In this BitClout guide, we've teamed up with creator and community member Addanus to help new and inexperienced BitClout users understand Creator Coins better. He shares his own experiences learning how to use the platform and his reasoning for why it's better to invest in Creator Coins than to hold onto BitClout.
What are Creator Coins? The Creator Coin (CC) is one of the many things that makes BitClout so revolutionary for social media. A user's Creator Coin is the monetary value, usually denoted in USD, attached to every BitClout profile.
Users can buy and sell each other's Creator Coins, decreasing or increasing the value based on how much $BitClout currency is locked into each account. You might want to support another creator's music or photography business, or maybe you just think they're awesome and will be huge one day. Either way, you can buy the CC directly, without giving corporations like Spotify or Instagram a cut.
Every BitClout profile has a Founder Reward (FR) that the creator can set between 0-100%. The FR number determines what proportion of buyer's investment into the Creator Coin will be paid to the account holder.
Check out BitClout Pulse's Onboarding Document if you haven't already for more information about CCs, FR, and a step-by-step guide to setting up your profile.
Read on for a brief introduction by Addanus, as well as his perspectives on why new users should invest in Creator Coins, especially their own.
Beginning on BitClout
I found BitClout through the swamp that is Twitter. At the time I was already disappointed in the minimal return on investment I got after tons of energy put into brand and network building on that platform. Not just there, but also other Web 2.0 social networks where you have to be an "influencer" and get brands to pay you to shill their stuff.
Once I joined BitClout, it didn't take long to see its potential. I found an awesome community that seemed committed to building the ecosystem and supporting each other.
After posting and trying out different features, I realized that "BitClout is the Internet of Social!" The platform could unlock what many were already calling Web 3.0. It's a foundation that allows any Web 2.0 property to be reimagined and reborn, with built-in monetization on almost every activity.
If you want to build a version of Amazon/Netflix/Facebook/Twitter for Bitclout, you can! Best of all, the incentives align with the community - instead of with corporations.
For example, if I use the Netflix of BitClout (which I'm certain will show up), I pay a small amount through transaction fees: watching, liking, and sharing shows. I can also invest in the Creator Coin of the project, in the developers behind the project, in content producers, actors, writers, animators, sound engineers, etc.
Anyway, while I learned the ropes of BitClout, I adopted a cautious investment strategy, pinching pennies and investing in other accounts I could confirm were legit. I didn't transfer any cash or Bitcoin at first so that's all I could afford. Now that I'm all in, I'm more liberal with my investments in and donations to other creators, but that brings me to a big question - one that is especially important for new users:
Which one should I HODL - BitClout or Creator Coin?
The Case for Creator Coins
Creator Coins are pegged to the BitClout price, so as that increases, so do the CCs. I can invest in either one... or both. One big advantage of investing in CCs instead of holding BitClout exclusively is that if the value of a profile I invested in goes up, maybe because that creator is producing some awesome NFTs, I get the benefits of that, on top of any added value I get from the rise of the $Clout token itself.
Of course, we need to keep in mind that some creator coins will not appreciate. For example: let's say I buy $1 worth of an account with a low coin price and they don't do anything - or worse, they "rugpull," meaning they wait for their profile value to rise before selling all the coins they held. The result is my $1 becomes worth $0.00001 or less! Multiply that by any value of BitClout in 10 years and it's still going to be worthless.
Another thing we should note is it's much harder to get value when investing in high-priced accounts. First of all, big profiles like Chamath or Elon Musk are in many cases inactive. More importantly, the CC prices of these accounts are already so high that $1 - or even $100 - won't make a dent. The reason is that the "bonding curve," the mathematical model behind the calculation of prices, dictates that coins get more expensive the higher their value. Therefore it takes a huge investment to move the needle on an already-inflated profile. Besides, I can afford many $10 coins and not so many high priced coins.
One quick example showing how much difference a small investment can make is my own profile, @Addanus. These screens are from BitCloutPulse.com.
As you can see, my CC price made two large jumps since I became active with this profile. First, I raised the price of one Addanus Coin from less than $40 to nearly $280 by buying around $2300 of it with BitClout.
After an investor sold a large amount of my Coin, bringing the price down to around $160, its price was stable for some time, until BitClout Pulse itself made a $1000 investment in my coin, bringing it up to approximately $260.
Similar amounts invested in accounts like @elonmusk would buy a fraction of his CC. I wouldn't expect any significant ROI on it, either, since it would take tens of thousands of dollars invested by other users to raise the coin price substantively.
Believe in Yourself!
So far, we've established three general guidelines for Creator Coin. First, it's better to invest in Creator Coins than to hold onto BitClout in many cases. Second, you can increase CC value by a greater magnitude when the initial coin value is low. And finally, BitClout's innovative nature lies in enabling you to invest in people or projects you believe in without giving corporations a cut.
If these three things are true, then it should make perfect sense when I say I believe you should invest in yourself! Buying your own Creator Coin at 100% FR - so that no one else can sneak in and raise your price before you invest - is a good way to get your account off to a good start.
With all that said, I believe there will be more value generated from virtual (and physical) assets developed for Bitclout than from any activity involving Creator Coins (or even Bitclout itself). Using myself and my project as examples... I invested a lot in @Addanus and in @cloutini (about the same amount probably). However @Addanus is worth much less than @cloutini and I haven't even monetized it yet.
That difference represents another key lesson for all of us: that BitClout investors are generally more willing to invest in project CCs than they are on the people behind these projects. I've seen the same thing happen with @bitcloutpulse, @bithunt and, and more.
So, maybe we should all be building products and investing in projects... instead of getting stuck on whether holding BitClout is a better investment than locking it into Creator Coins!
Disclaimer All statements are based on my understanding of BitClout. I am a coder and community member; I am not affiliated with the founding or core BitClout team. This is not financial advice. Do your own research before interacting with or investing in BitClout, Creator Coins or any BitClout related services.