DeSo BitClout Primer

DeSo BitClout Primer

By Rekt | Trader Commentator | 30 Nov 2021


 

Hey guys. So I saw a good amount of discussion on Twitter, about how Ethereum or various blockchains would be particularly good for a social network. And I think there was a lack of understanding about how scalability issues particularly affect a lot of these blockchains. And one of the projects that I've been keeping my eye on and reporting on for the last nine months has been bit cloud and.

Now it's going under the name, decentralized social DeSo, and BitClout is one of the nodes. You know, the first node that was really public facing. But I think having a keen understanding of how big cloud works and how DSO works is a good lens into what could be like a web three community that really scales in the way that, um, the web today.

So as it stands, now we have platforms like Twitter, Facebook, Instagram, and. These are monopolies for your content data, and they're centralized gatekeepers that have access to your data. And really you're in essence, an unpaid intern to these platforms by providing photos, you know, your wedding photos, kids' photos, news, that's relevant to you and your family and your coworkers.

And they're bringing. You know, your news is bringing people to these platforms to consume this content that you're providing. And then for the service of bringing you there and, you know, amalgamating all of this in a closed network, they're putting on ads and they're doing an ad model that they benefit 100% from.

So this model of web two is. Exceptionally good if you're an investor in these companies, but if you're a content creator or you're someone that's trying to write or carve out a living for yourself, it's the exact opposite of good. And these networks, these web two properties really are built in a closed way in order to capture all the profits for themselves.

And. The limited interoperability between these platforms is by design. It's difficult to schedule a post for something that goes off on Instagram and then one that goes on, you know, steam it, and then, uh, on Twitter or. You know, for something that's, multi-platform, you're an Anita tool like Hootsuite or something that is able to get into the API.

And then a lot of times, if you even want access to be able to schedule a post or something, you need to go into request an API permission from these platforms. So it's a huge headache. And a lot of these platforms understand that's the case. And they're providing that friction layer. Cause it's like, well, Why don't you just make it easier on yourself and, you know, death by a thousand cuts, just stay on our platform, post all of your stuff on our platform.

And don't worry about all the other, all the other platforms. And that's in essence what the push is, but you as a contrarian Korean, If you're not getting paid anything for being up there besides sending them to a merge website, you know, the, sell something on Etsy with your face on it, or all of these antiquated ways to generate money from a following, then they're not really doing any, any favors.

And one of the platforms that I thought was innovative in this way, in terms of thinking through use cases that could benefit creators. Was bit cloud. And when it came out nine months ago, there was whole lot of misinformation out there. You had channels that ordinarily do great watchdog work that we're going after it, because there was a confusion out there.

The traditional media was reporting that you can profit off of someone's name with. Them doing anything about it and people, I don't think really understood what the technology was or blockchain technology for that matter. So they thought, well, someone's making money off my name. How do I take down my account and what I found out and what a lot of people found out when we'd read into the big cloud documents is that really, this is reserving these profiles, so they don't get cyberspace.

And yes, you can buy into them, but you're really just speculating on the potentiality of one of these influencers coming into the platform and using it in a meaningful way. And that could happen or that could not happen. And so you see a lot of these platforms that are these profiles that, you know, would get eventually used.

And then when they jump in there and get used, then they have a huge incentive to use the platform because, oh my gosh, my tokens are worth a thousand dollars. And people are excited about me coming on the platform. So why don't I just push a lot of my content here and that I think was the push much more than.

Suing the company behind it. And I think that the office location of Nadir at the beginning was to keep it like a Satoshi Nakamoto type style to make the key focus, being the protocol and the platform as opposed to an individual. And I think that was intelligent in terms of having the technology be the discussion in terms of.

You know, what's interesting here with the use case as opposed to an individual and what's their resume and what's their background. Um, although I think in the case of the diesel platform, the case on that is very strong. So Chamath, Palihapitiya came out with some positive words because he invested into the platform with the social capital project or.

And then I did a trilogy of videos that really just went into how it works, what they raised from venture partners and how this isn't going away anytime soon. Or they have some of the best lawyers in ecosystem. They have some investor VCs on Sandhill road and in San Francisco and, uh, all of the web three facing venture companies essentially.

Later. So I was really bullish and I was bullish about the way that he was doing it in a way that wasn't like a cash grab. Like a lot of ICO companies are watching companies that are trying to cash out and leave. So DSO comes down to three nodes, no three I'm focusing. I would say that are all backed by notes.

So social tokens and a social token is just a cryptocurrency, a token linked to your profile and people can buy it on your profile page. They can follow you. And it imagine a. But that they can buy a portion of your profile. And as you do more things, people can see. Well, that was a great post who posted it.

Oh well, they're greening. They've created a lot of great posts. Maybe I'll buy their token to speculate on. They're going to continue to, to great, to make great posts of this elk. So there's some speculation on there that let's say you're a great writer about blockchain projects and you go on there and you don't have.

Let's say a rich history of writing for coin Telegraph, but you're really good at writing on medium and someone reads one of your articles and they're like, man, that's really nuanced look of this particular project. And so they're like, well, how can I benefit this person? You know, you could tip. Uh, you can buy one of their NFTs.

If they have one that's relevant to their reporting, or you can just buy their social token. And when you buy their social token, a lot of times they'll get a royalty percentage of that, which they can sell to fund their work or the research. And in the process, you're able to hold onto a token. That gives you a stakeholder and their success on the platform.

So you win, they win. And it's an innovative way of bootstrapping or accelerating, like being a sort of micro angel investor for these profiles. And on Twitter, I would say the majority. Of profiles are anonymous. You know, they haven't board a yacht club as the profile picture, but on diesel, I see a lot of actual people and no link to their LinkedIn, which is exceptionally rare on Twitter or other social media places.

And the discussions are by and large civil because. If there's a person behind it, the civil discussion stays at the forefront because I think people will say something different to your face. Or if they know there's a real person on the other end of the line and they could experience some sort of blow back.

And that leads to more thoughtful, involved discussions as opposed to a troll coming in and devolving the conversation to the lowest common denominator. So you have social NFTs too. You can create these innovative pieces of art. And instead of having to go to open sea and pay the gas fees associated with collecting someone's work.

You can mint it on the diesel blockchain for a fraction of a penny and buy it for a fraction of a penny and resell right away, if you want to. And you're not going to get that two and a half percent that they take on open seat. And for the longest time on an open seat, you couldn't mint or you couldn't sell something without paying gas costs.

So you needed to pay to mint it. Now they have lazy minting where you can do that for free. You can just upload the video or the audio or the image. Um, mostly, uh, images and audio. These are video these days and then the person that buys it. If they're using the Ethereum main net will pay for it using their gas.

You can also do it on polygon now, but polygons become more expensive, but exceedingly less. So then the main net. So if you're doing NFTs on open seat, I would encourage you to do an offer on polygon because it will save you a lot of. And then social tipping. If you do a lot of good posts, you're seeing a lot of, you know, whales, as they say, large users, that'll tip people that are really.

Putting pen to paper on some interesting articles or they're doing digital art that is relevant to the news and an interesting way. So this just whole ecosystem provides a mutualistic way of people to support each other. And it's kind of like the Y the way that I like, um, publish zero X and the way that you tip someone, but you have to tip someone or to get some money back yourself.

So you can tip someone like 80% of whatever the tip amount is. And that 20% goes back to you. And. You know, with the social tipping, you're incentivizing people to continue to do good work, especially if you own their coin. So there's economies of scale there in terms of it benefiting you. If it's on people on your side and the development costs for creating content and making a meaningful push NFTs is negligible, you know, to none.

So what's often misunderstood is the diesel foundational structure. Really. We have the big cloud, which is one of the nodes, which is a curated feed, essentially, where you can buy the DSO token, uh, by, you know, sending it in Bitcoin and then it converts over. Um, but then you can also create your content.

And then if there's another note out there, like there is for diamond, the diamond app or, um, other node competitors that they're able to curate. And one of the interesting discussions when I was reading about the documentation into DSO is that if ESPN comes online and they're like, let me curate the best accounts for sports.

Now let's say, I want to read about Floyd Mayweather and I want to see what he's doing, but I also want to see what other boxers are doing in the space that came in as a result of him. And so yes, PN might have a DSO node that specifically focuses on MMA or boxing or sports in general. And then as a note holder, they're able to get a little slice of when someone buys the diesel token, but there's also interesting ways to nurture those sports communities and help their node in essence, or a revenue, but also facilitate social token creation.

And when you do. Posts on that node, you know, ESPN node.io. Then it goes to every node because it's a public blockchain. So it'll also be on bid cloud.com. It'll also be on the diamond app and just in the same way that when Pamela Anderson goes on and she did that NFT push that she did, that was so successful, I think based on her barbed wire movie that you could buy and sell it really on it.

Of the nodes because it's a public blockchain, it's all pulling from that centralized blockchain and the technical architecture is out there. It's transparent. It's technology has been on Bitcoin are built on Bitcoin. So it's a known commodity, I think. With the other amount of development that's going on, it's largely done in solidity.

And a lot of times it's done in the Ethereum virtual machine, but as you can see with Binance smart chain with polygon and a lot of the other ones that are experiencing growing pains associated with a lot of traction and a lot of transactions that those costs can go really high. And in the case of.

Yeah, I believe polygon MADEC and Tron, if it's artificially increased, just arbitrarily in order to do so. Under the guise of limiting spam, then the cost to let's say by one of your NFTs may have gone from a few cents to a hundred bucks. And then if your NFT is being sold or as the value is less than that, then you got to look for a less expensive chain and the way that.

Nadir did it in terms of using DSO to create such a scalable solution, I think is innovative and is a way of managing expenses for costs and deployments and recording people's comments and likes on the blockchain, which is innovative. So network congestion is a real thing. Even on blockchains, like Solano that you would think of being cheaper and are absolute cheaper than Ethereum main net transactions and a lot of transactions on different blockchains, but no could get expensive.

Even six months ago, you're seeing different people that are trying to reign in the costs of salon transactions. And it all comes down to the difference between state neutral and state augmenting blockchains. So you have a state neutral, which is essentially. A smart contract and this smart contract is set.

So if you go to a decentralized finance plot platform like compound and want to stake into it, let's say you put in one of Ethereum and you're going to take. 3000 die, which is the stable coin that a lot of people use based on the maker Dao project. That's linked against the dollar. So you need to do a transaction.

To that smart contract to put in the Ethereum and the take out the dye. So the smart contract transaction is being done with code that's verified, submitted to ether. Scan has been audited, and it's a known thing, but state augmenting is you're adding to the blockchain. You're not just interacting with it.

And. Adding to one column and then taking from another, you're actually putting on video and audio and all of this dynamic content that necessitates space. And the result is that when you have a blockchain that's built specifically for. Uh, community and for uploading those costs, um, and you know, the cost associated with what it takes to run a web 2.0 social network that you'll see on open or that on MySpace or Facebook, or what have you, you're going to need at least that layer of technology and the ability to scale, um, that those companies have.

I liked the notion that. You can really infinitely scale with these early projects like Facebook, then you should be able to scale on web three as well. And at the present time, if you're trying to do an on chain social media platform, that's taking all of these images and texts. And certainly video, then you're going to need something that scales it least as well as the web to parole properties that are out there.

And if you're using a theorem, third of a billion dollars for a gigabyte of space, isn't going to cut it. That's going to eat into your bottom line. And a lot of these other protocols that you think as being less expensive, actually turn out not to. And, you know, even salon and I love salon. I love a lot of projects that are being done on salon, especially in a financial space, no psych options.

I saw one today that they're going to do more of an interesting push in the futures and then, um, you know, NFTs and, uh, everything they have to. Carefully traverse their media consumption because the state of the gas costs and the state of the cost to store that media is expensive. So as it stands, you have a gigabyte of storage is one diesel and a D.

So the present time is like $99. And yeah, on Amazon's AWS, it is a few cents for a gigabyte of storage space, but those recurring costs. And at the same time, it has to be woven into the blockchain in such a way that is manageable from an expense standpoint. And that is cybersecurity secure. So you want it to be integrated.

Uh, code layer that allows things to be stored, but in a trustless way and that in a way that can't be compromised. And so the diesel did a great job of providing that structural code to be able to make a social media network. Uh, in the way that a lot of the other blockchains that we think can scale actually reach a point of impasse when doing so is prohibitively expensive, unless they do some sort of off-chain thing, which really defeats the purpose of a blockchain project.

I do see that they have some doubt governance tools like Slingshot that'll be off chain, but if it's a blockchain project, If it can't be done with a blockchain inexpensive on a blockchain, then you know, why not show your ability to use a blockchain as opposed to, I'm gonna use a little bit of it here, a little bit of the here.

Um, And then every project that lowers the cost or barrier to entry, I think should be adopted. I do a bunch of work on side chains on the Ethereum virtual machine that have an ecosystem around them, a community and they're are labeled to do essentially anything that the main net can do or that Binance smart chain can do.

And if the technical architecture is exactly the same, you just have to worry about the bridges between the different side chains. And so the Ethereum virtual machine projects that run inexpensively and are able to be transacted, inexpensively, I think needs supporting not only for the potential to get an airdrop down the road or to make money by being an early adopter and getting in, in some capacity.

A rising tide lifts all ships. So if you're helping these new projects, get scaling transactions and get users, then you know, that that benefits you in terms of learning about the ecosystem, but it benefits them as well because it allows them to show traction for their idea, their use case, and then get some venture funding hopefully, or even bootstrap off their own profits and then grow from there.

Allows them to do what they want to do in terms of their coding competencies. And then they can grow as much as their partnerships and ambitions permit. So I think a good metric that Chamath Palihapitiya was so intelligent to mention is that when it comes to blockchains, if the technical architecture is exactly the same across many of the blockchains.

And it's open source then what do you have? You have a community lead and you have a community and the community can be really fickle and they'll leave at the drop of a hat because they'll see, oh, I can get 15% over here when I'm only getting 5% with you guys now. And yeah, I squeezed out a lot of those early earnings, but what have you done for me lately?

So they may be gone and. Dry up all the total value locked in a matter of hours. So you need a community that wraps around a project that's built there for a meaningful way. So they may be at the unit SWAT project because Hayden came in last Christmas with those airdrops and gave to those early adopters who trumpeted the platform and then became.

You know, what about spending the time to write some articles on unit swap and talk? How about how it was transformed made of, you know, and, uh, important in terms of their automated market maker model in getting a token back for when you give someone a token that was innovative with. With their version too.

But when you look at what people are actually doing and when they're not incentivized to really do it, besides buying their community token, then you're seeing, wow. People have chosen as talented developers to go focus on DSO when they have access to. You know, 10,000 other Bitcoin projects or cryptocurrency projects.

And I like the tools they have on here. They're much more robust than I'm seeing on a lot of other blockchains, specifically the cloud pulse, where you can look to see what the trend is in terms of the coin, uh, how much volume is being done in terms of their messages, their engagement levels, who they're talking to and things that are put out on the blockchain to be able to help people that want to curate talent and help them grow.

In the form of either like a microfund or just for their own investment purposes to get a stake on a particular project. But you know, the ability to use the blockchain on your phone as seamlessly as you can with cloud feed. And a lot of these projects is really remarkable and the market valuations are quite low.

I did an article earlier on LinkedIn about how seed stage projects are exceptionally expensive. Both because they're seeing, um, sky-high exits, you know, DECA unicorns that are able to be done, especially in SAS in a few years. Getting stars in their eyes. And I like projects that scale. And then if you can help them scale when they're at market caps like this, then you're going to benefit it infinitely more than when you get in a later stage, especially because you've done the due diligence yourself that typically isn't being done by a lot of these institutions that throw money at these, um, apps and companies that, uh, wrap around these apps.

And when you think about it, What are these platforms? They're a person. They're a person. They're a team. But really who leads the team? So you have seminal leaders like Vitalik, Buterin, like Nick from the Ethereum foundation, with his Ethereum name, service Hayden at Eunice swab. You have people that are trusted in the space and had a track record in this space because the temptation is so strong to be an anonymous profile.

If you can do something and do a project. Push to have it scale and it falls apart and it doesn't negatively impact you in any way, in terms of your reputation. Then you may even take evaluation at half of what you might, if you do it, you know, IRL in real life. And you're putting in your reputation and talking to people and everything.

So I'll, you see platforms where their press people will have a COVID mask on because they don't want to provide some sort of, um, face to a project under the guise of. I'm trying to prevent against doxing, but we're in tech and all the information is out there. And I think that if you find a project where people are saying, I'm a known thing, I'm investing in this, I'm doing this like Mila Kunis with her stoner.

Cat's like, I'm investing in this art and I like the storyline behind it. I think it's an innovative use case then. That's the way to go because people are putting their reputations behind something. And if it's something like Gemini for the Winklevoss twins who are already billionaires, and they have the resources to make things continue to move forward or lose face, they would rather lose money than lose face, which provides a great amount of stability for a private.

And this, you know, so got 200 million in funding. So I think when you look at a platform, you need to look at the core people behind it. What type of abilities does it have the scale in terms of friction points? And then what can you do on it to help people reach their dreams in terms of being a full-time content creator, a full-time coder and.

See out, whatever they want to do in their life, in their tech, um, chosen field. So feel free to follow my YouTube channel. So I'll sign up for my alt coins sub stack, right. Report on news that I find interesting. And, you know, things like the constitution Dow or. Movements that I think are particularly important.

Like Anheuser-Busch getting into beer dot ETH and making their profile picture. And then if you're interested in pivoting in this space in a meaningful way, we have the winter quarter for the UCLA blockchain certificate. I'd love to have you be a member of the cohort. We've got some interesting people that have already signed up and a lot of interesting speakers that I think you'll find interesting.

Um, in terms of whatever your career path is, either in LA or abroad. And I think LA is just a good confluence of people in the ecosystem that can have media savvy to be able to trumpet a project. A lot of the best developer evangelists are in LA. I mean, even Nater, who is the founder of DSO is in LA and there's a lot that's going on here in and around the campus.

But that, I think that. And understanding can happen because more so now than ever before blockchain specific PR people are gatekeepers to success of projects and their abilities to scale. And yeah. Projects and NFT projects specifically on Twitter, that'll get a lot of followers and a lot of engagement and you'll see a lot of activity, but a lot of that is unfortunately generated volume.

So the transactions are being done between the same wallets. And if you're looking for meaningful traction being done on blockchain projects, look at Crunchbase, look at funding. The it's actually being done. Look at download. Um, sometimes reviews and then interviews that I try to do and other blockchain podcasts and YouTube channels, try to do that.

Interview people that are really getting their nails dirty on the underlying code. So hope you enjoyed this episode and, um, feel free to subscribe for more. Thanks guys.

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Rekt
Rekt

Hard-hitting crypto reporter on the blockchain beat.


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