MyFinancialTimes is a reader-centric site. We may receive compensation from the products and services we mention or recommend in this story, but the opinions are the author's own. Remuneration may impact where offers appear. We may not include all available products or offerings. To learn more you can visit our advertising policy and editorial policy.
Social media is critical to the growth of cryptocurrencies. BitClout is one of the newest examples of the crypto-social alliance. As Jordan Belfort wrote in TechCrunch earlier this year, those who sign up to use the platform can deposit bitcoin, and it will be converted to BitClout tokens. Those tokens in turn can be spent on individual creators within the network.
“When a creator gets more popular,” Belfry explains, “it gets more expensive to buy denominations of their coin.” Members of the network are, in effect, betting on each others’ increasing value. In this way, crypto fuels the spread of this particular social network which in turn incentivizes the pursuit of crypto.
Early investors in BitClout included some venture-capital heavy hitters: Sequoia Capital, Andreessen Horowitz, Winklevoss Capital Management, and others. There has been talk for years of a natural alliance between social media and cryptos, and even some talk about how they can “reinvent” one another. The big VC money in BitClout is powerful evidence that the two fields are, indeed, intertwining.
Social Media Has Helped Circulate Information
Two years ago (2019), a survey by forex-broker Alpari found that 60% of Americans don’t know what “cryptocurrency” is. That indicated a lot of potential for growth.
The business-and-finance wing of traditional media has been carrying cryptocurrency content for a long time. Those Americans who didn’t know the word by 2019 likely weren’t consuming news from those sources.
Ripple has played a big role on both sides of this alliance. Ripple, the global real-time payment system, has used Facebook, Twitter, and Reddit to share educational content on crypto. Ripple XRP is the name of a very active Facebook group, and its YouTube channel carries videos on “Move Over Swift, Ripple is Taking Over.”
Yes, much of Ripple’s social media content is, as that example shows, blatantly self-promotional. But blatancy helps promote crypto.
Bitfinex and its Pulse
A quick look at Bitfinex Pulse shows headlines one might not find in traditional media, even in those that do cover cryptos, such as, “Japan to Explore CBDC as it Intensifies Watch over Cryptocurrency.” That headline is a link to a piece in the Coin Republic about the possibility of a central bank digital currency out of Tokyo.
Bitfinex Pulse also features tweet-sized “Whale Alerts,” informing viewers than, for example, 14 million #BUSD has just been transferred “from unknown wallet to #FTX.”
Translation: #BUSD is a stablecoin issued by Binance with a one-to-one ratio to the US dollar. Somebody, some “whale,” has just transferred a lot of it to #FTX, a crypto derivatives exchange. Curious readers can follow a link for further information on that transaction.
How Many Americans Understand Crypto?
Remember that 2019 study that said that 60% of Americans don’t know what crypto is? Well, that number seems to be down.
A survey this spring, by Ascent (The Motley Fool) found that only 24% of Americans say they “don’t understand how cryptocurrency works at all.” Through the two studies are different in their methods and working, the stark difference between the professed ignorance numbers from 2019 and 2021 — from 60% to just 24% — stands out.
The intermeshing of social media and cryptos is far from surprising, and it’s been quite effective. Every few minutes new crypto accounts are popping up on Twitter devoted to Bitcoin and Dogecoin. There are countless enthusiasts and professed experts who want to get their news from alternate sources. They also want to talk to like-minded crypto owners outside of a formal setting. Not all the conversations emerging are positive, but most of them are innocuous. Above all else, they’re creating forums for those who want to talk, and talk some more.