By @HughJiang • Published April 22, 2021
Over the past month or so, BitClout has exploded in popularity. If you don't already know, BitClout is a decentralized social media platform that allows you to invest in creators and celebrities through the BitClout cryptocurrency.
BitClout can be directly bought from the BitClout.com website using Bitcoin. But, what if I told you there was a better, cheaper way to buy Bitclout?
You can buy BitClout at up to a 40% discount off the official prices on BitClout.com by going to secondary markets and buying from other users who don't want their coins anymore. Right now, BitClout doesn't have a native withdrawal method, so people are selling BitClout coins in private transactions at a discount.
In the rest of this post, I'll be showing you how you can safely and securely buy BitClout in these secondary markets, without being scammed.
First, I'd like to explain more about why the prices on secondary exchange markets are cheaper than at BitClout.com. If you're not interested in why prices are lower in private transactions, you can skip this section.
Spoiler: it all has something to do with basic supply and demand.
The pricing of BitClout on BitClout.com is automatically determined depending on the total amount of BitClout coins that have been minted.
According to BitClout's whitepaper, for every million coins of BitClout minted, the price will double. As a result, BitClout prices will remain low early on. But as doubling and exponential growth occurs, prices start to grow a lot faster as more BitClout is minted.
Exponential Growth Illustration / courtesy of Sigil Wen
Why is this important?
Well, it's important because there isn't a native withdrawal method yet, which means people can't sell BitClout for other currencies directly from BitClout.com.
Since prices have grown so fast, many people have seen their initial small investments grow into thousands, or even hundreds of thousands of dollars.
Simply put, some of these people would like to withdraw BitClout back into US Dollars, and there is currently a greater supply of BitClout for sale than there is a demand for BitClout on secondary markets. That's what makes BitClout cheaper on secondary markets.
In fact, at the time of writing BitClout goes for about a 40% discount (or around US$100 per $BTCLT) on secondary markets, which is HUGE if you're looking to get started with BitClout or if you're looking to buy $BTCLT coins.
I can't guarantee these prices will remain the same forever (they might go up or go down), but for now, that's the general secondary market price.
There are two main ways to buy BitClout on secondary markets: you can either buy through an over-the-counter (OTC) transaction, or buy from a third-party BitClout exchange.
Buying from a dedicated BitClout exchange is probably the easiest way to buy $BTCLT at a discount. Generally, it's a lot less risky and easier than using an OTC transaction (which I explain later on in this post).
A third-party BitClout exchange allows you to buy and sell BitClout for other cryptocurrencies like Bitcoin, Ethereum, USDT/USDC, etc.
Currently, BitSwap is one of the most well-known third-party BitClout exchanges and is the only exchange verified on BitClout. So for the rest of this section, I will provide buying instructions with regards to the BitSwap platform. However, as more exchanges open up, they may be good options for you too (just make sure you do your own due diligence so you don't get scammed).
Disclaimer: I (@HughJiang) am a member of the BitSwap team. However, I tried my best to keep this article as unbiased as possible. :)
Here's how to get set up on BitSwap to buy BitClout at a discount:
First, sign up for an account by visiting BitSwap’s signup page. Enter your email and some other required information to register your account.
You'll also need to enter your BitClout wallet address after you register, so BitSwap knows where to send your BitClout purchases.
With an account, you can create a buy order to buy BitClout. Set the price that you would like to buy at, and BitSwap can automatically match your order with someone looking to sell. Then, you will need to send Ethereum to us and we will release your BitClout to your account instantly.
Alternatively, you can browse available listings of BitClout for sale (posted by other BitSwap users).
Tip: use the filter, search, and sorting features to find listings faster.
When you find a listing with the right price and quantity, you can initiate the purchase by clicking the buy button. Follow the instructions for sending Ethereum to the specified wallet address.
Immediately after the Ethereum transaction is processed (can take a few seconds to a few minutes depending on Ethereum network load), you will be sent the BitClout that you purchased.
That's all there is to buying from a BitClout exchange!
If you'd rather not use a BitClout exchange for whatever reason, you could also try buying BitClout on secondary markets via an OTC transaction.
An over-the-counter (OTC) transaction is a private sale between two parties without using a formal exchange.
Oftentimes, a third-party escrow is also involved as an intermediary to the transaction to ensure nobody gets scammed. The escrow receives funds from both the buyer and the seller, verifies the correct amount was sent by both, and then re-distributes the funds accordingly.
For example, if I were buying 1 $BTCLT coin for $100 USD from a hypothetical person named John, we would first find a third-party escrow whom we both trust to hold the funds (let's say Bob is the person acting as escrow).
Now, I would send $100 USD to Bob (the escrow) and John would send 1 $BTCLT coin to Bob. Once Bob verifies that these transactions are completed properly, he would send the $100 USD to John as payment, and I would receive the agreed-upon 1 $BTCLT, sent to my BitClout wallet address.
By using a trusted escrow in OTC transactions, we are able to reduce the risk of fraud and scams, while also ensuring that our funds are safe until we receive the agreed-upon BitClout that we bought.
How to Find Safe OTC Transactions and Escrows
It can be difficult to find BitClout sellers and trusted escrows on your own.
Luckily, there are specialized Discord and Telegram groups for OTC transactions, with their own designated and trusted escrows to ensure that nobody gets scammed.
Normally, the people acting as escrow will take a 1-4% transaction fee for ensuring the safety of the transaction.
For example, BitCloutPulse has a Discord channel for OTC transactions, and BitSwap also has one. You can also find other OTC trading groups by searching through BitClout posts or asking other people.
In these discord groups, you can post listings saying things like "WTB 50 at $100", for example, which means you "Want To Buy 50 $BTCLT for $100 each".
You can also find sellers by looking through messages of other people looking to sell, where "WTS" means "Want to Sell".
When you find a seller in the group, contact the designated escrows to handle the transaction. Follow their instructions and rules, and you should be well on your way to getting BitClout at up to a 40% discount!
In BitSwap's OTC trading group, @venkat is the designated escrow
Precautions When Using OTC Transactions
When using any OTC platform, make sure to do your own due diligence so you don't get scammed.
You'll want to find a platform or group with a large community and multiple testimonials of real successful transactions. You'll also want to make sure prices are realistic, and that the people acting as escrow have real identities behind their profiles (don't do transactions with anonymous or sketchy escrows, duh!).
The groups I listed above (i.e. the BitClout Pulse Discord) are trustworthy to the best of my knowledge. But, still make sure you do your own due diligence.
You can also try to find your own buyers by contacting friends or people you trust in your own network. If you're doing a transaction with someone you trust, you can skip the escrow, and skip the fees! (although you still have to pay for network/gas fees)
For most people, it’s a lot easier (and faster) to buy BitClout using a dedicated BitClout exchange.
Oftentimes, exchanges will have a higher volume of orders and better liquidity, so you have more listings to choose from when you buy $BTCLT.
Furthermore, exchanges like BitSwap have automatic transaction verification so your purchases will be pretty much instant (you won't have to wait for someone to manually escrow your transaction like you'd have to do in an OTC trade).
However, there may be some benefits to using an OTC transaction. Sometimes, you might be able to get a lower buy price from people who aren’t familiar with secondary market prices. You might also be able to maintain more privacy, since you can use an anonymous account without needing to reveal your email or BitClout handle to anyone.
Overall, however, the majority of people would probably benefit more from the simplicity and speed of trades on a BitClout exchange, rather than trying to find their own OTC transactions.