Reddit gets $50m funding, plans new cryptocurrency to share the wealth

Self-styled front page of the Internet site Reddit.com is flush with case all of a sudden, after confirimg a new $50 million funding round. Its a bucket-load of cash to be sure, but whats more interesting is that the site is promising as much as 10 percent of the amount will be shared with community members through the creation of a new cryptocurrency.

Reddit users do deserve a share of the spoils, for theyve helped make the site the huge success it is today. One thing its particularly good at is spotting Internet trends and news long before the mainstream media does, and of course its a great place to find things like stolen nude celebrity photos or hunt for terrorists.

Reddit CEO Yishan Wong wrote in a blog post that the investors have agreed to hand over 10 percent of their shares to community members, as part of the terms of the deal. However, it seems Reddit doesnt know exactly how its proposed cryptocurrency will work just yet. It could be that the cryptocurrency is used as a kind of ownership token of shares in the site a concept thats been proposed by several crypto 2.0 projects in the past.

Nor is Reddit the only company to announce a plan like this Overstock.com made a similar announcement last July.

Wong attempted to clarify things on the r/blog subreddit, saying that the idea is to create a special-purpose cryptocurrency backed by the values of shared created by this funding round. We are thinking about creating a cryptocurrency and making it exchangeable (backed) by those shares of reddit, and then distributing the currency to the community, wrote Wong. The investors have explicitly agreed to this in their investment terms.

Given the potential benefits for site users, Wong feels the idea is worth trying, although he warns that Reddit is currently just exploring the idea. CAVEAT: KEEP IN MIND THAT THIS PLAN COULD TOTALLY FAIL, he added in a later post.

As for the rest of the money, Reddit plans on using it to bolster its production development staff and community management teams, and to increase its mobile presence. Just this month, Reddit launched an official mobile app for its popular Ask Me Anything sessions, so we can expect to see more developments in this area.

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Reddit gets $50m funding, plans new cryptocurrency to share the wealth