BitClout

BitClout, also known as DeSo (short for "Decentralized Social"), is an open source cryptocurrency project and social media platform. On the platform, users can buy and sell "creator coins", based on people's reputations.[1][2] Users can also post short-form writings and photos and award money to posts they particularly like by clicking a diamond icon.[3] They can also sell NFTs.

Not to be confused with Bitcloud.
"DeSo" redirects here. For other uses, see Deso (disambiguation).
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DeSo (Decentralized Social)
CodeDESO
Development
White paperbitcloutwhitepaper.com (archive)
Initial release2021
Code repositoryhttps://github.com/bitclout/core
Source modelOpen source
LicenseMIT license (github.com/bitclout/core/blob/main/LICENSE)
Websitebitclout.com
Ledger
Ledger start18 January 2021
Timestamping schemeProof of work
Circulating supply~10,800,000

BitClout's primary leader and founder is known pseudonymously as "diamondhands"[3] (slang for a person who holds an investment in a turbulent market), but his real name is Nader al-Naji.[4]

BitClout launched to the public in March 2021. It had 15,000 "reserved" accounts for celebrities on Twitter to prevent impersonation.[1][3] On 12 June 2021, the supply of BitClout was capped at ~10.8 million coins,[3][5][6] in what diamondhands called "the Deflation Bomb".[5] Sometime in or before July 2021, BitClout's open-source Rosetta API implementation became live.[7] In September 2021, BitClout rebranded as DeSo.[8]

History

Origins (2019 - March 2021)

In early 2019, Nader al-Naji became interested in "mixing investing and social media". He started creating a custom blockchain in May 2019, but didn't tell anyone else until November 2020.[9][10][11] However, in the fall of 2020, al-Naji had pitched BitClout's own investors under his real name and began posting job listings for a "new operation".[12]

Although BitClout was not originally intended to launch until mid-2021, its development was sped up after "zeitgeist about decentralized social media" and "this news about GameStop that ignited a trend towards investing being a more social thing" in January 2021.[9]

BitClout's first block was mined on 18 January 2021.[13] Its next block was mined on 1 March 2021;[14][15] mining sped up after that point.[16]

As BitClout (March - September 2021)

In early March 2021, about fifty investors received links to a password-protected website with the BitClout white paper.[3] They were encouraged to explore the site and send the same link to "two or three other 'trusted contacts'".[3] Within weeks, users were spending millions of dollars per day on the platform.[3] The platform's founders were "completely unprepared", having planned to have a "soft-launch", but decided to keep the platform up anyhow.[3]

On 24 March 2021, BitClout launched out of private beta.[1] Early investors include Sequoia Capital, Andreessen Horowitz, the venture capital firm Social Capital, Coinbase Ventures, Winklevoss Capital Management, Alexis Ohanian, TQ Ventures, Arrington Capital, Polychain, Pantera, Digital Currency Group (CoinDesk’s parent company), Huobi, and Variant.[1]

On 26 April 2021, diamondhands announced that the "BitClout Exchange Listing API" had gone live; as of that date, BitClout developers were working on integrating it with Coinbase's Rosetta standard to enable the cryptocurrency to be listed on Coinbase.[17] As of July 2021, BitClout's open-source Rosetta API implementation is live.[7]

On 12 June 2021, the supply of BitClout was capped at ~10.8 million coins[3][6] (consisting of the then-current supply of ~11M coins as well as the ~275k coins to be mined in the next 30 years[5]), in what diamondhands called the "Deflation Bomb" and "the most deflationary event in BitClout history".[5][6] From this point, coin value is determined by supply and demand.[3]

On 18 July 2021, BitClout added the ability for users to mint and purchase NFTs within the platform.[18]

As DeSo (September 2021 - present)

On 21 September 2021, BitClout rebranded as DeSo, short for "Decentralized Social".[8][9][19] As part of the rebrand, diamondhands confirmed his identity as Nader al-Naji.[4] The rebranded project again raised $200M in funding, which went to setting up the DeSo Foundation.[4]

On 4 October 2021, the DeSo Foundation announced the creation of the "Octane Fund", a $50M fund to fund developers working with the DeSo blockchain.[20]

On 1 December 2021, ZenGo X, the "research arm" of ZenGo, wrote that it discovered a "critical double spending vulnerability" in BitClout named "Griphook". The vulnerability was fixed.[21]

Overview

BitClout is a social media platform; its users can also post short-form writings and photos.[3] They can also award money to posts they particularly like by clicking a diamond icon (similarly to Twitch Bits).[3]

Top: graph of the BitClout creator coin price curve. Bottom: a tabulated version of the same.

The prices of each account will go up and down with the popularity of the celebrity behind it. For example, if someone says something negative on Twitter, the value of corresponding account may go down.[22] This price is computed automatically according to the formula .[23]

At launch time, BitClout scraped 15000 profiles of celebrities from Twitter to create "reserved" accounts in their name, allowing the platform to raise money off of their likeness without their knowledge or consent.[1][12][24][25] To claim a reserved account, the account holder will need to tweet about it (which also serves as a marketing strategy).[12] The platform's founder diamondhands states that this was done "to prevent handle squatting and user impersonation".[1]

As of April 2021, about 80 profiles have been claimed.[26] Notable people who have joined BitClout include:

BitClout uses proof of work, but is planning to use proof of stake.[23]

DeSo coins sent to be exchanged for Bitcoin are sent to a user known as "Gringotts Bank" (an apparent reference to the fictional bank in Harry Potter of the same name), which is apparently set up especially for this purpose. The account appears to refill itself whenever emptied.[21]

Controversies

The development team made concerted efforts to remain pseudonymous. The CEO goes by the name "diamondhands" on the platform.[22] However, as early as April 2021, it had been widely believed that diamondhands is the former Google software engineer Nader al-Naji.[12][3] In September 2021, Nader al-Naji interviewed with Fast Company under his real name, confirming that he is indeed diamondhands.[4]

During its initial launch, BitClout could not be independently mined and the source code was not published, leading to claims of decentralization being disputed. BitClout coins could only be bought with Bitcoin, but could not be sold on the platform;[29][30] users could only sell on sites like Discord servers or Twitter threads.[30] However, on 18 May 2021, diamondhands announced that 100% of the BitClout code went public,[31] and the code for BitClout.com became available on GitHub.[32]

Some people with reserved accounts have actively tried to distance themselves from the BitClout platform. For example, in March 2021, law firm Anderson Kill P.C. sent Nader al-Naji, the presumed leader of the BitClout platform, a cease-and-desist letter, demanding the removal of Brandon Curtis's account and alleging that BitClout violated sections 1798 and 3344 of the California Civil Code by using Curtis's name and likeness without his consent.[12][33][26] Curtis also tweeted, "Adopting Bitcoin's aesthetic to raise VC funding to carry out unethical and blatantly illegal schemes like BitClout: not cool".[33] (However, Curtis's coin, despite not being listed on the official website, can still be bought by users searching for the original username.[26]) Additionally, in April 2021, Lee Hsien Loong asked for his name and photograph to be removed from the site, stating that he has "nothing to do with the platform" and that "it is misleading and done without [his] permission".[34]

A single bitcoin wallet related to BitClout received more than $165M worth of deposits.[1]

References
  1. Matney, Lucas (23 March 2021). "Crypto social network BitClout arrives with a bevy of high-profile investors — and skeptics – TechCrunch". TechCrunch. Archived from the original on 23 March 2021. Retrieved 12 June 2021.
  2. Girling, William (14 April 2021). "BitClout creates the first 'social media stock market' | Financial Services (FinServ)". FinTech Magazine. Retrieved 12 June 2021.
  3. Lester, Caroline (9 June 2021). "The Dark, Democratizing Power of the Social-Media Stock Market". The New Yorker. Retrieved 12 June 2021.
  4. LaPorte, Nicole (21 September 2021). "BitClout founder 'Diamondhands' reveals himself and explains why social media as we know it is dead". Fast Company. Retrieved 5 October 2021.
  5. diamondhands (3 June 2021). "diamondhands on BitClout". bitclout.com. Archived from the original on 4 June 2021. Retrieved 18 June 2021.
  6. diamondhands (12 June 2021). "Welcome to BitClout". BitClout. Retrieved 4 July 2021.
  7. "Exchange Listing API - The BitClout Guide". docs.bitclout.com. Retrieved 12 July 2021.
  8. diamondhands (21 September 2021). "diamondhands on BitClout". bitclout.com. Retrieved 5 October 2021.
  9. Sequoia (28 September 2021). "Why BitClout's Diamondhands is HODLing to the Moon". Sequoia Capital Publication. Archived from the original on 28 August 2021. Retrieved 4 December 2021.
  10. "BitClout Creator, Pseudonymous No More, Announces DeSo Ambitions". Blockworks. 22 September 2021. Retrieved 4 December 2021.
  11. "Lessons from a crypto entrepreneur: A conversation with Nader Al-Naji of BitClout". TechCrunch. Retrieved 4 December 2021.
  12. Wieczner, Jen (12 April 2021). "The Mysterious Influencer Stock Market Worth $1 Billion". Intelligencer. Retrieved 22 April 2021.
  13. "Bitclout blockchain explorer | Cloutangel". explorer.cloutangel.com. Archived from the original on 4 December 2021. Retrieved 4 December 2021.
  14. "Bitclout blockchain explorer | Cloutangel". explorer.cloutangel.com. Retrieved 4 December 2021.
  15. "The DeSo Block Explorer". explorer.deso.org. Retrieved 4 December 2021.
  16. "Bitclout blockchain explorer | Cloutangel". explorer.cloutangel.com. Retrieved 4 December 2021.
  17. LvlUpGuy. "BitClout Exchange Listing API Goes Live". Retrieved 10 June 2021.
  18. "Welcome to BitClout". BitClout. Retrieved 19 August 2021.
  19. "Deso | The Decentralized Social Blockchain". www.deso.org. 2021. Archived from the original on 23 September 2021. Retrieved 5 October 2021.
  20. "Announcing The Octane Fund: $50 Million to Fuel the Decentralized Social Ecosystem". www.deso.org. 4 October 2021. Archived from the original on 5 October 2021. Retrieved 4 December 2021.
  21. "Griphook: Uncovering a Critical Vulnerability in Bitclout". ZenGo. 1 December 2021. Retrieved 4 December 2021.
  22. Wieczner, Jen (12 April 2021). "The Mysterious Influencer Stock Market Worth $1 Billion". Intelligencer. Retrieved 28 April 2021.
  23. "What is BitClout? - The BitClout Guide". Retrieved 23 July 2021.
  24. Mittal, Apoorva. "BitClout aims to be the 'influencer stock market'". The Economic Times. Retrieved 22 April 2021.
  25. MacColl, Margaux. "Top VCs are loving a new crypto market called BitClout which lets them collect, and make money on, influencers like Elon Musk and Brian Armstrong". Business Insider. Retrieved 22 April 2021.
  26. Hitt, Tarpley (12 April 2021). "The Shady Crypto Startup Selling 'Shares' in Celebs". The Daily Beast. Retrieved 23 July 2021.
  27. Roberto, Melissa (30 March 2021). "Pamela Anderson joins BitClout after ditching social media in possible attempt to free Julian Assange: sources". Fox News. Retrieved 30 June 2021.
  28. Mittal, Apoorva. "BitClout aims to be the 'influencer stock market'". The Economic Times. Retrieved 23 July 2021.
  29. Seward, Zack. "The fuss about BitClout". Axios. Retrieved 30 June 2021.
  30. Kay, Grace. "How to use BitClout to bet on the popularity of influencers like Elon Musk on the world's first crypto social network". Business Insider. Retrieved 28 April 2021.
  31. diamondhands (18 May 2021). "diamondhands on BitClout". BitClout. Retrieved 18 June 2021.
  32. "bitclout/core". GitHub. Retrieved 26 June 2021.
  33. "Controversial Crypto Project BitClout Faces Legal Charges Over Selling Social Tokens Without Users Consent". finance.yahoo.com. Retrieved 23 July 2021.
  34. Ang, Jolene (2 April 2021). "PM Lee asks for his name, photo to be removed from BitClout crypto platform that monetises Twitter profiles". The Straits Times. Retrieved 12 June 2021.
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