Notorious billionaire Chamath Palihapitiya’s tweet about BitClout raised a few red flags. Since we at Bitcoinist checked the project’s documentation and explored the possibility of it being a scam, we had to investigate. Is Social Capital’s CEO more involved in BitClout than he’s letting it out to be? Let’s find out.
The tweet in question was this one:
Distributed, open source products only become relevant through developer adoption. Developers are the early adopters AND the viral marketing.
That seems to have started with bitclout and if it continues, is a very asymmetric one-way bet like Bitcoin was in its earliest days. https://t.co/ZwGuwekg9v
— Chamath Palihapitiya (@chamath) April 23, 2021
And the comparison to Bitcoin’s early days irked the community the wrong way. But that’s not what did it. If you check the comments, most people are just informing the billionaire that he’s supporting a scam. Chamath is quoting a series of tweets by Andy Artz, a partner at Social Capital, that talk about the number of developers that are building products over BitClout’s architecture.
One of the critics was Mark Cuban, here’s his take and Chamath’s answer:
The social network is just a proof of concept for the platform. The killer product(s) probably haven’t emerged yet – that’s why I think it’s important to stay focused on the number of open developer projects…and their growth.
— Chamath Palihapitiya (@chamath) April 26, 2021
From a distance, this all seems harmless, but… why are the heads of Social Capital talking about BitClout that much? Especially considering that Andy Artz seems to be very involved in the community, he’s even part of the (we hope) joke band The BitClout Boys. Is he just having fun or is he working?
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Chamath among BitClout’s investors
We dropped the ball on this one. In the section “The case for BitClout being the real deal,” we named a few of the project’s initial high-profile investors, but we missed Social Capital. In Tech Crunch’s article about BitClout, it clearly says investors include, “Chamath Palihapitiya’s Social Capital, Coinbase Ventures, Winklevoss Capital and Reddit co-founder Alexis Ohanian.”
And the billionaire confirmed it in his own “All In” podcast, saying, “A deal was announced. An investment was announced. Andreessen, Sequoia, myself, and a few others, we did this thing called BitClout.” But then, describing it, he distanced himself from the project’s ideation and development:
“In a nutshell, what these guys did was, they said: ok, we’re just going to take this entire blockchain concept, and we’re going to fork it and we’re going to create this thing where folks can essentially have one blockchain, they can have content around it, and then identify sort of people and nodes. And all of a sudden we all have this currency that sits on top of this BitClout currency.
And why that´s interesting is their first app that they built on top of this was basically kind of a clone of Twitter. Just kind of like a proof of concept app.”
Is he just an investor, though?
Social Capital chart | Source: TradingView.com
Bitcoiners think Chamath’s the man behind the curtain
We already talked about Nader Al-Naji, the possible identity of Diamonhands, the project’s creator pseudonym. And also about “the hypocrisy in remaining anonymous, while using all of those influencers’ names, likeness, and profile pictures. Which is a fair point.” However, Al-Naji wouldn’t explain all the high-profile investors that backed BitClout from the get-go. Chamath’s name definitely would.
In fact, in a recent episode of the What Bitcoin Did podcast, Peter McCormack and his guests were talking about Chamath being behind the project as if that’s a fact. After heavily criticizing BitClout, the host said:
“I think there must be like an ego competition within Silicon Valley. I don’t think BitClout is just about making more money. When you’re a billionaire, how much more do you need? I think part of it is an ego about creating the next big thing. Like, Jack Dorsey’s created Square, Twitter, a whole bunch of stuff. Elon Musk’s created SpaceX, and Tesla, and The Boring Company. I’m wondering if he’s thinking more legacy, like, if we get this BitClout thing right it might be a Twitter competitor. We might take down Twi… I might’ve put my line in the sand and done something here. Like, create his legacy. I don’t think he’s in it for the money anymore.”
Considering the beyond aggressive marketing, the monetization without authorization of 15000 profiles, and the admitted premining of the BTCLT token and the Creator Coins, we understand if Chamath decided to remain anonymous. And, since the platform is not as hot as it was a few weeks ago, we get why he put his name behind it to support it.
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We’re perfectly clear that we didn’t prove Chamath’s responsibility beyond the shadow of a doubt. He might not be the mind behind the project. We could explain everything in this report by coincidences, and Chamath could just be an enthusiastic investor… but the whole thing does look suspicious. And remember, Chamath was among the few first celebrities to claim their BitClout account, but he never posted the necessary tweet to do so.
Featured Image by Jakob Rosen on Unsplash - Charts by TradingView