What is ReddCoin (RDD)? The social currency turning likes into tips

ReddCoin has been around a long time, despite heading back to the drawing board. Is the future bright?

People using social media                                 
ReddCoin wants to empower social media creators and the communities that support them – Photo: Shutterstock
                                

Contents

Redd is a veritable old hand in the cryptocurrency space, with roots going as far back as 2014. The Redd system allows you to share, tip and donate on social media, and its designers want to empower content creators to monetise their engagements in a decentralised manner.

Redd operates as a 100% volunteer-based organisation, “whose members plan on showing people how our cryptocurrency, and supporting products, can be used to make their goals a reality”.

The ReddCoin (RDD), the native cryptocurrency of the ReddNetwork decentralised blockchain, is what enables this concept.

Despite being around for a while, the ReddNetwork lacks full functionality in its current iteration, and still suffers from scalability problems despite numerous redesigns. That said, there are some exciting new features on the cards, supported by a unique and innovative blockchain ecosystem.

So what is Reddcoin (RDD), how does ReddCoin work and what is Reddcoin coin used for? Keep reading as we go under the hood of the ReddCoin cryptocurrency…

What is the concept?

Redd wants to give value to creators, to “turn social media likes and hearts into real spendable money,” according to its Redd Book.

Although its vision is yet to become a fully fledged reality, the intention is to create a seamless way to tip your favourite social media creators in RDD coin, the native cryptocurrency.

ReddShare expands on the premise, allowing content creators to incentivise sharing through monetary rewards. For example, a musician might deploy their existing fanbase, giving them rewards in RDD coin every time they share a music video.

ReddShare is already available in a preliminary form, although Redd’s published statistics paint a pretty low uptake. Since launching in July 2021, 107 campaigns have taken advantage of ReddShare, earning sharers a total of 146,000 RDD – that is, just $146 in fiat terms.

What stage is Redd at?

The ReddNetwork is in flux. In its current state, Redd’s tipping services can be implemented on Twitter, Reddit, Twitch, Telegram and Discord, albeit only via the deployment of a bot. This convoluted system undoubtedly scares off the average content creator or fan.

Unfortunately ReddID, the previously available, user-friendly tipping system, suffered scalability problems and is now being rebuilt from the ground up.

The ReddMobile app is being designed in conjunction with this, which will hopefully bundle all of Redd’s products together in a user-friendly fashion. 

A mock-up of how the ReddMobile app might look for end users – Photo: Reddcoin.com
Mock-up of how the ReddMobile app might look for end users – Photo: reddcoin.com

Redd also has entrepreneurial ambitions through its ReddFoundation. The mission statement reads: “As Redd looks to push [its] message of global inclusion and personal empowerment, the project plans to start a self-funded organisation to help facilitate positive change in the world and give back to those who have done so much for humanity.”

As per the roadmap, none of these products has been given a definitive release schedule, so it is unclear if and when the full potential of the ReddNetwork will come to fruition.

How and where can I tip with ReddCoin?

In its current state, Reddcoin only has limited functionality. If you want to implement Redd in order to be tipped, you can install the ReddBot on Twitter, Reddit, Twitch, Telegram and Discord. That means, of course, that the two major social media platforms for content creators, Facebook and Instagram, are not supported.

As a tipper, do not expect to see many instances of ReddCoin being deployed in the wild. Since ReddID has returned to a development phase, there is very little ongoing uptake.

ReddNetwork: details on the blockchain

Because the ReddNetwork blockchain was originally forked from Litecoin, transaction times are impressive. BitInfoCharts calculates a 58.9 second average block time, which is actually quicker than Redd’s own target of 60 seconds, and more than 10 times the speed of the Bitcoin blockchain.

Transaction fees are essentially zero, and a percentage of ReddCoins generated by the network go to charitable endeavours.

One of the most exciting aspects of the ReddNetwork blockchain is its PoSV consensus method, which was created by Redd developers before the launch eight years ago. PoSV encourages the active trading of RDD while disincentivising hoarders.

What is PoSV?

Redd’s Proof-of-stake-velocity (PoSV) consensus method for the ReddCoin cryptocurrency has been used to secure the network since its implementation in 2014. It differs slightly from the more widely adopted proof-of-stake (PoS) method.

The differences between PoS and Bitcoin’s proof-of-work (PoW) method are fairly straightforward: Rather than, as in the PoW method, rewarding immensely energy-intensive, specialised computing rigs that “solve” transactions, PoS allows essentially any holder of a coin to validate on-chain transactions, earning rewards proportional to the value staked.

That way, the energy used for validating transactions is directly linked to the amount of currency held, eliminating Bitcoin’s arms race as more and more and more powerful rigs compete for rewards.

PoSV was invented to tackle a major drawback of the PoS method, by eliminating the incentive for hoarding. Since larger rewards of ReddCoin cryptocurrency are distributed to larger wallet sizes, the PoS method restricts trading velocity: why get rid of something that is earning generous passive income?

By introducing the velocity metric in staking rewards, the PoSV method encourages frequent RDD trading among holders. And as we all know, a more actively traded currency is a healthier currency. Not to mention that RDD is a social currency, after all.

How Redd determines velocity is deceptively simple. An algorithm assesses the “coin age” and transaction frequency of your wallet, and adjusts staking rewards accordingly.

Passive income

So should you buy a bunch of RDD and start earning massive rewards? There are a couple of factors to consider first.

While Redd claims that “the blockchain will reward you with up to 25% annual returns on your holdings,” the market tracking platform Messari calculates a real staking yield of 11.29%. That is still quite a healthy return, though: Cardano, for instance, currently has a 1.65% yield. Return on investment (ROI) also seems to be increasing year-on-year, and is currently up 65.44%.

But considering that RDD is trading at $0.001, you would need to stake an awful lot of tokens to gain any noticeable ROI income. And don’t forget that trading velocity directly impacts your returns. 

Furthermore, staking rewards reduce in line with the total volume of staked coins, so hoarding massive supplies is essentially an own goal. The participation level as of 6 December is 29.21%, a very low number and likely the reason for high ROI.

That is not to say that you should not stake: it is passive income after all, and with the click of a button on your wallet, you can start earning and increasing your wallet size. Also, if you believe in the Redd project, you will get a good feeling from helping to secure the network.

Note that staking is currently only available on desktop; mobile staking is in the process of being developed.

ReddCoin’s tokenomics

RDD’s initial coin offering (ICO) dates all the way back to 2014, when 5.4 billion coins were sold, raising $100,000 in value.

Being a social currency, almost everything about the design of ReddCoin is there to promote trading velocity, from the PoSV method to its inflationary tokenomics model.

Redd aims for a 5% year-on-year inflation of RDD to encourage spending, further reducing the incentive to hoard.

So why is the 24-hour trading volume so scarily low?

Against a market capitalisation of $58.36 million (RDD is currently number 557 on the ranks), only $122.7k was traded over the latest daily period, a mere 0.002% of market cap. For what is touted as a social currency, this could be seen as a worrying figure.

Not so, according to project leader Jay ‘TechAdept’ Laurence. He told Currency.com: “ReddCoin is primarily and foremost a utility coin, a coin with an actual purpose, with apps that require RDD to operate. That tends to be somewhat rare in the current environment, and our goal as a project has always focused around utility and building value through that usability and the apps it enables.

“Trading and the speculative aspects have always been intentionally allowed to develop organically in our ecosystem so as to help preserve the ‘utility’ classification and avoid any appearance of manipulation.”

One likely reason for the low figures is that the Redd Network is only operating at partial functionality. Once ReddMobile becomes a fully functional app, enabling users to tip, share and donate at the click of a button, hopefully user uptake will rocket, bringing trading volume, and RDD’s value, up with it.

Where next for Redd?

Laurence hopes to expand the utility of ReddCoin. He said: “We have entered into a number of interesting partnerships to expand RDD's footprint to things like robotics and factory automation, and that's another aspect where RDD shines, as a fast, free, crypto with all the benefits of BTC code and a number of unique improvements.” 

With news that Twitter will now allow bitcoin (BTC) tipping, is market competition a major concern for Redd’s future plans? Laurence believes that since ReddCoin is tailored to tipping, the proof is in the pudding. “We look at things like the perception of receiving a tip of .000000X of something, verses 10 or 100 of it. Psychologically, it's a different experience,” he said.

And as for transaction fees? “Our largest fees, which usually don't apply, are .0001 RDD/Kb. That's ten-thousandths of a penny for any sized transaction, again noting that most of the time, it's flat-out free. That seems to be of concern when withdrawing and sending those Twitter BTC tips anywhere outside their platform.”

As already mentioned, ReddCoin engagement is very low right now. Redd’s next major hurdle is to get the ReddMobile app up and running and ReddID fully integrated into all major social media platforms, which is the plan for the first half of 2022. Then, hopefully, the exciting potential of this innovative blockchain will be realised.

FAQs

There are currently 30.397 billion RDD in circulation, with a target inflation rate of 5% year-on-year.

ReddCoin was originally developed by software developer Jonathan Patenaude.

Today, the large global team is headed up by project leader Jay ‘TechAdept’ Laurence, technology evangelist John ‘CryptoGnasher’ Nash, operations leader David Faust, and design and brand strategist Michael Kirlew

The ReddNetwork blockchain is decentralised, with no central server or place of attack. There has not been a security breach since it was created in 2014.

Furthermore, the Redd Restitution fund has served to put lost crypto coins back into holders’ hands, should an issue occur – although this does not include unwise trading!

Although blockchain technology is largely unregulated, the ReddCoin is a legitimate cryptocurrency available on numerous exchanges.

Project leader Jay Laurence said: “As a secure, time-tested, and readily viewable open-source project based on equally proven bitcoin tech, there are no vulnerable smart contracts or financial gimmicks/lockup periods in Redd staking, only a single eight-hour maturation period for newly staking coins, and rewards are available immediately upon earning them, withdrawable within minutes.”

Because it was forked from Litecoin, ReddCoin deploys fast transaction times and zero transaction fees to provide social media users with a viable way of monetising social media engagement.

Laurence said: “Our ReddMobile/ReddID product is intended as the internet's ‘love button’, a way of acknowledging another's created value.”

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