BitClout White Paper
Even though BitClout has yet to publish an official white paper, the website posted a 7-page “one-pager”.
In this report, BitClout explains exactly what is BitClout, what are creator coins, how the bonding curve works, and lot of other essential information about BitClout.
What Is BitClout?
BitClout is “a new type of social network that lets you speculate on people and posts with real money, and it’s built from the ground up as its own custom blockchain.” Just like Bitcoin, BitClout can support complex social network data like posts, follows, speculation features, profiles, and much more. BitClout says that they are a fully open-source project and there is actually no company behind it.
What Are Creator Coins?
With BitClout, every single profile on the platform gets its own coin that anybody can buy and sell. These are called “Creator Coins.” The price of the coin goes up when people buy the coin and goes down in value when people sell.
(TIP: We recommend buying your own coin before telling anyone else to buy yours)
In addition to each profile getting its own creator coin, you can also buy someone else’s coin by navigating to their profile and hitting “buy.” BitClout states that “profiles for the top 15,000 influencers from Twitter have been pre-loaded into the platform, meaning that you can buy and sell their coins even though they’re not on the platform yet. These reserved profiles have a “clock” icon next to their names, indicating the owner of the profile has not yet joined.”
How Can Someone Claim Their Reserved BitClout Profile?
If the owner of a reserved profile wants to claim their profile, they can hit a button to Tweet their BitClout public key. “When they do this, they gain full access to the account, as well as a percentage of the creator coins associated with their profile (see Founder Rewards). Only the owner of the Twitter account associated with a reserved profile can claim it.”
What Are Creator Coins For?
BitClout says that “Creator coins are a new type of asset class that is tied to the reputation of an individual, rather than to a company or commodity. They are truly the first tool we have as a society to trade “social clout” as an asset. If people understand this, then the value of someone’s coin should be correlated to that person’s standing in society. For example, if Elon Musk succeeds in landing the first person on Mars, his coin price should theoretically go up. And if, in contrast, he makes a racial slur during a press conference, his coin price should theoretically go down. Thus, people who believe in someone’s potential can buy their coin and succeed with them financially when that person realizes their potential. And traders can make money buying and selling the ups and downs.”
How Many Creator Coins Are There on BitClout per Profile?
Creator coins are naturally scarce with 100 to 1,500 coins in existence for each profile. Because as more people buy a profile’s creator coin, the price of the coin automatically goes up at a faster and faster rate.
“The formula or “curve” for determining the price of a creator’s coin is as follows. Note that creator coins are normally bought and sold with the BitClout cryptocurrency, but we provide a dollar version of the formula for easy calculating:
Price in BitClout = .003 * creator_coins_in_circulation^2
Price in USD = .003 * creator_coins_in_circulation^2 * bitclout_price_in_usd”
What Are Founder Rewards?
Founder Rewards allow creators to keep a certain percentage of the coins that are created and purchased. This is called the “Founder Reward.” For example, if someone sets their founder reward to 10% and then someone buys 100 BitClout of their coin, “then 10 BitClout would be used to buy the creator’s coin, and those coins would go to the creator’s wallet rather than the purchaser’s. Importantly, the founder reward is only paid on “net buys” of their coin. So, if someone were to buy 100 BitClout of the coin, sell, and then buy again, the creator would only have 10 BitClout of their own coin at the end. Thus the creator can own 10% of the total supply simply by setting their founder reward to 10% while being aligned with increasing the net buys of their coin indefinitely.”
Read the full one-pager here: BitClout One Pager