Reddit is experimenting with cryptocurrency, and though it’s currently only a trial, it might turn out to be one of the most important developments in the space.
The social news site launched a new feature called Community Points, which are earned by submitting quality content and can be spent on premium features such as badges and emoji (as well as being used for bragging rights). This, in itself, isn’t new for Reddit, but these new Community Points are essentially cryptocurrency tokens built on the Ethereum network.
Ethereum, which is both a cryptocurrency like Bitcoin and a platform for decentralized apps, has a standard called ERC-20 that allows for simple creation of new cryptocurrencies called tokens. These have all the basic properties of Ethereum itself — namely, they’re near-impossible to counterfeit, and they are fully controlled by their owners. This means that, once the tokens have been created and transferred to a user, not even Reddit can take them back.
So far, two Reddit communities are included in this beta program: CryptoCurrency and FortNiteBR.
Image: reddit
“Your Community Points exist on the blockchain, independently of Reddit, where they can only be controlled by you (just like Bitcoin!). Neither Reddit nor moderators can take your Points away or decide what you do with them,” says Reddit in an FAQ explaining the new feature. Also, when you spend them, the “Points are ‘burned’ (destroyed). This makes everyone else’s slice of Points larger, thus rewarding the entire community.”
Members of certain subreddits can sign up for Community Points in a new section of Reddit’s mobile app called Vault. There, they can create what is essentially a cryptocurrency wallet for ERC-20 tokens which double as Community Points for these communities.
The trial is fairly small for Reddit, having been launched on just two subreddits, CryptoCurrency and FortNiteBR. But with a combined 2.3 million members, these communities are a big gain for Ethereum, which currently has nearly 100 million unique addresses, roughly 400,000 of which are active addresses.
The tokens, called MOONS and BRICKS, respectively, carry with them some intricacies that the Reddit communities may or may not accept; for example, they offer a new way of voting in which votes have a bigger influence depending on how many Community Points the voter has.
But the big news, for cryptocurrency in general and Ethereum in particular, is that Reddit is absolutely massive, with more than 430 million monthly active users. Should these crypto-based Community Points catch on, they will potentially introduce Ethereum and Ethereum-based tokens to Reddit’s entire user base.
At this point, it’s hard to judge how serious Reddit, whose largest shareholder is media company Advance, is about this project. But the slideshow that shows up when you visit the Vault section on the site leaves an impression that the company is ready to embrace the openness and decentralization which are important traits of Ethereum.
Opening your cryptocurrency wallet, or Vault, on Reddit is easy and consists of a few taps and the creation of a password.
Image: Reddit
“Today, the free frontier lays in ruins. Walled gardens dominate the landscape, with people trapped behind walls and under watch. Is this how the Internet ends? Or will people find a way to take back control? With the right tools, people can break free of the parks and escape the walled gardens. (…) The frontier could finally regrow into a dynamic world of diverse, prosperous, and independent online communities,” the slideshow says.
Community Points are currently in beta, and they aren’t deployed on Ethereum’s main network (mainnet). Instead, they’re deployed on one of Ethereum’s test networks (testnet), called Rinkeby. That means that, at this points, MOONS and BRICKS cannot directly represent monetary value. On Ethereum’s mainnet, the underlying currency, ETH, and many ERC-20 tokens, have an actual value in the way that they can be exchanged for dollars. On Rinkeby, ETH and tokens aren’t typically worth anything. However, Reddit says it plans to migrate the Community Points to Ethereum’s mainnet after the summer, together with users’ points balances.
I’ve asked Reddit about their plans regarding Community Points and blockchain in general, and will update this article when I hear back.
UPDATE: May 14, 2020, 9:45 p.m. CEST “We continuously run experiments to explore features that engage our users and communities. With Community Points, we’re working exclusively with two communities to test this feature and gather feedback from our users,” a Reddit spokesperson told Mashable.
UPDATE: May 14, 2020, 9:45 p.m. CEST The article originally said Reddit is owned by media company Condé Nast, but it has been spun out as an independent company in 2011, with its largest shareholder being Advance, which also owns Condé Nast. The article has been updated to correct this.
Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH.