After weeks upon weeks of rumors, on Thursday, Reddit confirmed that it is dabbling in Ethereum technology for a new feature called “Community Points.”
These tokens are purportedly first being rolled out for r/CryptoCurrency and r/FortniteBR — two prominent forums that purportedly have 20 million monthly visitors between them.
A big deal was made online of the feature leveraging Ethereum, but this isn’t 100% true, at least not yet.
Reddit Isn’t Using Ethereum’s Mainnet Just Yet
While Reddit is using Ethereum technology, for the time being, the tokens will be situated on the Rinkeby testnet, not the main blockchain.
According to Reddit admin “Jarins”:
“Community Points are currently in beta on the Rinkeby testnet (through summer 2020). After the feature leaves beta, Community Points will be migrated to the Ethereum mainnet. Points balances will be carried over.”
While some say this diminishes the potential of the Points project, the use of a testnet over the main Ethereum chain may be beneficial for the time being.
Below is a chart of the total amount of Ethereum transaction fees collected daily from Etherscan.io.
Due to users increasing their usage of ETH and wanting to get their transactions faster, the amount of transaction fees collected by miners has nearly tripled in the past two weeks.
Chart of the total amount of Ethereum transaction fees collected per day.
By ensuring that Reddit users stay off the Ethereum mainnet for the time being, a frothy transaction fee market and slower average transaction speeds can be avoided.
As Brian Flynn of Ethereum startup Rabbit Hole wrote in reference to when CryptoKitties dramatically slowed down Ethereum transactions in 2017:
“If this is happening on Rinkeby, then what will happen to gas price and blocks when Reddit launches this on mainnet? Won’t we just have another CryptoKitties moment?”
If this is happening on Rinkeby, then what will happen to gas price and blocks when Reddit launches this on mainnet?
Won’t we just have another CryptoKitties moment? https://t.co/XgPFETtSjw
— Brian Flynn (@Flynnjamm) May 14, 2020
Big for Crypto Nonetheless
While Reddit is not yet using the Ethereum manner, analysts believe this is big for the cryptocurrency and the entire industry more broadly.
Brian Armstrong, chief executive of crypto exchange Coinbase, lauded the effort in a series of tweets, calling this a real use case for cryptocurrency technology:
“For all the people who asked me “where are the use cases?” over the years, this is what it looks like. Lots of hard work by individuals, integrating crypto into real products. Slow incremental improvement, moving the ball one yard every day – there is no big bang moment.”
The industry executive continued that he thinks Reddit’s execution of this Ethereum token system is “really well executed,” before remarking that it’s a “model for other crypto startups to emulate for a token launch that helps bring an online community together, and delivers real value.”
Overall this is really well executed, and a model for other crypto startups to emulate for a token launch that helps bring an online community together, and delivers real value.
The internet finally has a native currency. It’s working folks!
— Brian Armstrong (@brian_armstrong) May 14, 2020
Photo by Christopher Gower on Unsplash