ReddCoin's goal is to become the social currency that is used to on a decentralized tipping platform to reward content creators through these micro donations. This is an improvement to the Karma system on Reddit in that the donations would have actual monetary value.
Social Media Platforms Today
The most popular social media platforms like Facebook, Twitter, Instagram, Snapchat, YouTube, etc. are all essentially advertising platforms. Facebook, Twitter, Instagram and Snapchat don't share any of the ad revenues with their creators because these sites provide a service. They all connect users with other users and as along as the network is strong, it makes sense for the users to continue to use the service and thereby create content for the sites for free.
There are ways to monetize the social status of some platforms, however. Popular users of Instagram and Snapchat have figured out that they can monetize their large list of followers by promoting items for advertisers directly, thereby circumventing the platforms.
YouTube has a partnership program where they share ad revenues with content creators. This makes sense because there is no other use case for YouTube other than viewing content, i.e. users are not interacting with each other on YouTube for the sake of doing so. Because of this ad share model, YouTube has been able to grow the platform tremendously over the past 10 years.
There are a handful of media platforms that reward creators through direct payments from viewers. TwitchTV is where many popular gamers stream themselves playing games while interacting with viewers. Twitch has two methods in which viewers can pay the creators. They can make direct contributions through donations of any dollar amount or they can subscribe to their channel for $5/month, of which the creator typically gets half.
Patreon is another platform in which creators get consumers of their content to subscribe to their channel for a monthly fee. The site keeps 10% of the payments, creators get 90%. Creators usually pair their Patreon channel with other platforms such as YouTube or TwichTV, but they try to give their Patreon supporters either early access to content or exclusive content to compensate for their support.
So Why Do We Need ReddCoin?
We don't really "need" this tipping platform other than helping creators better monetize the advertising based platforms. It can also help creators monetize their content better across different geographies. The consumer based in Israel can easily help her favorite TwichTV streamer without having to go through the many hurdles of converting currency to U.S. dollars. That same user can also tip her favorite Twitter handle for some insight into her favorite topic.
The key here is ease of use, which should lead to greater reach. Imagine a scenario where all of the Twitch donations and subscriptions are paid in ReddCoin. How different would that experience be? And how impactful would that be for the ReddCoin network?
How Much Should ReddCoin be Worth?
No one knows, but there should be some value of the ReddCoin if it is being used as the tipping mechanism for all these social media platforms. With the dramatic increase in prices of many AltCoins this summer, ReddCoin also saw a spike. After the rally, the price has trickled down lower, and part of that has to do with the lack of development activity. The Reddcoin Tip Platform extension on Chrome hasn't been updated since 2014. That goes the same for the Reddit, Twitter and TwichTV bots on the site.
The team has recently put out its updated roadmap, which should help get some increase activity on the platform, even if it's just the typical trading of tokens on the various exchanges. We'll see if they can hit their targets for the web wallet and Redd ID.
What's Unique about ReddCoin's Blockchain?
ReddCoin used to be similar to Bitcoin in that new coins were minted through proof of work (PoW). Miners would use processing power to add new blocks to the ledger and get paid in new coins. However, the founders saw that proof of work would eventually become burdensome and unsustainable in the long-run so they moved to a proof of stake velocity model (PoSV). With the PoSV model, holders of the coin can stake the coins in their wallet and gain an annualized increase of 5%.
This is the best paper I've read so far on the benefits and drawbacks of PoW, proof of stake (PoS) and PoSV. I recommend reading the whitepaper.
It goes over all the problems associated with PoW such as the mining arms race, electricity consumption, and movement to ASICs; PoS such as hoarding and fairness of coin distribution.
Conclusion
So there is potential here, but it really depends on the adoption rate after the developers get their act together. Hopefully there are meaningful improvements in the software in the near future so we can monitor the progress.
Sources: Reddcoin.com