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How many bitcoins are you worth? This dark social network is the latest craze in Silicon Valley

When you get to BitClout the first thing you see is a big sign: “The crypto social network”. Under that tagline, a join button and a short introduction: “Everyone gets their own coin. Your favorite creator has a coin that you can buy or sell. The price goes up as more people buy. You can also have your own currency. “As if that were not enough, the page ends with a list in which people like Elon Musk, Justin Bieber or Ariana Grande appear, and their price, implying that they are already part of this network ‘ crypto. ” Up to then, nothing may catch your attention if we think about the madness generated around the ‘blockchain’, but we must add a small detail: none of those great creators is part of the platform, nor has they given permission to that use your image or trade under your name.

The name of this social network began to resonate on the internet a few days ago, when the web took its first steps supported by numerous Silicon Valley funds. Overnight great ‘influencers’ from the ‘crypto’ community, and not ‘crypto’, they realized that something was wrong: someone had created profiles on their behalf, and they were trading with them. Without authorization or anything like that, they were trading on a kind of secondary market within BitClout, and, to top it all, the platform (decentralized and no parent company behind in theory) offered them the option to claim it, but they would only receive a part of the money invested in them, and if they wanted to complain to the company they would have to pay. Something so bizarre that it has already generated even an international conflict, with the Prime Minister of Singapore, Lee Hsien Loong, one of those profiles who had started trading without knowing it, demanding that his name be erased and that the people of his country flee from it .

Photo: Cryptocurrency.  (Pixabay)
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Everything may sound quite crazy, and the spiral in which the platform is stuck invites that thought, but the operation of the ‘app’ is much simpler. The idea of ​​BitClout is that anyone who wants, following the current of the so-called ‘creator economy’ (which is succeeding with sites like Patreon, Twitch or Substack) can have, using ‘blockchain’ technology, their own ‘ token ‘, and that the rest of the people who are in the same network, can bet on it, giving a monetary value to that user. Inspired by Twitter, if you are a good creator, and you generate a great reputation, you will get more people interested in buying your ‘tokens’ and therefore more expensive they will be. So whoever has bet on you in your beginnings at lower prices will be able to make a profit. But soon the seams begin to show.

The first thing is that to get those ‘tokens’ you have to exchange your bitcoins for the platform’s own currency, what’s more, if you do not have a single of its cryptocurrencies you will not be able to use the system. Once inside you will have to use ‘the BitClouts’ to buy the currency of the ‘influencer’ you want, but also to make inquiries to support. To encourage the purchase of those personal ‘tokens’, the web offers you different attractions, such as being able to write private messages to the profile you are betting on, having exclusive accesses, content only for ‘patrons’ … But in the end all your profit depends on speculation about the reputation of a user And not only that, it is that, at least to this day, there is no way to convert those currencies back, even if you make a profit.

As the expert lawyer in digital law, Sergio Carrasco, who has written an article about the legal gaps of the platform, explains, the network has numerous black spots, and what is most striking is that behind the idea are people like Sequoia Capital, Andreessen Horowitz, Chamath Palihapitiya’s Social Capital, Coinbase Ventures, Winklevoss Capital, or Reddit co-founder Alexis Ohanian. Several of them have already shown their support after the criticism, but the problem is far from solved. In addition to the Singaporean Prime Minister, other celebrities such as Preston Byrne or Brandon Curtis have also announced legal actions against the network, and their day to day is plagued with scandals.

Is it legal?

The great question that remains in the environment is to what extent something like this is legal. The network can be, and the regulatory holes that exist around cryptocurrencies help these projects to grow within without many barriers, but experts like Carrasco point in other directions. Especially in the use of profiles of people who are not registered on the platform. “As soon as you enter the web you see that there is a list of the most ‘expensive’ profiles and people like Elon Musk appear. But Elon Musk is not present on the network, he does not have an account, only that they have created one for him and They say it’s reserved, “he explains.

BitClout creators collected by ‘scraping’ method, the 15,000 most influential Twitter profiles in the field of cryptocurrencies, and they added some more like Katy Perry or Justin Bieber. From there they dumped them in their system and that is why you can see users like Elon Musk with the same data that he shows on the bird’s network. “They are using the image of a person for their own benefit without having any permission from that person. In the Spanish case we have Organic Law 1/1982, of May 5, on civil protection of the right to honor, personal privacy and family and the image itself. This Law could fit into the use that is being made of the name and image of public figures without authorization and with a clear profit motive. In other countries we can find similar applicable regulations. There will be those who do not report and choose to enter the network, claim the profile and keep the money, but still be something quite controversial, “says the lawyer in conversation with Teknautas.

In addition, he points out another important point: those profiles appear in the first line of the web so they could be using a deceptive image to attract people to his platform and buy his cryptocurrencies. Something that would aggravate what happened. Not to mention the use of personal data without any control and the lack of transparency in this regard. “It is that they even force you to buy their coins to be able to ask support to delete your account from your site. That is, the data is downloaded from another network, they are uploaded without your permission or that of the network, and they tell you that the profile is being reserved for you. If you claim it, you take a part of the money that they have already collected for your ‘tokens’, not all, and if you choose to demand that your page be deleted you have to pay. In addition, the one who has already invested in your profile will be left with nothing if you delete the account. It’s all insane, “he says.

The operation of the ‘app’, very similar to Twitter, is used to cover up these practices. If the profile has been claimed or created by a specific person, it has a confirmation ‘tick’, while if it is among those that the platform has created on its own, it is left with a little watch that, according to the company, means that it is reserved waiting for its owner to claim it. Among the ‘scraped’ profiles there are great international figures, but there are also Spanish cases, such as that of the expert lawyer in ‘blockchain’ and cryptocurrencies Cristina Carrascosa. At the time it was shown the price of its coin was $ 486.

An added problem that Carrasco sees is that it is a decentralized platform and that the name of the person behind the idea is not even known. Although some, such as Byrne, have begun to point out Nader Al-Naji, as the founder, the web does not establish it and that can further complicate the persecution of anyone who wants to claim something from the social network. “It will be necessary to see how it evolves and if in the end someone takes responsibility, but that can make it very difficult to do something against the platform or to recover some of its money if the platform suddenly disappears.”

The money trail

Outside of the purely legal, Bitclout has also raised suspicions around what it is doing with the money raised by the company. According to an investigation by the Decrypt medium, the people who are after the social network could be using the money collected so far by users who enter and buy their currency, about $ 160 million in bitcoins, to, on the one hand, buy on the ‘dark web’, and on the other hand to invest in ‘exchanges’ such as Amber Group, Kraken or Coinbase and from there move it to other wallets where the trail is lost. In addition, it must be remembered that even today it is impossible to exchange those BitClout coins for another type of cryptocurrency or FIAT money.

Finally, in the last few hours a new failure in the system has been discovered. According to denounce multiple users on networks like Twitter, its programming leaves a hole that would allow anyone with access to their servers steal all the money from the platform, as it exposes its key. “BitClout uploads its keys to its server on every API request. Any employee with access to that server can steal all the money from the platform at any time.”

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