BitClout: The Good, The Bad, and The Unclear

Steph Smith

Alright, what's up everybody? I'm here with Ethan, and we want to talk about Bitcloud. Everyone's talking about it already. We don't talk about it because, you know, we don't really care if it's a scam. 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 are we thinking about it? As we read through the one-pager and do some of our own research, what kind of ways are we thinking about this? What incentives are there long term? We're just here to chat about it because 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 going to walk through and comment on it. So, Ethan, do you want to give us a start?

Ethan Brooks

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. 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: neither one of us are blockchain experts, but our full-time job is to kind of understand businesses, markets, and people, and stuff like that. So, we're going to talk about this from that perspective. I'm open to feedback. I want people to come in and explain to me what I'm not getting about this because so far, this terrifies me. This is like a "let me off the rocket ship" kind of thing, and we'll get into why. But that's a quick, quick caveat: I am out of blockchain.

Steph Smith

I have alarms going off in my head the more I read into this. But I also feel like maybe we're missing something, so let us know if we are. But yeah, let's jump in.

Ethan Brooks

Alright, so the first thing for anybody who hasn't heard of it: what is Bitcloud? I'm going to read a sentence or two from the very beginning of the white paper that kind of explains it. But then I want to go a little bit deeper and sort of 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. There's a difference between what it's being marketed as and what it really is. So, from the white paper, what is Bitcloud? Bitcloud 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 on its own custom blockchain. So, what does this basically mean? It means that Bitcloud has created a platform where people are almost like stocks. For example, 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 account public and allow people to buy and sell this digital coin that's based on their reputation. 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 are a couple of reasons why I think there's more to this than meets the eye. I'm curious; I don't think this quite tells the whole story. So, is there anything else more?

Steph Smith

Said something important, which is, it's kind of like a stock. Some people, I don't even think Big Cloud is necessarily... you know, 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." One thing that's really important there is, it's not. 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 like 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.

Ethan Brooks

for sure yeah that's a great. And there's there's something else that I grabbed my attention when I first read this there's 3 things in this first paragraph I'm gonna read the first paragraph from top to bottom so I think it's 2 or 3 sentences and then I'm just gonna 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 okay so three things that jump out at me from this which make me a little bit less enthusiastic or I just I find myself questioning so first of all it says you can speculate on people and posts and that's really interesting I don't the speculating on people thing makes sense to me because you know people can issue their coin and you can basically bet on whether or not you think the value of that coin is gonna 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 a lot of the excitement around bit or bitclout is related to the values of all these creators going up so people 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 alright and that's exciting and I think it's drawing a lot of attention and a lot of people who are kind of early are making money what I think is a little bit unclear at this.

Ethan Brooks

Is what they mean by these speculation features? Because the platform is unfinished. One thing that Steph mentioned early on is that anybody who puts money in right now has no clear path to take money out. That's a feature that's probably going to come. What I find myself wondering is: 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 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, the biggest drawback related to this right now. 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 also an incentive for the reputation to go down.

Steph Smith

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 is 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, you know, there are 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 is: what does this turn into? Right now, it's small and invite-only to some extent. But as it evolves into something perhaps meaningful in size and volume, you're going to have different kinds of financial instruments created. There are all these financial instruments as they relate to companies. Most people are familiar with them in public companies, but what does it mean when that turns into someone's reputation? And of course, 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.

Steph Smith

Like someone shorting your reputation, someone is actually creating things to manipulate the world such that you look good or bad. Of course, some of those incentives exist today, but not with the same force, I guess, or the same kind of perverse incentive where there's money behind it. Then you start to get into questions like, "Okay, so if I created a Bitcloud coin, right? And I opted into the platform, and eventually I realized, well, you know, 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. They no longer trust me. How do I opt out?" That's another thing that I... you know, 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. You can end that contract. Right? Once you've created a coin, a Bitcloud coin, a creator coin, and it's out there, it's unclear how that relationship can ever end. Right? And if it does end, if there is a hard stop at some point...

Steph Smith

You know someone's gonna be holding the bag right because all of a sudden that coin doesn't exist and it's just gonna be erased to treat out of it as soon as people possibly can so to your. 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. Which is basically like someone opting into this is putting their reputation at risk in some way and the actual bitcloud platform has no 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 his special newsletter or something like that I think there's 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 you know his market cap at least on big cloud today is let's see I think it's like 40 something $1,000,000 and you know you can be like okay that sounds right like he's he's important he he's well known oh sorry it's $14,000,000 currently but that's fine and you can buy into that but as soon as you start to be like he's offering dms for example as as as kind of something that rewards his 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 okay jamal's a busy guy maybe he can he can kind of be willing to dm 5 people a day at the current market cap you're looking at like a single dm being worth like $10,000 right and then all of a sudden I think people owning it are like okay like 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 like value for value and as soon as you start blending the 2 I think you actually just confuse people and undermine the original concept

Ethan Brooks

For sure, this is one of the things that I am also a little bit confused on. So, what we could talk about is through the perspective of an example. So, Sean Curry—am I saying his last name right? Is it Fury?

Steph Smith

I think

Ethan Brooks

it's curry

Steph Smith

curry I'm not sure

Ethan Brooks

But Sean, the co-host of the *My First Million* podcast, is a really successful guy. He's put a lot of effort into building his reputation. You two were having an exchange on Twitter yesterday, which was really interesting. So far, Sean's pretty bullish on this thing, and I think I understand his take. He made a couple of points. He says something along the lines of, "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 that I'm monetizing at the end; it's like if I'm becoming more and more popular, my personal value is growing along the way. If I had to guess why people are bullish on this now, I think a lot of them are kind of thinking the same thing. This appears to be a win for creators because you're no longer building your reputation for free; you're somehow monetizing that. What confuses me, though, or what I would push back on, is the idea that there are two things to your point. A lot of the features that are mentioned in this white paper are things that actually already exist.

Ethan Brooks

Number 2 is, in my opinion, this platform increases your risk and exposure as a creator. I think it actually... I don't believe the value it creates is worth the risk to your reputation, especially given that there are other ways to capture 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, "Okay, what are creator coins useful for?" There are a few things: 1. They say the stakeholder meeting. So, you could, like you said, basically meet directly with people who hold your coin. Okay, that's a cool idea. 2. A new way to prioritize messages. Rather than having this huge inbox that's just overflowing with people, you could say, "Just show me the messages from people who own 10% or more of my coins," or something like that. You can prioritize based on ownership. That's interesting. 3. 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 of this on other platforms. Right? I already have a way to do a stakeholder meeting through something like Patreon.

Ethan Brooks

Or sponsored posts. It says right here that 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. 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 you. 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. The last thing I'll say about this is one of the features is "money likes." So, likes can be reimagined as purchases of the creator's coin. It costs money to like something. I get that. Technically speaking, that's a feature that could be implemented, but I think, in my personal opinion, people are overestimating followers' willingness to pay for 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 sincerely don't think most followers would do that. So, there are legitimate uses for this, and I can see why people are excited about it. However, 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 risks that they now face.

Steph Smith

just to comment on that so there to your. 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 and you pay y then again this amorphous thing I don't I don't personally wanna participate because we've talked about some of the like negative long term consequences of people actually betting on your reputation but as soon as you try to introduce stuff that's more like something like substack or patreon where people again it's like a a trade of a very clear value the economics no longer makes sense because of the bonding curve that exists within bitcloud right so there's only gonna be a certain number of people if people aren't familiar within bitcloud every time additional bitcloud is purchased it's done at an at a at a higher price right and there's gonna be just a limit to which people are gonna 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 bigclub 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 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 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 0 within the next couple years right

Ethan Brooks

Yeah, totally. I think this is really important. For whatever reason, it 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.

Steph Smith

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

Ethan Brooks

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?

Steph Smith

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

Ethan Brooks

Exactly. And which means that, 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. The smart money is actually against most reputations these days, so it's kind of...

Steph Smith

When you think about it, the stock market over time is expected to continuously go up, right? If you're talking about an index like the S&P, 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? It's the opposite, where the trend line of what most people—not all people—will tend to go to zero in terms of 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. However, if you're betting on these things, you're probably going to lose.

Ethan Brooks

right and if you look at like just the way that options work the 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 wanna dig into something that you also mentioned which is the like the actual math on how these coins values change over time because here's so I mentioned before one thing that I understand is the the enthusiasm that this could somehow fund a creator's career right because you know being in this space I know how hard it is to make money from an audience and also just like really care about creators and wanna see them succeed so I get I get the enthusiasm for sure for anybody creating like or sorry continuing through the white paper one of the things that 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 right 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 it has which means two things 1 this isn't really based on reputation it's based on I guess supply and 2 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 wanna talk about 2 situations in particular 1 is what it takes to make about a $100 on this as a creator now there are different ways to do this 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 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 a 100 coins you automatically get 10 of them and that's one way to do this the other way is to set it to 0 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 2 important thing or one important thing to know about this is that and for whatever reason this isn't widely discussed creators they they only get paid on net coin sales what that means is that if I come and buy a 100 coins and then sell a 100 coins you actually don't get any if you have your even you know 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 time frame 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 0 so there 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 I think is interesting so if you let's say you set your percentage to 10% alright based on the economics of the coin if you wanna make a $100,000 then that means you have to have a 132 coins sold at that.

Ethan Brooks

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 this is exciting on the surface, right? That you could make **$100** from people speculating on that. But I think there's a question here: If you can get people to spend **$339,000** on you, are you capitalizing at the highest possible rate? Is there a better way for you to capture more of that directly from your supporters than to allow them...?

Steph Smith

without risking your reputation as

Ethan Brooks

a way to allow them to bet on you exactly that's what I'm thinking of right now

Steph Smith

yeah I think a couple thoughts there is just you're right that right now in 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 the their incredible growth hack right gotta give them kudos such a great growth hack of preceding the platform although partially illegal in what they did we should say partially legal 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 this these incentive structures where as a creator think about like as a creator today ask yourself a question like would I shall 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 because 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 it 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 there is something really important here that it's different if big cloud 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 if you're creating 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 where I think this does differentiate between something like a twitter right and something where there's actual financial incentives

Ethan Brooks

For sure. 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. They are the ones you have to take care of the most, right? So, it's this very complicated scenario where the people 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.

Steph Smith

Now, what's going on? Super quickly, can you give the analogy of the ICOs? Because that's basically what it is. This thing has been positioned in so many different ways, and that's partially because it's still kind of half-baked. Things are being worked out, and it may evolve into other things. But at least as 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.

Ethan Brooks

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 I don't have a kid, but like...

Steph Smith

you got it

Ethan Brooks

no when kids get in trouble

Steph Smith

like them right

Ethan Brooks

yeah you're like oh you're in so much trouble but I get it as well

Steph Smith

like nice job buddy

Ethan Brooks

You know, yeah, I don't... so 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. They did this by scraping Twitter and creating an account for the top 15,000 people. Now, they've created these 15,000 ICOs and are basically just trying to get people to buy into them. I think anybody who's thinking of getting into this, either as a creator or an investor, should ask themselves: 1. As a creator, would I create an ICO for myself? If the answer is no, then think twice about your ICO.

Steph Smith

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

Ethan Brooks

Yeah, and then similarly, as a backer, would I buy so-and-so's ICO? It starts to kind of break down because when you think about this as betting on somebody's reputation, that's one thing. You're like, "Oh, okay, well, you know, somebody like Kim Kardashian, 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. There's potential there, but let's not mince words about what it is. These aren't 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? 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." Right? Okay, so if you've gotten yourself to the...

Ethan Brooks

Where you have $100,000 in value, in order to get any money from that, you now have to sell your coins. If your coin is trading at $7,600, which it will be—that's a concrete number and 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 at the 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. The value of your coin will go down by 10%. So here's where this becomes a dangerous thing, I think. If this actually takes off as a legitimate way to gauge somebody's reputation, what happens when you want to pull your value out? 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. It seems like something that creators should at least be thinking about, right? Because there are better ways to make $100,000, or at least there's other ways to make $100,000.

Steph Smith

Yeah, there was a tweet in response to some of the conversation that was happening. 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. There are 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 has a cost. In this case, part of that cost is your reputation if it's your own coin. And I'm not just talking about the philosophical reputation. But if you pumped and bought 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, is in the same way that there's a bonding curve—this is a genuine question; I don't know the answer. In the same way, there's a bonding curve where 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? Yep, okay. And is it also that same exponential relationship? The reason I'm asking is 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.

Ethan Brooks

Yeah, so 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, "Buying creates coins while pushing the price up and locking money into the profile. Selling destroys coins while pushing the price down and unlocking money from the profile." Okay, 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 on to 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's like a no.

Steph Smith

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 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 the 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%.

Ethan Brooks

You're absolutely right. So, I've got the chart here, and just to give you an idea: if you're at 132 coins, which is about what you'd need to make $100 as a creator based on today's prices, your coin would be selling for $7,600. If you then sell 13 of those in order to capture your money, 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%.

Steph Smith

right exactly yeah so I mean one 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 wanna 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 2 but just remember like right now the the door is closed you can't exit so the price is only gonna go up right now right people know this but that's something really important to to keep in mind in addition you have all these people who they've incentivized by preceding their accounts who are now sharing it with the platform but it's early days right so you don't have the 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 their 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 there's a reason to speculate on it potentially but just keep in mind that the structure that it is today is 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 these short the short term is 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 come out coming out and some creator you know just told their 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 we finally see what that 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 15 k but someone decided so outside of the 15 k you can just create an account and someone I guess impersonated me right they they took my stuff with bio handle they put my picture in the same bio from my twitter 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 and you know to their credit big cloud 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 to another person's account as well but there was not much but 1,000 of dollars worth of big cloud at least in theory within this this coin what happened to it right we haven't even seen what happens to these systems because we we're 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

Ethan Brooks

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 about—the gearing. Also, in small part, because of the network effects of the way it was launched. A lot of the people who are on this platform know each other; they're all friends. 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?

Steph Smith

everyone's happy when they're making money until they aren't right

Ethan Brooks

yeah exactly and the other interesting thing is that this is okay it's worth it's worth discussing this by the way we don't wanna turn this into like a hate fest so after totally we we wanna get into some of the the the legitimate uses and like where we 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 this is not geared towards your happiness like we there's a so there's already an example of of this playing out once once you open yourself up to be bet on by the world the only incentive is for people to make money they they they may like some may buy your coin in order to support you or 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 kind of a funny version of this play out recently where ryan beagleman was on the 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 bitcloud and so he was the one who was kinda brought on as like one of the one of the experts on this to talk about it and while he was on there like so ryan and sean are bullish sam was a little late to the party and he was kind of he was asking questions and he wasn't really sold on it and ryan was kinda trying to stir the pot a little bit like he was he was trying to get sam to take on austin from the 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 like first of all sam said something which was small but I think important which is like he just said I don't wanna do that he's like I've made my money man like I don't wanna take on this competition now and like like you know 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 right so in this case it was a it was like an example of friends just kind of bantering but what happens all of a sudden when larger money moves in and and has the exact same incentives they're they don't 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

Steph Smith

I was just going to quickly add on to this idea that, right now, the platform is benefiting from people with large audiences. These people have money. If anything, the thing that they want to retain is their reputation and how they're viewed in the world. They already have enough money to last them a lifetime. 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 need this." 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 already incentives on certain other platforms, but additional, more concrete incentives to take someone down or manipulate their reputation, both positively or negatively? They're just going to be like, "I don't need this."

Ethan Brooks

for sure

Steph Smith

These people already pay tons of money to be seen positively in different ways. Whether it's buying art, wearing certain things, being on certain shows, or hanging around with certain people, I think they're just going to say, "This doesn't make sense for me." That is BigCloud's ability to, at least today, grow. I think that's actually going to reverse at some point when people start to say, "I don't want this anymore."

Ethan Brooks

For sure, it's like their genius is also their downfall in that they conscripted 15,000 of the most influential people in the world in the beginning. It's like you could not have a better marketing team out there, right? But you also couldn't have a worse enemy. As soon as, 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. 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. You know, in five years from now, we won't be talking about Bitcloud 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. By the way, 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...

Steph Smith

We're ready to be wrong here. This is certainly not a black or white issue; this is absolutely going to happen. It's more so us being like, "Have people thought of this?" Maybe they have, and maybe they're just like, "We're cool with this," 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 what incentives exist or will exist given this structure and how that will evolve over time. I just really think, to your point, that their excellent marketing is also just not going to work over time. In fact, it's actually going to reverse in some way. The people who grew the platform are going to be 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."

Ethan Brooks

So, let me ask you a question then. 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 gonna make this not just like a hate fest on BitCloud?"

Steph Smith

because we

Ethan Brooks

Have some legitimate ideas here. Okay, so I have a question: 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?

Steph Smith

Yeah, it's a great question, and I totally agree with you. If people are listening, 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 going to, at least at first, be half-baked. On one side of the spectrum, you're talking about putting up a GIF online, which is just for fun. Who cares if it's half-baked? It's not hurting anyone. Then maybe on the other end, you've got something like a vaccine, where it's just like, "This cannot be half-baked." If you're injecting this into someone, this matters. Do not mess it up. This isn't somewhere in between, and the reason that I think it skews more towards getting this right is because people's reputations are all they have. 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: 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, whether you want to deny it or not, 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, a little more baked. So to your...

Steph Smith

I think there are ways that if Bitcloud could evolve and be less half-baked in certain areas, there's something here. Although, I don't think it looks quite like Bitcloud does today. Some of the things are that I think this idea of trading on people's reputations, if you're going to do it, needs to be regulated in some way. I'm not talking about the SEC or something like that, but it needs to be opt-in, right? Fully opt-in. Right now, they're seeding 15,000 people—an incredible growth hack, borderline or maybe fully illegal. So that needs to be opt-in only, and you should need to be able to verify that this person is who they say they are. On top of that, there need to be very clear outlines of what happens if this person no longer wants to participate. I do think that's a very likely scenario for some people, at least. The second point is that you could keep it as this vague, amorphous thing like reputation, but I think that starts to falter. It's hard to understand what that is, and maybe that's okay. What I do think makes sense is that right now they have this kind of amorphous idea of reputation. Is it your betting on posts? Can creators pick and choose what they get? If that's the case, then the marketplace itself should be very clear about what people are getting with a certain coin. Right now, it's nothing. But if you're going to create it, then maybe certain creators have more of an incentive. Maybe certain creators do have the ability to have one-on-one conversations with their audience. But then you start to get more into things that exist, like Patreon or Substack, just that happen to be built on the blockchain. So, that's important—just clear terms that don't exist today, and I think they should. The third point is just transparent marketing. I think most people have caught on to this idea at this point.

Steph Smith

That Bitcloud is not, or I should say, crater points 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. In certain circumstances, you saw certain things like this happen at the beginning of Twitter, 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 gotta be more clear. You can't have people saying this is a stock market for creators when that's confusing and misleading for people in understanding what they're actually buying.

Ethan Brooks

For sure, I totally agree. If you were to ask me what it would take for me to be pro Bitcloud, I would say it has to be opt-in. It 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 hey, you do you. You know, if this seems like a fun way or...

Steph Smith

exactly

Ethan Brooks

That's fine, but it's gotta be opt-in and it's gotta be controlled. Right now, everybody has... if you are making your money online or if you have an online presence at all, which is, you know, most of the world at this point, you now have to protect against this because it's not opt-in; it is opt-out.

Steph Smith

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, you should just create your own Bitcloud so that you can let your audience know, 'Hey, this is me, not this one.'" I don't want to do that. I shouldn't have to. And again, if people want to participate, go participate. This is not a conversation about 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."

Ethan Brooks

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. At this point, and again, I'm nobody. I have a tiny, tiny audience and I'm 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 to issue a token or what, but charge to do reputation management. This would essentially 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, you know, 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, 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. Therefore, there is some kind of opportunity here for law firms to get involved, which I thought I'd call out. And then to your...

Ethan Brooks

Like, this shouldn't be something that people have to opt into in order to protect themselves. 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. The founders have got to have some skin in the game. Here's the thing: that's one of the things that's crazy to me. This platform was built by a pseudonymous founder. So, you know, 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 like, 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..." There's a Twitter account that's now trolling BitCloud. So, 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 kind of protect against this and getting a dose of, you know, 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 that BitCloud 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.

Steph Smith

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 some of these concepts and some people you know 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 1 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 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 in cryptocurrency and I 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 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 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 gotta be an entity that is responsible for that and so I agree that again like I just I 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 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 the same way that all these other platforms are responsible for the things happening on their platform this should also be true

Ethan Brooks

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

Steph Smith

I have no idea I think we had quickly comment on the fact that if people don't know already there is a lot of money going into bit bitcloud and not just from the from the like retail investor perspective but from specific large vc funds so sequoia I should actually look this up but I know sequoia andreessen I think chamath has pub publicly said that he has invested in 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 bitcloud they expect it to fail actually right 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 per times 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 gonna realize that betting on people's reputations doesn't make sense so I think what you're ultimately gonna see I think is the evolution of this into something very similar to one of the platforms that exist today if they really focus on the social aspect they'll end up being a twitter clone if they really focus on this like transfer value between creators and and their their audience it's gonna 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 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 gonna see bitcloud pivot in some way after they make their initial feature adjustments and it's gonna 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 bitcloud forever will be terrible or even that it's terrible today but just the long term view of its current trajectory has some very serious questions

Ethan Brooks

that's a great way of putting it yeah and to to piggyback on something you mentioned with the investment I think there's 2 things worth calling out for anybody who hasn't looked closely at this yet and again I 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 like we're I I would I would also give one more disclaimer which is like 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 right somebody's willing to come forward and discuss some of these potential questions by all means I'm not this is not meant to be a takedown this is just some of the things that are like occurring to me and if there's legitimate plans in place to to curb them then we wanna hear about it so that's the case in in terms of the initial investment there are some things that are worth calling out so as you mentioned vcs are getting into this like one question that steph and I both asked many times is what are we missing right 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 there a lot of these people are just taking a lot of bets also financially speaking if you look at the way the value of bitcloud scales you'd kinda have to be insane as a vc not to get involved in this so here's the deal if you read the the one pager the the value of the bitcloud currency the the base currency on which this entire model is built it doubles with every 1,000,000 coins that are sold if you do the math again I might be doing this wrong but according to this tracker that like tracks the size of the website right now it's about a $172,000,000 worth of money that's tied up in creator accounts okay so that means it's a 172,000,000 us dollars that people have so far actually used to buy creator coins if you divide that the current cost of bitcloud is a $149 so if that 172 represents all of the money that's currently on the platform that means there's about a1000000 of these bitcloud coins that have been created 1,100,000 so long story short there's a 1,000,000 coins I could even be wrong maybe maybe that's only 50% of the value let's say I'm 50% wrong and there's 2,000,000 coins the value of this coin goes up it doubles every time another 1000000 coins is sold and the company says in their white paper that they're expecting about 10 to 19,000,000 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 10,000,000 coins and there's currently say 2,000,000 in existence that means there's gonna be 7 more doublings of the value of a bitclout coin which could be huge potential upside for anybody who invested early your money your money will literally double 7 times I hate to say that because it sounds like it's this is not investment advice alright okay now let's look at why the vc firms may have gotten involved right maybe they really believe in this but if you do the math out there were 2,000,000 coins that were set aside pre prelaunch for the founders and the investors which is a potential value of $534,000,000,000 by the time 10,000,000 of these coins have been issued you know what steph maybe I should just share my screen real fast talk do you think I should share my screen talk to you this real quick or no is this making sense

Steph Smith

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 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 you 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 and and similar with creative coins your upside is even more lucrative right and that's what I think you're getting at as 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 in this there's 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 in in austin so that's really important just always ask yourself what are what are the incentives of someone sharing this and here I think that you know we talked about the the growth hack and these incentives and this platform in 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 and in this case in the way that the incentives are structured it really does make me question you know is it is it really just because people have been incentivized in this way it's just something to be aware of right sure

Ethan Brooks

yeah yeah so these these you know 2,000,000 coins were set aside in the beginning for these investors at this. Right now today if they can pull that money back out based on the price of bitcloud right now that's worth $300,000,000 and if it continues to grow up to the 10 1,000,000 coins that they expect to issue the you know the value of 2,000,000 coins will be somewhere in the nature of $534,000,000,000 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 launch this is extremely dubious right so it's possible that the investors bought in in order to protect themselves because like this is another thing that can happen right 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 like a pretty significant chunk of your own coin if you have the resources and would 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 if they really believe in the idea or if they did it as like a potential protection against you know future downside that just happens to come with enormous potential upside I I don't judge like 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 $1,000,000,000 into 1,000,000,000 and 1,000,000,000 of dollars is literally why they exist so 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 kinda 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 gonna happen here's what I think is gonna happen similar to what you're saying I I I actually don't think this platform will disappear forever I think the people behind it and the like 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 I I don't necessarily think that's gonna 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 gonna happen I think all the prices are gonna continue to run up for the next couple of months while people get involved then at some.

Ethan Brooks

They're gonna 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 gonna start to see people migrate back off of this and it's the platform's gonna 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 right but also once that upshot stabilizes and like 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 and they're gonna have to in order to survive but 5 years from now I don't think we're gonna be talking about a stock market for people I 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 etcetera anywhere as well thus in some sense bitcoin 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 I don't think most like rigorous thinkers look at the idea of trading on people's reputations as like 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 kind of 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 like a lot of people are gonna get hurt in the meantime I think in terms of the financial incentives here

Steph Smith

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 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 when you're dealing with people's money is that today bigclout has a little trouble iterating in the way that something like twitter would because twitter can just you know there's no 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 this the way that big cloud runs today and it's gonna be hard to pivot it as I was saying I do actually think there's there's merit to this idea where you can have your own coin with 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 would should say the 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 big cloud has launched and it's gonna 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 you know I just think that's it's gonna be interesting to watch for sure but I guess the 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 like big cloud is is binary bad or good or anything like that but if you're gonna participate whether you're a creator yourself and you wanna you know create your own coin or you wanna speculate do what you wanna do right obviously this is not financial advice there's no judgment here but think through past today and what what it exists as and what this may look like and if you really wanna participate in that or not even from an ethical perspective but like where 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 alright 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 gonna go

Ethan Brooks

I like that a lot. Then, the last thing that comes to mind for me is that I think it's Charlie Munger and Warren Buffett who are both big on this concept: how trust is your only long-term asset. If people think more about that, they'll make different decisions than if they 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.

Steph Smith

alright see you