Major crypto exchange Coinbase CEO Brian Armstrong is taking a lot of flak today for his open support of controversial blockchain-based social network BitClout (CLOUT). While another crypto giant, Blockchain.com announced they’ll start supporting CLOUT trading this week.
Both companies have indirectly invested in this social crypto exchange where users are selling and buying social coins representing the identities of people whose profiles are there, which are based on these people’s reputations.
“Just setting up my my bitclout,” tweeted Armstrong today, accompanied with ‘diamond hands’ emojis. (Notably, BitClout’s creator is said to go by the name Diamondhands.) By tweeting it, the CEO claimed his BitClout profile.
On his BitClout account, the CEO wrote: “This is great – crypto native Twitter. Economically aligned, perhaps we can all be a bit more civil.”
He was welcomed there by Balaji Srinivasan, the ex-chief technology officer of Coinbase.
Meanwhile, Peter Smith, CEO and Co-founder of Blockchain.com, said that they are “excited to provide exclusive access to buy and sell $CLOUT to Blockchain.com users, not just because it’s a popular crypto project but because it also demonstrates that architects, developers, and builders can create consumer products with crypto protocols.”
Per Smith, BitClout is a fully open-source, decentralized project with no company behind it — it’s just coins and code. “This means every creator has a direct relationship with their followers, which unlocks new ways to engage and monetize that aren’t based on ads,” he said.
In either case, as reported, BitClout is one of the most controversial projects this year. Several problems there soon arose, including that profiles of 15,000 people had been scrapped from Twitter and pre-loaded into the platform without people’s knowledge or permission, and that users need to convert their bitcoin (BTC) to BitClout, but without an apparent way to trade it back. Some promptly asked for their BitClout profiles to be erased, and even a cease-and-desist letter to the alleged creator of the social network, Nader Al-Naji, was sent.
However, besides Blockchain.com and Coinbase, the project is also backed by high-profile investors, such as Sequoia, a16z, Social Capital, DCG, Pantera, Huobi, Winklevoss Capital, North Island Ventures, and others.
Also, in his late May post, Armstrong wrote that the distribution of Coinbase’s content in the future is “likely move to more crypto native platforms, like Bitclout, or crypto oracles.”
Meanwhile, according to a late April announcement, BitClout developers are working to integrate the project’s Exchange API with Coinbase’s open standard Rosetta.
Per some commenters, while Armstrong “refuses” to speak of Bitcoin, he supports “sketchy altcoins” to hundreds of thousands of his followers on Twitter, with others adding that his business requires people trading “a ton of shitcoins,” suggesting it makes sense the CEO would pump them.
Many are still questioning the ‘decentralization’ aspect of the project.
Meanwhile, to see just how hot of a topic BitClout is, one needs only look at amount of fire the prominent bitcoiner Robert Breedlove has been put under for saying that he’d “be taking a look at it over the next week” – with many interpreting it as giving the project his support. Some even jokingly commented that Breedlove’s Twitter account must’ve gotten hacked.
His profile is reserved for him, but Breedlove hasn’t claimed it (yet).
He also denied promoting the project, or being payed to post about it.