Reddit Reveals Distribution Plan Of $5M For Users
When Reddit announced its closing of the $50 million valuation round in September, we just shrugged it off. But then it caught our eye – the company’s CEO also announced on Reddit that it was considering returning 10 percent of its funding back to their userbase.
There were no details given after the delicious offer, so we all had been speculating about the news ever since. But the wait is over. Reddit announced, somewhat vaguely, that it will be handing out Reddit Notes to 950,000 users in the fall of 2015 through a random lottery.
You will be eligible to enter the lottery only if you were active before the announcement in September. So all of you readers hurrying to join Reddit for a little $$$ might sit back and watch enviously.
So how will the process work? Reddit graphically explains the steps involved:
Reddit is being vague about the whole deal because the company is still “working out details on both technological and legal aspects of the project.”
So the Reddit Notes mean that it won’t be like any other cryptocurrency and bitcoin. Product manager, Daniel Lim, advised to think of it more “Like McDonald’s Monopoly game” rather than a currency that has value.
Why is that so? Ryan Charles, Reddit’s cryptocurrency engineer explains:
The post is deliberately vague about technology and legal. For one, we’re holding back on committing to a particular technology just because the bitcoin world changes very fast, and we want to make sure we pick the right choice. However, almost certainly it will be either colored coins or sidechains.
Legally, we originally announced we’re issuing a “cryptocurrency” that will be “backed” by reddit shares. Issuing such a thing would be illegal since we are not a public company. We have mostly figured out a legal strategy that allows us to give something of actual value to the community, but we are not ready at this moment to announce it.
Fine, we get all that. But what exactly is a Reddit Note then?
According to Lim, a Reddit Note will be a kind of a digital asset which will be using the blockchain technology in a “fun way.”
This technology is basically a database shared by all nodes in one transaction of the Bitcoin protocol. So it will be able to ensure the validated ownership of the Reddit Note holder. This will be done by implementing existing cryptocurrency techniques in an “innovative manner.”
What does all this “fun” and “innovation” really point to? Unless Reddit gives out a clear indication of their plans, we can only wait till fall of 2015.