I saw this piece of news and is quite surprised no one seems to be talking about it on Hive yet. Reddit is introducing the concept of "community points" in the form of ERC-20 tokens to their subreddit. The beta will start with the /r/Cryptocurrency and /r/FortniteBR subreddit with the $MOON and $BRICKS tokens respectively.
Source for this screenshot and all subsequent ones
How Community Points work?
Community Points are rewards
The very first thing Reddit mention about when answering what are Community Points, is that these points are rewards.
People earn Points by contributing to the community, for example by submitting quality posts and comments. Based on these contributions, the community ultimately decides how many Points each person receives.
Sounds familiar?
Community Points are cryptocurrencies
Next, Reddit also implies that Community Points are cryptocurrencies. Though they do not mention it directly, it is clearly implied when they draw parallel with Bitcoin and from these descriptions,
Again, these features are somewhat similar to what we have on Hive.
Community Points represent influence
Reddit also mention that the points represent reputation and voting power.
Though the voting and reputation system is quite different from what we have here on Hive, it is of the same idea that having more points means having more influence. Likewise on Hive, having more HIVE or Hive Power means more influence.
A different way of distribution
The way Community Points will be distributed is very different from Hive though.
It seems that Reddit wants to allow the communities to have the final say as to how the points are distributed each month. This is very different from the system we have here on Hive.
Another interesting thing is that Reddit is capping the points for each community at 250 million with a mechanism to ensure that points can be re-circulated.
A threat to Hive?
Most people know about Reddit and have probably visited Reddit before as it commonly shows up in search results. Their slogan claims that they are the "front page of the internet". They have 330 million active users, $100 million annual revenue and the site is ranked number 19 on Alexa rankings. We know Hive is a fork of Steem, and when Steem started, the first application/interface is called Steemit as a direct challenge to Reddit. Years have passed but we are nowhere near.
All this while, Hive (or Steem) had a key differentiating factor when compared to Reddit, which is that we can earn cryptocurrencies on Hive but not on Reddit. However, this seems to be changing with this new feature from Reddit. If this takes off, it is certainly going to challenge the relevance of Hive. If these tokens also have a market for them to be traded, this will mean you can also earn by contributing content on Reddit. When that day comes, will someone new prefers to join Hive or write on Reddit? Will existing Hivers move to write on Reddit instead?
Or is it an opportunity?
If we flip our perspective, this new feature may be an opportunity for Hive. One common skepticism Hive often gets is that it is a ponzi scheme. How do you get rewarded just by writing stuff? Isn't money printed from thin air? Who is paying for all this?
Such skepticism is understandable on a platform so small like Hive (or Steem). But when a large and reputable platform does it, it will be greeted differently. However, the underlying concept is the same. It doesn't take Reddit a lot of money to mint the tokens since they are minted from thin air. All they did is to spend time creating this feature on their platform. So isn't this what Hive has been doing all this while?
So if this concept can be proven on Reddit, perhaps more people will start to believe in it. Naturally, one way or another, it may lead some people to Hive.
Ethereum is still a winner regardless
Reddit is platform trying to bootstrap a cryptocurrency with their existing user base, while Hive/Steem are trying to bootstrap a user base with their cryptocurrencies. Only time will tell who will be the ultimate victor. However, at this point, it seems that Ethereum is going to be a winner regardless.
Since the tokens are ERC20 tokens and operate on the Ethereum blockchain, it is clear that Ethereum will benefit from this in the long run. Not only does it get more people to know about Ethereum, it is going to cause the number of Ethereum wallets to explode. This is going to have a strong positive network effect on Ethereum in the longer run.
It is also interesting to see so many so-called Ethereum killers available but Reddit still chose to have these tokens issued as ERC20 tokens.
What are your thoughts about Reddit issuing ERC20 tokens for their subreddits? Do you think it is a threat for Hive or is it an opportunity?
20% of post rewards goes to @ph-fund and 5% goes to @peakd to support these amazing projects.
Maybe the horrors of gas will see people flocking to Hive?!?
Reddit is paying for the gas, at least for a start
Wow! So people don't even need to worry about it?!?
That's maybe something to be worried about.
Also "optimistic rollups" allow applications to put up to 500 transactions/events into one Ethereum block. This means the gas cost is 500x cheaper and faster through optimistic rollups.
And When Ethereum does EIP 1559 you won't manually pay gas anymore, it will be automated so you only need a little ETH in a wallet and it can be used as gas without thinking about it.
Long term, resource credit systems allow for rent seeking, which means in the very long term RCs would actually be more expensive than Ethereum's gas system.
Interesting, thanks for educational comment!
Were are we on HMT/SMT ? more delays means that we are losing opportunities.
Not sure if HMT/SMT is going to make a huge difference. But I do agree Hive will need to buck up if we do not want to lose this race. At this point, I think we are still a better platform for community building. As time goes by, Reddit might catch up pretty fast and make Hive less relevant
We have to work hard for the sucess of hive platform.
First platform need to create something to offer.
Indeed
Ethereum is gaining massive grounds I must admit, if gas fees won't be an issue for reddit, then it will make transactions seamless and given the chance things go well, other sites that should use smt's might change to Ethereum. Oh dear SMT where are y'all.....reddit would have been a perfect fit for a first launch. Let's see what the future holds.
I think its good. More ways for people to earn!
But I never use reddit, so I wouldn't start to
Good positive thinking!
I'm just wondering how ethereum would be able to handle the transactions if they introduce a new token with 20m active wallets? Will it affect the blockchain itself or can it handle the load?
I believe Reddit has thought of this before and that is why they are distributing the tokens once every four weeks. Furthermore, there are plenty of layer-2 scaling solutions on Ethereum, so I won't be surprise to see Reddit using one of them to support this initiative.
They can also distribute tokens via their own sidechains. The sidechains require no gas to be used, and every so often it connects to the mainchain for a huge data dump of backups.
Anyone can make their own plasma sidechain right now and basically have unlimited free tx.
That is right. There are many ways to circumvent the scaling problems that many people are unaware of.
There's actually a really cool technique for solving all scaling issues. OST solved this. You create a smart contract on Ethereum and a blockchain on Cosmos that communicate through two light clients. This allows the "value chain" to be on Ethereum while the "utility chain" exists on Cosmos. This gives you all the scalability you need for social activities on the utility chain and you secure the assets by putting them in the "vault" which is Ethereum.
Loom also did a DPoS scaling system. Its pretty much a Hive/EOS like blockchain that easily transfers assets in and out of Ethereum. So, scaling is no issue at all.
Thanks for sharing your thoughts on this interesting topic. At this point Reddit has nothing to prove. It is Hive that will need to show that it is better. Then, the masses will make their decision.
Yup, fully agree
You're definitely right, these features look like What we might have on hive. I think we need more presence on Reddit so that people there can even see we already have what they're trying to introduce. Hive is on the right track
Let's hope so
It's not a threat. The scope is huge. Reddit contents are a bit different than hive or steemit. Competition expands the market for all when the market is at a very nascent stage.
Agree that content is different. But I am afraid it is just the beginning. Other platforms may follow suit as well if Reddit is successful.
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