Reddit has announced a new $50m funding round that could lead to a unique way for the social network to give back to its community – its own cryptocurrency.
In a post on the company’s official blog, CEO Yishan Wong revealed Reddit had secured funding from a number of well-known venture capitalists and VC funds.
Notable names included Sam Altman, president of the Y Combinator startup incubator, Andreessen Horowitz partner Marc Andreessen, PayPal co-founder Peter Thiel, actor Jared Leto, hip-hop superstar Snoop Dogg and Wong himself.
Perhaps most notably for the digital currency community, however, was that all of these investors agreed to set aside 10% of the round’s proceeds to give back to the community.
Wong wrote that the move was a recognition of the central role the digital currency community has played in Reddit’s ongoing success, but provided few details on the company’s potential plans.
When asked by CoinDesk to elaborate on the concept, Wong said only:
“We’ll have more to announce in the future.”
The use of digital currency as an ownership token, has long been held as a future use case for block chain technology in general, and the concept is a focal point for many crypto 2.0 projects and frameworks.
Still, Reddit isn’t the only major company to announce it intends to experiment with the emerging technology, following similar statements from Overstock in July.
Asset-backed approach
In comments posted on the r/blog subreddit, Wong was more detailed, saying that the company may seek to create a special-purpose cryptocurrency that would be backed by the value of the shares created during the $50m funding round.
Wong explained:
“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. The investors have explicitly agreed to this in their investment terms.”
Wong added that he feels the idea is worth the attempt given its potential benefits for site users, but that the company hasn’t moved beyond the initial exploration phase with the idea.
Bitcoin-friendly backers
Among those who took part in Reddit’s $50m round are some investors who would no doubt be receptive to the company’s use of block chain technology.
Altman’s Y Combinator is no stranger to bitcoin startups, having played patron to bitcoin services provider Coinbase and bitcoin ATM developer BitAccess, among a host of other digital currency startups.
Further, Andreessen Horowitz, has a long history of investing in digital currency startups, and PayPal co-founder Thiel has called bitcoin something that “could become a new phenomenon”.
According to Wong, the caliber of investors Reddit has attracted reflect its long-standing commitment to free speech and open Internet activity.
Wong wrote:
“We have been entrusted with capital by patient, long-term investors who support our views on difficult issues. We believe in free speech, self-governing communities and the power of voting. We find that this freedom yields more good than bad, and we have chosen investors based on this belief.”
Image via Reddit