BitClout: The Good, The Bad, and The Unclear

All right, what's up, everybody? I'm here with Ethan, and we want to talk about BitClout. Everyone's talking about it already. We want to talk about it because, you know, we don't really care if it's a scam. We don't care. You can put your money where you want. It's a speculative bet. Everyone knows that. But as something that relates to money and also relates to reputation, right? People are putting their reputations on the line if they're on this platform in some way. How we're thinking about it, right? As we read through the one-pager, as we do some of our own research, what kind of, what ways are we thinking about this? What incentives are there long-term? And we're just here to chat about it, 'cause it's such an interesting kind of viral topic and platform right now. So I guess we have the one-pager up. You guys can't see it, but we're gonna walk through and comment on it. So Ethan, you wanna give us a start?

Yeah, sure. So I'll say one other thing too, which is that the reason this call came about is because Steph and I seem to have sort of a contrarian opinion on this thing right now. And we don't know why. It's kind of funny. We've been laughing about it back and forth. We're like, "What are we missing here?" Because everybody seems to be super bullish on this, but I keep reading through, like Steph mentioned, the one-pager or just looking at the numbers as well. And I don't get it. So quick caveat, like, neither one of us are blockchain experts, but our full-time job is to kind of like understand businesses and markets and people and stuff like that. So we're going to talk about this from that perspective, open to feedback. I want people to kind of come in and explain to me what I'm not getting about this, because so far this terrifies me. Like, this is like, this is like a let me off the rocket ship kind of thing. And we'll get into why, but that's a quick caveat.

I am not a blockchain expert. I have like alarms going off in my head when I— the more I read into this, but I also feel like maybe we're missing something. So let us know if we are, but let's jump in.

All right. So the first thing for anybody who hasn't heard of it, like, what is BitClout? I'm going to read the— I'm going to read a sentence or two out of the very beginning of the white paper that kind of explains it. But then I want to go a little bit deeper and pull back the curtain on why their explanation of what the platform is might be different from what the actual eventual outcome of the platform is. So there's a difference between what it's being marketed as and what it really is. So from the white paper, 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 on its own custom blockchain. Uh, so what does this basically mean? What it means is that Bitcloud's created a platform where people are almost like stocks. So somebody like Steph or me or Tim Ferriss or Chamath or anybody else you can think of can set up an account. They can basically make that thing public and allow people to buy and sell this digital coin that's based on their reputation. And Steph, I'm going to pause here for a second to see if there's anything else that you want to add to this. But there's a couple of reasons why I'm like, there's more to this than meets the eye to me. And I'm curious. I don't think this quite tells the whole story. So is there anything else you want to—

I think you said something important, which is it's kind of like a stock. So some people, I don't even think Bitclout is necessarily, in their white paper, I don't see anything that says, we are the stock market for people. I think they were very clear about that. But the natural association that people have is to be like, this is the stock market for people. And one thing that's really important there is it's not, right? So normally when you have a stock, you have actual ownership over something. And that ownership is very clear about what you get, right? So you get X type of voting rights, or you get dividends, or you also get the right to know what's happening within that company, right, through public reports. And that's not true with this. So even though there are certain mechanisms where it's like, yes, people have an asset that's based on a person, so it's kind of like a stock, it's not similar in that way that it functions. So that's really important to call out.

For sure. Yeah, that's a great point. And there's something else that grabbed my attention when I first read this. There's 3 things in this first paragraph. So I'm going to read the first paragraph from top to bottom. I think it's 2 or 3 sentences. And then I'm just going to call out a couple of things. So it says, BitClout is a new type of social network that lets you speculate on people and posts with real money. It's built from the ground up as its own custom blockchain. Its architecture is similar to Bitcoin, only it can support complex social network data like posts, profiles, follows, speculation features, and much more at a significantly higher throughput and scale. Last sentence, like Bitcoin, BitClout is a fully open-source project There's no company behind it. It's just coins and code. OK, so 3 things that jump out at me from this, which make me a little bit less enthusiastic, or I just find myself questioning. So first of all, it says you can speculate on people and posts, and that's really interesting. The speculating on people thing makes sense to me, because people can issue their coin, and you can basically bet on whether or not you think the value of that coin is going to go up. What's unclear is, what do they mean by speculating on posts? I don't know, and I'm curious to learn more about that if anybody has any insight there. But what's more important to me is this thing about the speculation features in general. Right now, I think a lot of the excitement around BitClout is related to the values of all these creators going up. Well, for anybody who doesn't know, the company basically scraped the top 15,000 Twitter accounts and automatically created profiles for them. So they basically automatically issued coins for the top 15,000 creators in the world out of the gate. The value of all those coins is going up right now. All right. And that's exciting, and I think it's drawing a lot of attention, and a lot of people who are kind of earlier making money What I think is a little bit unclear at this point is what they mean by these speculation features, because, uh, the platform is unfinished. So one thing that Steph mentioned early on, anybody who puts money in right now, there's no clear path to take money out. That's a feature that's probably going to come. Um, what I find myself wondering is like, what other features are they going to build into speculation? Will it be possible to short people's coins? That's kind of the biggest concern that I have, because if it is that opens up a series of incentive problems related to— you're basically giving people an incentive to trash somebody else's reputation. And I think to me, Steph, I'm curious to hear your take on this, but that's like, for me, that's the biggest drawback related to this right now is that if those speculation features include some kind of shorting functionality, then there's not just an incentive for somebody's reputation to go up, there's There's also incentive for the reputation to go down.

Yeah, I think so. There are issues with the platform as it exists today. You mentioned one. There's no way to take your money out currently. There's also issues with how the platform seeded and all that. It was a super smart growth hack, but parts of that were actually illegal, right? Like monetizing someone else's identity without their permission. But let's just ignore those for the time being and say, there's problems with the platform. Every platform starts half-baked. It may evolve. But to your point, what I think people haven't really thought far enough along with is, what does this turn into? And of course, right now, it's small. It's invite-only to some extent. But as it evolves into something perhaps meaningful, in size, in volume, et cetera, you're going to have different kind of financial instruments created. And there are all these financial instruments as it relates to companies. Most people are familiar with them with public companies. But what does it mean when that turns into someone's reputation, right? And of course, any, at least in theory, people would be opting into this as they join the platform. But I don't think people have really thought about what it means to have people betting on your reputation, right? To your point, like someone shorting your reputation, someone actually creating things to manipulate the world such that you look good or bad. Of course, some of those incentives exist today. Today, but not with the same force, I guess, or the same kind of perverse incentive where there's money behind it. And then you start to get into questions like, OK, so if I created a Bitclout coin, right, and I opted into the platform, and eventually I realized, well, this isn't working for me. People are shorting my coin. They're talking— they're making up stories about me that aren't true. My own following is upset because— they bought into this, and my coin is going down, and they no longer trust me. How do I opt out? That's another thing that I— maybe they will find a mechanism where this works. But I don't think people have thought into those aspects of the platform, right? When you join Twitter, or when you join Patreon, or Substack, you have an agreement that's very clear as to what someone's getting and what they're not getting. And you can end that contract. Once you've created a coin, a Bitclout coin, a creator coin, and it's out there, it's unclear how that relationship can ever end. And if it does end, if there is a hard stop at some point, you know someone's going to be holding the bag, right? Because all of a sudden, that coin doesn't exist, and it's just going to be a race to trade out of it as soon as people possibly can. So to your point, I just don't think— I don't know if creators joining the platform have thought through what they're really opting into, right? And we had talked about this before, Ethan, but you made a great point, which is basically like someone opting into this is putting their reputation at risk in some way, and the actual Bitclout platform has no, um, they're not really putting up any risk, right? It's, they're basically offloading the risk onto a creator. That's opting into sharing this with their audiences. Even past that, if we just talk about like what someone gets, if they buy into a creator coin, again, some people, I think a lot of people understand what it is today, but it is not an ISA, it's not a stock, right? So you're not actually buying into the future income or creations of that creator. You are buying into their reputation, which is a vague kind of amorphous thing, but that's fine. There's a lot of amorphous things that people buy into and it doesn't need to be necessarily like a physical good, But as you're buying into this, one of the things that you mentioned before, Ethan, is this idea that, you know, you may also be able to buy or buy and sell, trade posts and things like that. I actually think that what they're getting at there is, for example, if someone owns a Chamath coin, maybe Chamath opens up the door for anyone who owns this coin to be able to DM him or to access his special newsletter or something like that. I think there is merit to that, but what doesn't bake out for me there is, as soon as you start to incorporate those things, I think it actually undermines this very amorphous thing that is reputation. Because we can all kind of vaguely say, we think Chamath's market cap, at least on BitCloud today, is— let's see. I think it's like $40-something million. And you can be like, OK, that sounds right. He's important. He's well-known. Oh, sorry, it's $14 million currently. But that's fine, and you can buy into that. But as soon as you start to be like, hmm, he's offering DMs, for example, as kind of something that rewards his coin owners, the math doesn't bake out, right? And I think it actually, again, undermines the concept where all of a sudden you're like, OK, Elon's a busy guy. He can kind of be willing to DM 5 people a day. At the current market cap, you're looking at a single DM being worth like $10,000, right? And then all of a sudden, I think people owning it are like, OK, this is not worth the money, right? So I think you either have to keep it as this amorphous thing that has reputation, or it basically becomes like a Patreon or a Substack, where it's very clear value for value. And as soon as you start blending the two, I think you actually— just confuse people and undermine the original concept.

For sure. This is one of the things that I am also a little bit confused on. And so we could talk about it through the perspective of an example. So Shawn Puri, who is— am I saying his last name right? Is it Puri?

I think so.

Puri?

Puri? I'm not sure, but—

Shawn, the co-host of the My First Million podcast, really successful guy. He's put a lot of effort into building his reputation. And you two were having an exchange on Twitter yesterday, which is really interesting. So far, Sean's pretty bullish on this thing, and I think I understand his, his take. He has a couple of points that he made. He says something along the lines of like, okay, well, here's why this is cool. It's because as a creator, I get to monetize my reputation building. So it's not just— it's— I'm not just monetizing at the end. It's like, if I'm becoming more and more popular, my personal value is growing along the way. And I think if I had to guess why people are bullish on this now, I think a lot of them are thinking the same thing. It's this appears to be a win for creators because you're no longer building your reputation for free, somehow monetizing that. What confuses me though, or what I would push back on is the idea that— there's two things. To your point, a lot of the features that are mentioned in this white paper are things that actually already exist. And point number 2 is, in my opinion, this platform increases your risk and exposure as a creator. So I think it actually— like, I don't think the value it creates is worth the risk to your reputation, especially given that there are other ways to capture this this value elsewhere. So I'll give you a quick example. I'm just going to run through it. Continuing through the white paper, what the authors have said is like, okay, what are Creator Coins useful for? There's a few things. One, they say the stakeholder meeting. So you could, like you said, you could basically meet directly with people who hold your coin. Okay, that's a cool idea. A new way to prioritize messages. So you could, rather than having like this huge inbox that's just overflowing with people, you could say, just show me the messages from people who like, oh, own 10% or more of my coins or something like that. You can prioritize based on ownership. That's interesting. Sponsored posts, premium content, paid likes. Okay, I get it. These are all legitimate ideas, but here's the thing: you can already do all this on other platforms, right? Like, I already have a way to do a stakeholder meeting through something like Patreon, to your point, or sponsored posts. So it says right here Creators have an inbox where anyone can bid to have them repost a particular post. So if you want Kim Kardashian to retweet your fashion brand, you submit an entry to her inbox, and if she retweets it, she keeps your money. Great, but that's already happening. That already happens. They've streamlined it a little bit here. But here's the big question. At what cost have they streamlined it? The cost is the whole world can now gamble on your reputation. And I don't know that long-term creators are going to see the extra value in that when they could just be doing this through other avenues. Last thing I'll say about this too, the last thing they say, one of the features is money likes. So likes can be reimagined as purchases of the creator's coin. So it costs money to like something. I get that technically speaking, that's a feature that could be implemented. But I think, my personal opinion, that I think people are overestimating followers' willingness to pay to like content. There's a reason Facebook and Twitter are free. It's not that they haven't thought of monetizing those like buttons. It's that I just sincerely don't think most followers would do that. So legitimate uses for this, and I can see why people are excited about it, but I have to question long-term whether or not the audience engagement is there and whether creators will really find value in this given the trade-offs and the risk-taking phase.

Just to comment on that, so there, to your point, a lot of these features exist in other places, and people could argue, oh well, as you kind of aggregate them into one platform, that's really interesting. But I actually, to what I was saying earlier, I think that actually undermines aspects of it, right? So if you're just trading on reputation and you don't have any sort of direct relationship of like, I give you X and you pay Y, then again, this amorphous thing, I don't I don't personally want to participate because we've talked about some of the negative long-term consequences of people actually betting on your reputation. But as soon as you start to introduce stuff that's more like something like Substack or Patreon, where people— again, it's like a trade of a very clear value, the economics no longer makes sense because of the bonding curve that exists within Bitclout. So there's only going to be a certain number of people— if people aren't familiar within Bitclout, Every time additional Bitcloud is purchased, it's done at a higher price, right? And there's going to be just a limit to which people are going to be willing to spend on your newsletter, right? Or like to get a DM from you, right? And so it just like, that actual relationship may sound interesting at first because you're like, it, you incorporate scarcity and you actually reward early, early people who buy into you, but it starts to degrade really, really quickly for something like this. Right. So I don't think people have thought about that. And then the other part is, again, I think Bitclout has some really interesting ideas. And if you were to take it and adjust it in certain ways, and we'll talk about this, it may make sense. But the part that I think people are missing is like, you have marketplaces for certain things like companies, because of course, companies die, but companies tend to last for quite some time. And even within like as a creator myself, I can create something like a book that will outlast me and can actually have a shelf life for a very long time. If you look at history in, you know, any sort of sense, people's reputations are fragile and short-lived, quite frankly. And that's without these kind of extended incentives to actually manipulate that, right? And so it's very rare, even top celebrities, you know, maybe their shelf life is a couple decades, but most of them, it's, you know, a couple years max. And then creators themselves, again, like, you think about who your favorite creator is today, it's probably not the same creator as a year ago or 3 years ago. And so betting on people, people's reputations is a little— maybe silly is not the right word, but I think of it as like betting on a stock that you know will almost certainly go to zero within the next couple years, right?

Yeah, totally. I think this is a really important point that isn't for whatever reason isn't being discussed widely enough. Let's assume for a second that eventually there's the ability to short these coins. Right now, I don't think it's possible. And it may be that the platform doesn't intend to build that ability at all.

But even if the platform doesn't, people— if there is incentive to create a monetary instrument like that, someone will create it.

Yeah, I agree with you there. So if we assume for a second that that is the case, then let's look at statistically what's the smartest play for an investor. What's more likely, that somebody's reputation is going to continue to go up forever, or that they will eventually be canceled, especially in today's environment?

Yeah. I mean, I feel like it's inevitable for people with large followings to eventually be canceled.

Exactly. And which means that under, you know, if we assume that some sort of shorting instrument becomes possible, then the smart money, in my opinion, is to bet against everybody. Like, the smart money is on— is actually against most reputations these days.

So, uh, it's kind of like when you think about it, so the stock market over time is expected to continuously go up, right, if you're talking about like an index like the S&P. Um, and that's why in general you want to bet on stocks and not against them. But to your point, this is almost like the alternative, right? Like the opposite where the trend line of what most people, not all people, will tend to go to zero, right? In terms of the reputation. So to your point, it's like actually betting on this, maybe the same way that betting or shorting a stock can provide you some short-term return and you can be speculative and win, In the long term, if you're betting on these things, you're probably going to lose.

Right. And if you look at just the way that options work, the potential upside on shorting could be significantly higher than even owning your stock in the first place. And I just think this becomes much more complicated when you introduce large financial incentives for tanking somebody's reputation. So that aside, I want to dig into something that you also mentioned which is the actual math on how these coins' values change over time. So I mentioned before, one thing that I understand is the enthusiasm that this could somehow fund a creator's career, because being in this space, I know how hard it is to make money from an audience, and also just really care about creators and want to see them succeed. So I get the enthusiasm, for sure. For anybody creating— sorry, continuing through the whitepaper, one of the things they talk about is the Creator Coin Supply Curve. So the value of these coins doesn't actually change based on perceived value of the creator. It's not a direct correlation. The value of the coins goes up and down based on the supply alone. When somebody buys your coin, new coins are minted. and the price of the coins goes up. And when they sell your coins, those coins are destroyed, the price of the coins goes down. What that means is that there's a very predictable price for the coin depending on how much has been minted. You can literally tell me what somebody's market cap is today, and I can tell you exactly how many coins are in circulation for them. It has— which means two things. One, this isn't really based on reputation. It's based on I guess, supply. Um, and two, it means that you can actually do some math related to how many of these coins you have to sell in order to make a certain amount of money. So I want to talk about two situations in particular. One is, uh, what it takes to make about $100 grand on this as a creator. Now, there are different ways to do this. Uh, there are some things that are interesting about this platform. So one is that As a creator, you have the ability to set a percentage of the supply that you automatically get. And what happens then is like, you can set it at— I think it's— you can set it at anything, but they suggest 10%. What means— what that means is of all the coins that are purchased, 10% goes straight to you. So if somebody comes and buys 100 coins, you automatically get 10 of them. And, uh, that's one way to do this. The other way is to set it to zero 0%, and then buy a bunch of your own coin yourself so that just your own value in your holdings goes up as other people buy. Two important things— or one important thing to know about this is that— and for whatever reason, this isn't widely discussed— creators, they only get paid on net coin sales. What that means is that if I come and buy 100 coins and then sell 100 coins, you actually don't get any. If you have your— even if you have your creator percentage set to anything, right, there has to be a net purchase of your coins in order for you to be paid. What's unclear inside the white paper is whether or not that changes. Well, two things. It's unclear what timeframe they're calculating that net purchase based on. right? So this is— maybe it's hourly, maybe it's daily, maybe it's monthly, maybe it's yearly. I don't know, it's, it's not stated. But what that means is like, you know, let's say it's— let's say it's daily. There could be tons of trade volume on you across the course of a day and you don't benefit at all if it's, if it's net zero. If it's monthly or longer, then again, you're not really benefiting from this as a creator if, if it ends up being net zero. So there needs to be some clarity around how quickly that percentage is actually calculated for the creator in order for me to believe that this is a benefit to creators themselves rather than just the people behind the platform. Here's the thing that's, uh, I think is interesting. So if you— let's say you set your percentage to 10%, all right, based on the economics of the coin, if you want to make $100,000, then that means you have to have 132 coins sold. At that point, your coin would be worth about $7,600, and people would have pumped about $339,000 into your stock as a creator. So here are a couple of things that I think are interesting. I agree that that is exciting on the surface, that you could make $100 grand from people speculating on that. But I think there's a question here, which is, if you can get people to spend $339,000 on you, are you capitalizing at the highest possible rate? And is there a better way for you to capture more of that directly from your supporters than to allow them—

Without risking your reputation.

Yeah, than to allow them to bet on you. Exactly. That's what I'm thinking of right now.

Yeah, I think a couple thoughts there is just, you're right that right now in being able to reap the rewards of being a creator on the platform, you need to basically, you need to push someone to buy your coin, which is what their incredible growth hack, right? You've got to give them kudos, such a great growth hack of preceding the platform, although partially illegal in what they did. Partially illegal. We should say partially illegal, but incredible growth hack, but that is basically what's happening, right? That's what's pushing people to the platform. But just remember, there's these incentive structures where, as a creator, think about like, as a creator today, ask yourself the question, like, would I sell my supporters a shitty product, right? And some creators are cool with that and there's MLM schemes and all that stuff. But most creators would be like, no, I care about how my audience views me, 'cause I have a long-term relationship with them that I hope to keep. right? And as soon as you start pumping them into this reputation scheme and you no longer have control, right? Because I have control when I say, hey, Steph Smith audience, I want to sell a book and I, and I've created it and I understand what's in it and I think it's valuable, right? As soon as you start trading on this reputation mechanism, and especially if you're the one pushing people to actually buy into this, then if crashes, which again, we talked about reputation life cycles are short, so it's not guaranteed, but it's, I would say, likely, then you have in some way probably sold your audience to this, what I would call potentially a shitty product, right? People may view this differently, but that's kind of how I'm thinking about it as a creator, where I want to only push my audience to buy things or to monetize them in some way when I'm proud of what they're getting from it, right? And of course, people can say speculators can speculate, whatever, right? But there is something really important here that it's different if BitClout is pushing people to buy creator coins versus if they're now kind of offloading that task, which is, again, their genius growth hack, onto other people to do this for them, right? And I don't think, or maybe they are and they're okay with it. But I, what I would just encourage if you're a creator listening to this is like, if you're creating a coin and pumping it to your audience, that is what you are doing. You may think it's actually a good investment. And if they're early, they can make money off of it. Okay, cool. But just know that you are selling something to your audience. Right. And that's where I think this does differentiate between something like a Twitter, right. And something where there's actual financial incentives.

For sure. And, and the interesting— to me, like, the interesting thing about what you're saying is that this isn't just your audience. These are your biggest fans. These are the people who are literally willing to put their money on your reputation, the ones you, you have to take care of the most, right? So it's, uh, it's this very complicated scenario where the people who you're supposed to protect the most are the ones who stand to lose the most if an outside force takes an interest in your stock price. And there's just not a lot you can do to control it. So it's a very complicated situation. Now, let's talk about another—

Can you just super quickly, can you give the analogy of the ICOs? Because that's basically what it is. Because just when it's positioned, this thing has been positioned so many different ways. And that's partially because it's still kind of half-baked and things are being worked out, and it may evolve into other things. But at least as to to what it is today, I thought what you said about it was so spot on in terms of what this really is, at least so far. Yeah, sure.

So on paper, and again, I think one of the reasons that BitClout has been so successful is because they are master marketers. I don't approve of it, but it's kind of like when your kid gets in trouble and you're— I don't have a kid, but like—

You got to.

No, when kids get in trouble, you're like—

You like them, right?

Yeah, you're like, oh, you're in so much trouble, but I get it as well.

Like, nice job, buddy. Yeah.

I don't— I don't approve of what they did, but it's a smart growth hack. The other thing is that they're positioning this product in a very smart way where the reality of what it is has been abstracted away. So what this is on paper is they've basically done 15,000 ICOs without the permission of the people who are backing those coins. By scraping Twitter and creating an account for the top 15,000 people, they've done 15,000 ICOs. And now they're basically just trying to get people to buy into those ICOs. And I think anybody who's thinking of getting into this, either as a creator or an investor, should ask themselves, one, as a creator, would I create an ICO for myself? If the answer is no, think twice about—

Just because someone did it for you doesn't mean all of a sudden it's a good idea.

Yeah. And then similarly, as a backer, Would I buy so-and-so's ICO? It starts to break down, because when you think about this as betting on somebody's reputation, that's one thing. You're like, oh, okay, well, somebody like Kim Kardashian or Tim Ferriss or Steph Smith, these are all people that I think are doing interesting work and are probably going to become more popular on this platform. So if I'm early, I should buy in. But you have to ask yourself the real question, which is, if I issued an ICO tomorrow, would you buy it? Probably not. But what the platform has done is aggregate thousands of ICOs and make it extremely easy to issue a new one, which could be useful. Like, there's, there's potential there. But let's not, let's not mince words about what it is. These are just ICOs. That's literally all they are. So I think that's an interesting way of looking at it. One other thing that's really important related to what I was talking about earlier is how you actually capture value from this as a creator. So in the example that I gave, if you wanted to, say, build $100,000 in value, you'd have to have roughly 132 of your coins sold. At that rate, again, the value of each coin would be about $7,600. Now, what happens when you want to take your money out? And again, this is an example that Sean gave, and I think it's a good one. He said, and I'm paraphrasing, let's say I want to take a year off and just work on creating or take some time off, something like that, I can cash out of my ICO or my coin and go do that. Okay. So if you've gotten yourself to the point where you have $100,000 in this in value, in order to get any money from that, you now have to sell. You just sell your coins. If your coin is trading at $7,600, which it will be— that's a concrete number, you can't change it. Oh, actually, no. I'm sorry, I'm wrong. These figures are based on the current cost of BitClout. So if BitClout goes up, your coin could be trading at considerably more. But current cost, you would have to sell $100,000 worth of your coin at $7,000 a pop. You're talking about selling around 10 or 12 coins, which would be most of your holdings as a creator. What the curious thing about this is, is that with only 130 coins issued, if you then sell 10 or 12 of them, you're destroying roughly 10% of the stock. And the value of your coin will go down by 10%. So here's where this becomes a dangerous thing, I think, is if this actually takes off as a legitimate way to gauge somebody's reputation, what happens when you want to pull your value out and all of a sudden the market sees your reputation go down by 10%? Maybe nothing happens. Maybe people buy in. Maybe people start looking more, trying to figure out why your reputation is tanking and they start finding reasons. I don't know, but it just doesn't seem like— it seems like something that creators should at least be thinking about, because there are better ways to make $100,000, or at least there's other ways. To make $100,000.

Yeah. There was a tweet in response to some of the conversation that was happening. And this guy, John, basically said, the bonding curve encourages creators to pump and dump their own reputation. I know creators who have bought up their own Bitclout cheap and then dumped it on later investors. Horrific incentive structure, right? So again, it's this idea where, like, sure, you can make money off of this, right? There's endless ways, especially if you're early, to make money off of this. But just remember that even though this seems like an easy way to make money, anything where you make money, there, there is a cost, right? And in this case, part of that cost is your reputation if it's your own coin, right? And I'm not just talking about the, like, philosophical reputation, but people, if you pumped to buy your coin, who did it and put their real money into this, and you end up selling because you want to net that profit, they lose money. One quick question though I had is In the same way that there's— and this is like a genuine question, I don't know the answer— in the same way there's a bonding curve where the more, um, the more demand there is and people buying the coin, the price of the coin goes up. As you sell, the price of the coin goes down, right? Um, okay. And is it also that same exponential relationship where— well, the reason I'm asking, because you said if you sell 10% of the coins, wouldn't it actually go down more than 10% in value? It would go down exponentially the same way that it went up exponentially.

Yeah, so this is, this is something that's a little bit unclear. I can tell you what they say in the white paper. So give me one second to find this. Okay, so it says, uh, buying creates coins while— and while buying creates coins while pushing the price up and locking money into the profile, while selling destroys coins while pushing the price down and unlocking money from the profile. OK, this means a couple of things. First of all, and again, this is something that's kind of unclear based on the way this is written, how much value do you get to hold onto as a creator if, let's say, you have your percentage set to 10%? If people sell your coin, does that money disappear from your account?

I think it seems like it does. Yes. No, it does. So that's what I'm saying. You own a certain number of coins. And what I'm trying to get at is this, just as quickly as a coin goes up in value. From what I understand about the way this bonding curve works, it goes down in value, right? So if you sell a coin at $7,000, the next coin you're selling isn't at $7,000. And if you sell 10% of the coins, that 10% is actually going to reduce the price of coins by more than 10%. I don't— I can't do the math in my head, but it's going to be a lot more than 10%.

You're— yeah, you're absolutely right. So I've got, I've got the chart here and the, uh, just to give you the idea. So if you were at 132 coins, which is about like based on today's prices where you'd need to be to make $100 grand as a creator, your coin would be selling for $7,600. If you then sell 13 of those in order to capture your money, right, that would bring you down to 119 coins and it would be going for $6,200. So that's a difference of $1,400, which is about 20%.

Right. Exactly. Yeah, so I mean, one of the things that this kind of makes me think of is just, sure, it's great to be early to a platform. This is not investment advice, obviously. If people want to speculate, go speculate. I don't have a problem with that. It's more so just be aware of, I guess, the difference between is this platform providing value to people and therefore they're engaging, or is it set up in a way that where they've just done some excellent growth hacks, they have excellent kind of incentive structures to get people to want to participate. Like, which one of those is happening? And really, I mean, it may be some combination of the two, but just remember, like, right now the door is closed. You can't exit. So the price is only going to go up right now, right? People know this, but that's something really important to keep in mind. In addition, you have all these people who they've incentivized by pre-seeding their accounts who are now sharing it with the platform. But it's early days, right? So you don't have the kind of negative stories that I think will come, right? Everyone right now is making money. Everyone right now has people who are excited, and their audience is excited because they've told them about this thing, and more people are rushing in. And, you know, at least for now, they're making money. And again, I think there's totally an argument to the fact that you can make money off of this platform today, and there's a reason to speculate on it potentially. But just keep in mind that the structure that it is today is just— it's only going to go up today. So that's why people are excited. That's why people are telling other people about it. Of course, the short term is very clear to me in terms of what will happen. But really what we've been talking about is like, you know, what happens when those stories start coming out and some creator you know, just told their audience to buy this thing and they're left holding the bag. How does that creator look, right? How does it look once a creator decides to exit the platform and we finally see what that looks like? As an example, we were talking about this earlier, but I was actually one of the people that was not part of the original $15K, but someone decided— so outside of the $15K, you can just create an account. And someone, I guess, impersonated me, right? They took my @staffsmithio handle. They put my picture in the same bio for my Twitter. Um, and I was like, how can this be? And it's because anyone can just create an account today. So that's something that they'll probably fix, but I emailed them and, you know, to their credit, BitCloud actually took it down. I will say they took it down without verifying who the hell I was. Right. So, so someone could have just done that to another person's account as well, but there was not much, but thousands of dollars worth of BitCloud, at least in theory, within this this coin, what happened to it, right? We haven't even seen what happens to, um, these systems because we were only in this like exciting growth stage of like— because it's literally geared where it can only grow, right? There's no backdoor, there's, there's nothing that can happen today that would be negative. But as soon as those things start to happen, I just— I, I guess we're just encouraging people to think past this early growth stage and think about where does this platform actually extend to? Because it's not as simple as, as like what it seems to be today.

For sure. Yeah. I think there's a very lopsided view of what this actually is in large part because of what you're talking, the gearing, and also in small part because of the network effects of the way it was launched. Like a lot of the people who are on this platform know each other, they're all friends. And the only people who have access right now are like friends and super fans. So it's all just kind of a party. Everyone's having a lot of fun with it. What happens—

Everyone's happy when they're making money until they aren't. Right?

Yeah, exactly. And the other interesting thing is that this is— okay, it's worth discussing this. By the way, we don't want to turn this into like a hate fest. So after— Totally. We want to get into some of the legitimate uses and like what we would need to see in order to be more bullish on this. But it's worth pointing out too, to anybody who's a creator, This is not geared towards your happiness. So there's already an example of this playing out. Once you open yourself up to be bet on by the world, the only incentive is for people to make money. Some may buy your coin in order to support you, to show support, but major players and I guess I'll say that's certainly not the incentive for everyone. The major incentive is to make money regardless of whether or not you are happy. And so we saw a funny version of this play out recently where Ryan Beagleman was on the My First Million podcast. Ryan's a friend of the show. He's a really interesting guy. He's built some successful media companies, and he was early to BitClout. And so he was the one who was brought on as one of the experts on this. To talk about it. And while he was on there, Ryan and Sean are bullish, Sam was a little late to the party and he was asking questions and he wasn't really sold on it. And Ryan was trying to stir the pot a little bit. He was trying to get Sam to take on Austin from Morning Brew and see who could get their value to be higher. Again, just friendly competition. Ryan's friends with both Sam and Austin, and he's invested in both those guys. So not a big deal. But the question is, first of all, Sam said something which was small, but I think important, which is he just said, "I don't want to do that." He's like, "I've made my money, man. I don't want to take on this competition now." He's got no reason to compete with Austin over reputation, but everybody who invests in those stocks, has incentive for them to do that. So in this case, it was an example of friends just kind of bantering. But what happens all of a sudden when larger money moves in and has the exact same incentives? They are not set up to care about your happiness the same way that your friends are. And right now, the whole platform is mostly friends and fans. So I think that's extremely lopsided and is creating a different image of this thing than will ultimately play out to be.

I was just going to quickly add on this idea that like right now the platform is benefiting from people with large audiences. And to your point, these people have money, right? If anything, the thing that they want to retain is their reputation and how they're viewed in the world, right? Because they already have enough money to last them their lifetime. And I think what we're going to see, quite frankly, is that as some of the negative aspects of this platform potentially emerge, these people are going to be like, I don't, I don't need this, right? Like, I've got what I need. And why am I putting my reputation on the line where people can, or have these incentives to, or additional incentives, I should say, because there are incentives already on certain other platforms, but additional, more concrete incentives to take someone down. I just— or manipulate their reputation both positively or negatively. They're just being like, I don't, I don't need this, right? And these people already pay tons of money to be seen positively in, in different ways, whether it's like buying art or wearing certain things or being on certain shows or hanging around with people, certain people. And I think they're just gonna be like, this doesn't make sense for me. And that is BitCloud's ability to um, at least today, grow. And I think that's actually going to reverse at some point when people start to say, I don't want this anymore.

For sure. It's like their, their genius is also their downfall, in that they, they, they conscripted 15,000 of the most influential people in the world in the beginning. It's like you, you could not have a better marketing team out there, right? But you also couldn't have a worse enemy. And as soon as As if, like you said, if hypothetically people find that this just isn't worth the upside, then I think they're going to start encouraging their audiences to get off the platform. And that could spell the end for this. Now, it's possible that that's all it needs. Like you and I mentioned, there are some legitimate use cases for this, and maybe all it needs is a little bit of time to develop the more legitimate sides. And in 5 years from now, we won't be talking about BitClout as a betting platform, but the underlying infrastructure, which is more important, will still be around. If that's the case, great. But I think it's a different conversation than whether or not this really is the future of reputation management. And by the way, I mean, to your point, managing your reputation is hard enough without incentives for other people to manipulate it. So I just don't see why people who can make significantly more money on their own will continue to do this, but I could be wrong. I mean, here's the other thing.

We're ready to be wrong here. Um, and, and this is certainly not like a black or white, this is absolutely going to happen. It's more so us being like, have people thought of this? Right. And maybe they have, and maybe they're just like, we're cool with this, or, or I actually think that's probably unlikely to happen or whatever. But I do think there's a portion of people who haven't thought through like what incentives exist or will exist given this structure and how will that evolve over time. Time. I just really think, to your point, like, their excellent marketing is also just not going to work over time, right? And it's actually going to reverse in some way where the people who grew the platform are just going to be— they're so important, or I shouldn't say important, so wealthy and have reputations already, they're going to say, I don't want this. I don't want to risk this or add these additional incentives when I don't need to.

Let me ask you a question then, because I think it's important to be— or we both think it's important to be balanced here. We've talked about this a lot. We're like, how are we going to make this not just like a hate fest on BitClout? Because you have some legitimate ideas here. Okay. So I have a question, which is, what would you need to see in order to believe the opposite? What would you need to see in order to reverse your current opinion on the platform and think that it's actually a benefit long term?

Yeah, it's a great question and totally agree with you. If people are listening, I, I think in most cases you want— excuse me— a platform to succeed, right? Any sort of innovation tends to be good. I just think if you think about it like a spectrum where anything that you create is gonna at least at first be half-baked, but on one side of the spectrum you're talking about like putting up like a GIF online, which is just for fun. Who cares if it's half-baked? It's not hurting anyone. And then maybe on the other end, you've got like a vaccine or something like that, which is like, this cannot be half-baked, right? If you're injecting this into someone, this matters. Do not mess it up. And then this is somewhere in between, right? And the reason that I think it skews more towards getting this right is because people's reputations are all they have, right? I mean, of course you have assets and stuff, but This is the only thing that will carry with me from the day I'm born until the day I die is my reputation. Everything else comes and goes, relationships, people, assets. And that matters. My reputation matters in terms of my ability to build an audience, to be wealthy, to be happy, right? All of us, you know, whether you want to deny it or not, like the way that people perceive us matters to some extent. And then on top of that, you're layering on not just reputation but money, right? So anything that relates to people's finances and investing also needs to be a little less half-baked, right? A little more baked. So to your point, I think there are ways that if Bitclout could evolve and be less half-baked in certain areas, there's something here, although I don't think it looks quite like Bitclout does today. So some of the things are that I think this idea of trading on people's reputations, if you're going to do it, it needs to be Well, it needs to be regulated in some way. And I'm not talking about like the SEC or something like that, but it needs to be opt-in, right? Fully opt-in. Right now, they're seeding 50,000 people. Incredible growth hack, borderline or maybe fully illegal, right? So that needs to be— it can only be opt-in and you should need to be able to verify that this person is the person that they are. And then on top of that, there needs to be very clear clear outlines of what happens if this person no longer wants to participate, right? Because I do think that's a very, very likely scenario for some people, at least. The second is if you, you could keep it as this vague amorphous thing like reputation, but I think that starts to falter because again, I think it, it's hard to understand what that is and maybe that's okay. But what I do think makes sense is right now they have this kind of amorphous, like, Is it reputation? Is it you're betting on posts? Can you— creators can pick and choose what they get. Well, if that's the case, then the marketplace itself should be very clear about what people are getting with a certain coin, right? Today, it's nothing. But if you're going to create it, then maybe certain creators have more of an ISA. Maybe certain creators do have the ability to have one-to-one conversations with their audience. But then you start to get more into, again, things that exist, like a Patreon or Substack, just that happen to be built on the blockchain. Um, so that's important, just clear terms. That doesn't exist today, and I think it should. And then the third is just transparent marketing, right? And so I think most people have caught on to this idea at this point that Bitclout is not— or I should say creator coins are not really equivalent to a stock. But that is important because if people are buying in and thinking that they're getting anything in return for buying into this creator other than just speculating on their reputation, then I don't think that's right. And again, in certain circumstances, you saw certain things like this happen at the beginning of Twitter, right? Where they preceded platforms or people were pretending to be other people. But again, when you're talking about people's reputations, and then on top of that, people's finances, I just think it's got to be more clear, right? You can't have people saying this is a stock market for creators, when it's— when that's confusing, right, and misleading for people in understanding what they're actually buying.

For sure. I totally agree. If you were— if you were to ask me, like, what would it take for me to be pro-BitCloud? Fully agree. It's got to be opt-in. Absolutely has to be opt-in. If you want to participate in this, by all means. I would never stop somebody. It seems crazy, but like, hey, you do you, you know? If this— if this seems like a fun way, or— exactly, that's fine. But it's got to be opt-in, and it's got to be controlled. Like right now, everybody has— like everybody, if you are making your money online, or if you have an online presence at all, which is most of the world at this point, you now have to protect against this because it's not opt-in, it is opt-out.

Can we just talk about that real quick before you go on? With my case in that scenario, when I tweeted about someone impersonating me or whatever you want to call it, Certain people were saying, you know, Steph, like, you should just create your own BitCloud so that you just let your audience know, hey, this is me, not this one. I don't want to do that. Like, I shouldn't have to. And again, if people want to participate, go participate. Like, this is not a conversation about like what people should or shouldn't do. But if I personally as a creator don't want to participate, my course of action shouldn't just be Okay, go, you have to participate to block other people from impersonating you, right?

For sure. I was thinking about this yesterday. I actually think there's a really big opportunity here for some crypto law firm to get involved because at this point, and again, I'm nobody, I have a tiny, tiny audience just kind of starting down this trail, but I wouldn't want to have to think about this. And I think there's an opportunity where law firms or talent agencies could basically— I don't know if it would be an issue, a token or what, but charged to do reputation management on this, and basically police these platforms to make sure that your identity is not being used on them. I think there's a huge opportunity there. Even if BitClout eventually pivots, unfortunately, I think this is the kind of genie that can't just be put back into the bottle. Their whole blockchain is open source, meaning even if they change, it wouldn't take much for somebody else to spin up something similar. So we now live in a world where it's possible to spin up a betting platform based on people's appearance and reputation. You can't just undo that. So there is some kind of opportunity here for law firms to get involved, which I thought I'd call out. And then to your point, this shouldn't be something that people have to opt into in order to protect themselves from. So that would be one major thing, opt-in. I like your idea of transparency. And then related to this, I think this rolls up into transparency, but the founders have got to have some skin in the game. So like this, here's the thing that's one of the things that's crazy to me. This platform was built by a pseudonymous founder. So people say that they know the person behind it, maybe they do, maybe they don't, But at the end of the day, the person who built this has no potential downside for their own reputation on this platform. And one of the things that's kind of funny, I told you about this yesterday, Steph, but I'll just tell everybody listening, people are already tweeting. There's this tweet from Michael Arrington, who is the founder of TechCrunch. He basically said, PSA, Bitcloud is not a There's a Twitter account that's now trolling BitCloud. There's a Twitter account that's not associated with the company that's insinuating that they're associated with the company and is about to make money off of issuing coins and stuff. Early users of BitCloud are trying to protect against this. They're getting a dose of their own medicine. I don't know if Arrington is involved as an investor in BitCloud, but it was just funny to me to hear BitClout is now facing a situation where a pseudonymous user is insinuating that they are involved in their company and they're making money off of it. It's like, yeah, it sucks. It's a terrible way to launch a business. So—

Yeah, I totally agree. I mean, here's the thing. I feel like people listening and even— I created a document where I walked through some of these concepts and some people, or at least one person commented something along the lines of like, the fact that I don't understand crypto or the blockchain or whatever. One, I think, you know, we may not be experts, but we've done a little bit of diligence to understand it, at least at a base level. But separate from that, this isn't even just a conversation about crypto, right? Like, crypto obviously— or the blockchain, rather— underlies this platform. And of course, there are elements that are very similar to other financial assets, but like, I can say candidly, like, I'm invested in cryptocurrency, and I actually buy into aspects of that being the future. But not all crypto, just like not all parts of any innovation, are net good. And in this case, when you actually are— when crypto is decentralized, right? And that makes sense when you're talking about some entity just like money, right? But when you are talking about people's reputations, that should not be decentralized, because I am centralized. I am a person that, that is impacted by this platform. And therefore, as a person, if I want to take myself off the platform or to take legal action or to do something, there are reasons that certain things should be decentralized and certain things should be centralized to some extent, right? And in this case, when you are actually dealing with people's reputations, when you may even be breaking some laws by preceding a platform, You have to be responsible, right? There— this is always this fine line between centralization and decentralization, or something being, you know, anonymous or not, is that anonymity has a lot of good behind it in certain cases, but the kind of counter to that is always like, okay, well, there— where does the accountability lie if something is anonymous? And as soon as you go into this, again, this realm where you're dealing with other people's lives, that are not anonymous, there's got to be an entity that is responsible for that. And so I agree that, again, like, I just— something that maybe bothers me is just people look at crypto or anything on a blockchain as very similar and that the mechanisms should always apply. And that's where I disagree. And I think that in this case, that there should be, like you said, something that people can look to to be responsible the same way that Twitter is responsible for fake accounts. Accounts, the same way that all these other platforms are responsible for the things happening on their platform. This should also be true.

Totally agree. So tell me this, long term, what do you think the outcome is here?

I have no idea. I think we should quickly comment on the fact that, if people don't know already, there is a lot of money going into Bitcloud, and not just from the, from the, like, retail investor perspective, but from specific large VC funds. So Sequoia, um, I should actually look this up, but I know Sequoia, Andreessen, I think Chamath has publicly said that he has invested, and I think several other investment firms. But something to keep in mind here before we get into like what we think is the future is that just because you see someone betting on this, especially a venture capital firm, if you understand the way venture capital works is they make tons of bets in the hopes that something becomes huge, right? And most people already know this, but just because venture capital is investing in this, that just means that they think that there is a, a chance that this thing can become big, and they're okay if this thing falters. And they actually, just like every other bet they make, not specific to Bitclout, they expect it to fail, actually, right? Um, they just expect that one of the many investments that they make, the long shot, happens. So that's something important to keep in mind. In terms of how I view this is I think, you know, they're gonna, they're gonna add certain features that people are talking about a lot right now. They're gonna add a backdoor probably, especially if they're backed by these, these funds. They're going to probably improve on some of their verification processes and stuff like that. In terms of where I see it long term though, I'm not sure because I personally do think that people are going to realize that betting on people's reputations doesn't make sense. So I think what you're ultimately going to see, I think, is the evolution of this into something very similar to one of the platforms that exists today. If they really focus on the social aspect, it'll end up being a Twitter clone. If they really focus on this, like, transfer of value between creators and, and their, their audience, it's going to be more like a Substack or Patreon. If they focus more on this— what I actually think is a more interesting concept is this idea of being able to to sell part of your future earnings and really like incentivize your audience behind you, that's more like an ISA, right? And you see like, if you've heard of like, what's it called? I think it's called Big League Advance. I think they talked about it in My First Million. That's where, you know, this is already happening in other industries. This is for athletes where they basically give away part of their future earnings to a company that bets on them early on. So this stuff already exists, but really what I think is that you're going to see BitClout pivot in some way after they make their initial feature adjustments, and it's going to look like something that already exists today. And it may succeed, and, and in that case, like you mentioned earlier, that's a different discussion, right? So we're not necessarily saying Big Cloud forever will be terrible, um, or even that it's terrible today, but just the long-term view of its current trajectory has some very serious questions.

That's a great way of putting it. Yeah. And to piggyback on something you mentioned with the investment, I think there's two things worth calling out for anybody who hasn't looked closely at this yet. And again, I'll fully admit, I may be misinterpreting things here. So if I'm doing the math wrong or something like that, shout us out. And I would also give one more disclaimer, which is, we're both in media. I am more than willing to bring on the founder of this and let them speak their full piece if they want to. Somebody's willing to come forward and discuss some of these potential questions, by all means. This is not meant to be a takedown. This is just some of the things that are occurring to me. And if there's legitimate plans in place to curb them, then we want to hear about it. So that's the case. In terms of the initial investment, there are some things that are worth calling out. So As you mentioned, VCs are getting into this. One question that Stephan and I both asked many times is, what are we missing? There's so many smart people who are investing in this. There's no way they haven't thought of these potential downsides. There's just no way. Okay. So one thing to know, obviously what you said, a lot of these people are just taking a lot of bets. Also, financially speaking, if you look at the way the value of Bitclout scales, you'd have to be insane as a VC not to get involved in this. So here's the deal. If you read the one-pager, the value of the Bitclout currency, the base currency on which this entire model is built, it doubles with every million coins that are sold. If you do the math, again, I might be doing this wrong, but according to this tracker that tracks the size of the website right now, there's about $172 million worth of money that's tied up in creator accounts. Okay, so that means it's $172 million US dollars that people have so far actually used to buy creator coins. If you divide that, the current cost of Bitcloud is $149. So if that $172 represents all of the money that's currently on the platform, that means there's about a million of these BitCloud coins that have been created, 1.1 million. So long story short, there's a million coins. I could even be wrong. Maybe that's only 50% of the value. Let's say I'm 50% wrong and there's 2 million coins. The value of this coin goes up, it doubles every time another million coins is sold. And the company says in their white paper that they're expecting about 10 to 19 million coins to be created. First of all, it's a pretty big gap. But let's say it just goes to 10, right? If you do— if you run the math out on this, I feel like I'm talking about a lot of numbers here. But if, if it goes up to 10 million coins and there's currently, say, 2 million in existence, that means there's going to be 7 more doublings of the value of a BitClout coin, which could be huge potential upside for anybody who invested early. Your money will literally double 7 times. I hate to say that because it sounds like— it's not investment advice. Now, let's look at why the VC firms may have gotten involved. Maybe they really believe in this. But if you do the math out, there were 2 million coins that were set aside pre-launch for the founders and the investors, which is a potential value of $534 billion by the time 10 million of these coins have been issued. You know what, Steph, maybe I should just share my screen real fast. Do you think I should share my screen and talk through this real quick, or no? Is this making sense?

No, I think it made sense. I think the main takeaway is the idea that— so typically, when you get into something early, especially as an investor, you see the upside of that platform. In terms of, like, how many people— like, the revenue that it's doing. And in here, just in the way that the Bitcoin is structured, it's like, you— because of the scarcity, getting in early matters even more, right? And that's why you see people rushing to it, not just investors, but just this idea of, if I get in early, not only is this like— I'm not calling it a Ponzi scheme, but, you know, in a typical Ponzi scheme, you benefit from someone else under you. Doing what you're doing and then selling it to more people. This is like that, or has similar mechanisms, where not only do you benefit from other people, you know, who come after you, but because of this, the way that the coin is structured and how it doubles, um, and, and similar with Creator Coins, your upside is even more lucrative, right? And that's what I think you're getting at, is this idea where it's not even judging anyone for doing this, but just As you get into anything, ask the question, why is someone else sharing this? Right? Is it because like, if I share a link to an article, it's probably because I read the article and was like, this is so great. I think I want you to share in the value. And maybe there's an element of that where someone is saying, this is so great. I invested early. I also want you to invest early and to share in this upside. But there's an element to this where if I share an article with you, there's no upside for me other than maybe like feeling good about myself, right? And this, there's a very clear upside of someone who got in early, whether it's an investor or someone who just happened to create their own coin or someone who happened to invest in another coin, like we talked about Ryan Beagleman investing in Sam and Austin. So that's really important. Just always ask yourself, what are the incentives of someone sharing this? And here, I think that, you know, we talked about the growth hack and these incentives and this platform and the way that they like they set this up to grow. They literally, they designed it for growth. So it was so intelligent, but then it does make me question, you know, typically when you see a platform grow, it's because people are getting value from the platform and what it provides. And in this case, in the way that the incentives are structured, it really does make me question, you know, is it really just because people have been incentivized in this way. It's just something to be aware of, right?

Sure. Yeah, yeah. So these, you know, 2 million coins were set aside in the beginning for these investors. At this point, right now, today, if they can pull that money back out, based on the price of BitClout right now, that's worth $300 million. And if it continues to grow up to the 10 million coins that they expect to issue, the, uh, you know, the value of 2 million coins will be somewhere in the nature of $534 billion. So that's tremendous potential upside. The other thing that comes to mind too, when I think about early investors getting into this, I don't know if this is the case, but it strikes me that the way they launched this is extremely dubious. So it's possible that the investors bought in, in order to protect themselves, because this is another thing that can happen. Because the value of the coin scales in a certain way, if you understand how the value of the coin scales, you can set up a blockade against character assassination by just buying enough of your own coin to drive the prices up so that most people can't buy it. You could buy a pretty significant chunk of your own coin if you have the resources, and it would just drive the price up so high that you would own the vast majority of the coins that will ever be issued for you. These mega firms, maybe that's what they did. Who knows? I don't know if they really believe in the idea or if they did it as a potential protection against future downside that just happens to come with enormous potential upside. I don't judge— When you look at the potential cash out of this, I don't judge anybody that did it because it makes perfect sense. Turning a few million bucks into billions and billions of dollars is literally why they exist. That makes a lot of sense. But it's worth remembering that, you know, saying that every major investment firm is involved in this is kind of like saying that every major influencer is involved in this. The company didn't give anybody a chance to opt out. So it's worth questioning that initial assessment as well. Long term, in terms of what I think is going to happen, here's what I think is going to happen. Similar to what you're saying, I, I actually don't think this platform will disappear forever. I think the people behind it and the incentives are too strong. This is a genie that got out. I do think that we're overvaluing people's willingness to interact with creators. And so I don't necessarily think that's going to be a long-term feature. I think we're also overestimating the willingness of creators to stay on the platform. So here's what I think is going to happen. I think all the prices are going to continue to run up for the next couple of months while people get involved. Then at some point, they're going to stabilize. And at the same time, ostensibly, the company is creating a way for people to get their money out, right? Once two things happen, I think you're going to start to see people migrate back off of this. And it's— the platform is going to have to pivot in order to continue to survive. If people can get their money out, I think it's gonna be a mass migration off as Like you said, creators are just forced to deal with the downside of this. But also, once that upshot stabilizes and this becomes more like a typical stock ticker, where you're not really increasing your holdings on a regular basis, and you're potentially even decreasing them, I think the upside is small enough and the downside is big enough that you're going to see people migrate back off the platform and BitCloud's got some time to pivot between now and then. They're going to have to in order to survive. But 5 years from now, I don't think we're going to be talking about a stock market for people. I think there's something else related to that. The last thing I'll say, and this is the last sentence, or the second to last sentence in the white paper, is— let's see, what does it say here? In the same way that you can move Bitcoin from one wallet to another, Bitclout makes it so that you can move your clout in the form of your followers, posts, creator coin balances, et cetera, anywhere as well. Thus, in some sense, Bitclout is decentralizing social media much the same way Bitcoin decentralized the financial system. If anybody is involved from these major VCs that genuinely believes in this idea, I think this is probably why They did it. I don't think most rigorous thinkers look at the idea of trading on people's reputations as a good concept, but this idea of being able to move your clout from place to place may not be great, but it's better than what we've got in terms of social media today, character assassination, all that kind of stuff. This is an important feature. It's something that needs to be developed. And it's possible that this whole Bitclout betting scheme is just what was needed in order to get the more important thing into the world. So in 5 years, if this still exists, I think that will be the form that it takes. Decentralized social media will be much more popular. But the idea of betting on reputation, a lot of people are going to get hurt in the meantime, I think. In terms of the financial incentives here.

Yeah, I would just— I think I totally agree with that. I think this idea of decentralized social media has merit. I think the problem today is, again, there are some great ideas here. And if implemented clearly, I would say, is the important part, right? Transparently, where people know what they're getting, there's some real merit here. That just doesn't exist today. And the problem, again, when you're dealing with people's money is that today Bitclout has a little trouble iterating in the way that something like Twitter would, because Twitter can just— if they launch a feature and it doesn't work, they launch another one. But there's so much baked-in money already baked into the way that Bitclout runs today, and it's going to be hard to pivot it, as I was saying, I do actually think there's merit to this idea where you can have your own coin, and there's benefits that people have. But again, it's very similar to something like a Patreon or a Substack. And the market caps for these people— or I should say the largest ones— just don't make sense, right, relative to if you were actually to pivot to something more like a Substack or a Patreon. So I just think it's interesting to see how Bitcloud has launched, and it's going to be interesting to see how they maybe pivot, or maybe don't pivot, but if they need to pivot, what happens to the existing coins? And what are they worth? And I just think that is going to be interesting to watch, for sure. But I guess the thesis— there's a train. The thesis, I think, that we were trying to get at in this conversation, which hopefully came across, is not that Bitcloud is binary bad or good or anything like that, but if you're going to participate, whether you're a creator yourself and you want to create your own coin or you want to speculate, do what you want to do, right? Obviously, this is not financial advice. There's no judgment here. But think through past today and what it exists as and what this may look like and if you really want to participate in that. Or not even from an ethical perspective, but like, where do you see this going as an investment? Because it's not so clear-cut as it is today when The system is literally structured so that things can only go up.

Absolutely.

All right. Enjoy. I guess we'll leave you with one piece of advice that I always say is just never invest in something you don't fully understand. So do your diligence. Even if this sounds like something similar, like a stock market for people, do your diligence to understand what it is and where you think it's going to go.

I like that a lot. And then the last thing that comes to mind for me with this is I think it's Charlie Munger and Warren Buffett are both big on this concept of how trust is your really only long-term asset. If people think more about that, they will make different decisions, I think, than if you only focus on the financial upside. So get out there. Good luck. I don't know. Let us know where we're wrong. We'll hear from you. You know where to find us.

All right. See ya.