Digital currency prices exploded toward the end of 2017. In the final weeks of the year, one major mover was a relatively new coin called Reddcoin. According to Bitcoin Isle, the cryptocurrency achieved a $263 million market cap after gaining 500% within a week, catapulting it onto the list of the top 70 cryptocurrencies by total market capitalization.
But what is Reddcoin? And how did it achieve such significant gains in the final days of 2017?
A 'Social Currency for the Digital Age'
Reddcoin markets itself as a "social currency for the digital age." As such, it is designed to be used on major social media platforms like Instagram, Twitter, Reddit, and Facebook. From a marketing standpoint, the currency is fairly straightforward; it is not unique in hoping to harness social media in this way.
Unique PoSV Concept
However, Reddcoin does provide an interesting technological feature. The "PoSV," or proof of stake velocity algorithm, is a new means of validating blocks. Traditionally, coins have used proof of work or proof of stake (bitcoin and ethereum are mined using these two methods, respectively).
Reddcoin makes use of both ownership and activity to situate value. Validating blocks on Reddcoin is a process known as "minting," not "mining." One benefit to PoSV is that it takes significantly less computing power than mining does; it can even be completed on mobile devices. As such, every Reddcoin user is automatically a minter. And the more Reddcoins you own, the greater the likelihood that you will find blocks and receive additional rewards.
Cause of the Surge
Why did Reddcoin suddenly surge in value at the end of 2017? Some of its recent success may be due to bitcoin, whose price spiked to spectacular new highs toward the end of 2017.
Reddcoin also offers speed and functionality, allowing users to trade in higher volumes than for some other cryptocurrencies. As the demand for cryptocurrencies has grown, those currencies which have been able to meet this demand without losing transaction functionality have been best positioned to succeed.
Further, Reddcoin may have seen success as a result of its links to social media. The Reddcoin development team aims to incentivize investment and minting via social media platforms. As a result, users don't even need to understand how Reddcoin and its underlying technology works; all they have to do is accumulate it in order stand to reap greater benefits from the minting process.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by me to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. As of the date this article was written, i owns cryptocurrency.
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