how to extract value from creator coins to convert into cash. For now, investors eager to get in on a novel approach to social media are willing to grow with the platform and look ahead.

“We still have our speculations and doubts with BitClout, as any person would getting into a platform this early, but the concept is perfectly aligned with our goals, where we had to jump on the opportunity and go all in,” Lintz says. “We are 100% certain that the concept of BitClout is the future.”