Reddit launches tribe tokens on its platform. Here's why it will be a failed experiment

in LeoFinance4 years ago

So far social media platforms built on a blockchain or the ones including a cryptocurrency token to reward their users has always been a new startup.

But recently an existing and established social media platform with about 400 million users integrated cryptocurrency on blockchain into its platform. Yes, I am talking about Reddit.

Reddit has recently launched two ERC-20 based tokens and integrated them on its platform. These tokens viz. MOONs & BRICKs are being integrated in two of its subreddits with over 2 million existing subscribers.

For now these tokens can represent user reputation and can be used to unlock some badges. This is a pilot project intended to incentivise user contribution. So these tokens will be rewarded to users in return of the upvotes they earn through their posts and comments.

But will Reddit succeed?

Yes, at least it will bring a massive crypto adoption by exposing all its 400 million users to the world of cryptocurrency.

But I don't think this experiment is gonna succeed for Reddit itself. Here is why I think so.

Firstly, Reddit is not a blockchain and will always stay a centralised platform. So major part of the income generated through this platform will not be shared by users. Users may get some pennies which won't be enough to lure serious content creators to the platform and incentivize the existing ones for long.

Transferring ERC-20 tokens consumed gas. So these are not suitable for transferring micro-payments. A Hive SMT integration would have been a better choice for that, if SMTs were already here!

Secondly, ERC-20 tokens are based out of ethereum network and not on its own blockchain. Neither are these tokens any SMT or a tribe token as issued on Hive Engine. So Reddit has hardly any control over these tokens except their issuance over Ethereum smart contract. There won't be much flexibility to adapt and change the token reward structure & tokenizing model as per the needs of the community.

Just converting community points to transferable tokens won't make a huge difference. At best they can become akin to some loyalty tokens. Use case is what provides value to a token. If it's only a loyalty token then its value will be severely limited for what they can be exchanged for.

Since they have started this pilot project with cryptocurrency community, once they will start trading these tokens on some exchange, they will also start comparing it with other similar social media tokens. This will eventually help them discover the strength of other social media platforms on blockchain and they may switch over to them.

It seems, they just wanted to be the first to integrate cryptocurrency token into their platform before others could do it and capitalise on the first move advantage. Of course, they win over that. But if they lack flexibility to add features quickly to compete with their potential competitors then they will lag behind.

I don't see any innovative model to attract more users or sustain their existing userbase. The only advantage ...and by far the biggest advantage they have got is of a huge existing user base.

But that alone is not enough to succeed in future. I can only hope that they can find a better way to maintain and increase their user base.

What other reasons you can think of for the failure of of adoption of cryptocurrency by credit platform.

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Whether Reddit succeeds or not, to me, it shows the non-blockchain world is recognizing the importance of the blockchain. Can Facebook be far behind?

Yeah, you can't ignore an idea whose time has come!

Everyone including FB, Telegram and Twitter WANT; and is trying their best to reap the benefits of cyptocurrencies but none of them has been successful in figuring out HOW, to this day. But there is no denying that they appreciate its power; ...and actually feel threatened by it!

I agree. They should have opted for non ERC tokens.

Yeah but I dunno what's changing about transaction charges after ETH moves to PoS model.

Yeah but I dunno what's changing about transaction charges after ETH moves to PoS model.

It's difficult to predict.

Posted Using LeoFinance

interesting idea.
I agree, I do not see it having the impact as it does on blockchains.
more of a novelty function