Reddit Moves Into Crypto
Hello guys, I woke up to read a post on Medium about Reddit getting into Cryptocurrency and I thought we should look at it together and what it means for "an already established" cryptocurrency ecosystem like Hive. I will be extracting snippets from the post and pasting it here in block quotes with my opinions beneath them.
Firstly, I will like to point out the fact that Reddit boasts of having close to 20million users that visit the cryptocurrency sub-reddit everyday, this is meant to be a big deal, considering that those 20 million users will be exposed to this new system and become potential adopters, that's more than the numbers of people who own an Ethereum wallet.
What does this mean for Reddit, Reddit users and Crypto in general? Let's delve in further.
Reddit launched two new types of loot token (a token on the Ethereum blockchain that is earnable within a community rather than purchased) in their /r/Cryptocurrency and /r/FortniteBR subreddits, and in turn signaled their plan to pivot the company’s monetization more towards crypto.
I think this is really cool and big ups to Reddit company as it aims to onboard more people into crypto. Its about time big social media companies start to embrace the use of cryptocurrency in monetization, other players like Facebook with similar intentions have been long stifled by the U.S government based on regulatory reasons such that the project is yet to see the light of day.
Let's check out the Reddit plan
Reddit will distribute these tokens initially based on Reddit Karma to represent compensation for the value that users have contributed to the community overtime.
Reddit itself will keep a portion of the tokens in each subreddit, and award a small portion to the community moderators for managing the subreddit.
On the launch day there will be an initial distribution of 50M tokens covering previous activity in the subreddit, and then the remaining tokens will be distributed month over month diminishing with each monthly distribution until it hits its cap of 250M tokens for each individual subreddit.
Well, I've never really used Reddit, and don't own any Karma so, I guess people like us are exempted from initial distribution, but ofcourse.
Now to the interesting part.
What can I do with these loot token?
By definition the Community Points Program issues a type of loot token on the Ethereum blockchain, which means you can both earn it in the community, and redeem it in the community.
In the case of Reddit, you’ll be able to use these tokens to tip other users, buy badges and awards, take part in weighted polls, or buy a special membership to each subreddit (that gives you a colored user name, specialty loyalty badges, and the ability to embed gif replies in your comments.)
Use case, Use case, Use case! This is the most important aspect of any cryptocurrency next to its distribution model. The more useful a cryptocurrency, the better the economy of that crypto ecosystem. In the case of Reddit, the crypto exist to be used to
- Tip members - 😀
- Buy badges - 😊
- Buy awards - (buy awards?)🤔
- Vote - 🙂
- Buy loyalty badges -🤔
- Gives ability to embed GIF in comments - 🤐(Is that a joke?)
If I were a Reddit shill, I would have said this was awesome, but I'm not and this doesn't seem awesome to me, don't get me wrong, these use cases are mostly burn techniques to reduce the amount of token in circulation which makes sense, but is it enough? If I'm not going to be Tipping no one or need to buy the a badge or an "award" that is nothing more than it is, then I totally will not be buying it, but maybe you would, and other people too, maybe.
However if I earn it, I'd be happy to change it for some cash or other crypto.(thought's of an average random user) Ultimately, the most valuable reason to hold the token is for speculation, based on reduction in supply of the tokens and future potential demand.
What do you think?
I'm comparing Hive to Reddit based on the understanding that Steemit Hive was initially modelled after Reddit.
I think this is cool, for the fact that it exposes close to 20 million users to crypto, my hope is that most of these users are totally new to crypto and will look out for other alternatives as time goes on.
On the other hand, Reddits token model is presently based on Ethereum blockchain which means transactions will likely involve payment of gas fees, thanks to blockchains like Hive, I hate gas fees! Any sort of fees in general. Hive has proven to be able to handle more thorough TPs than Ethereum.
It would have made a lot more sense for Reddit to apply Hive SMT's technology to its model but SMT's are still not ready. Did Hive just loose potentially 20 million users from Reddit? I think so, but this is not the end. What Hive offers extensively surpasses what Reddit is presently offering its users in terms of token economics and technology in general, censorship is still going to be a problem on centralised platforms like Reddit, Hive is laying a practical foundation for full decentralized ecosystem, well good things take time right?
Perhaps its all too early to judge but given the chance to choose which to hodl more, I will rather hold Hive tokens for its myriad of benefits than hold Reddit tokens, all the same, the crypto world is about to get about 20 million potential users, I guess thats cool stuff.
Cheers.
Thanks for reading
