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Reddcoin (symbol: Ɍ, code: RDD) is a peer-to-peer open source cryptocurrency derived from Litecoin that seeks to be fully integrated into all platforms of social media. The stated goal of Reddcoin is to become “the social currency that enriches people’s social lives and makes digital currency easy for the general public.” [1] It was introduced January 20, 2014 and officially launched February 2, 2014.[2] Currently, Reddcoin is experiencing growth on social media platforms reddit, Twitter, and Twitch.tv among others as a digital tipping currency. Reddcoin was originally designed to have a hard cap of 109 billion coins, with approximately half of these being mined by the end of 2014 through a Proof of Work (PoW) system. On April 29, 2014 it was announced that Reddcoin would transition to a brand new Proof of Stake Velocity (PoSV) algorithm beginning mid-to-late Q3 2014, and would have a permanent 5% annual inflation rate. At the time of transition to PoSV, it is expected that there will be approximately 27.5 billion Reddcoins in circulation. As of May 5, 2014, over 22 billion Reddcoins have been mined.

History

Reddcoin was announced on January 20, 2014 as a Scrypt Proof of Work digital currency via an Initial Public Coin Offering (IPCO).[2] The IPCO aimed to raise Bitcoin to fund the development of a new social-media-centric currency in the mold of Bitcoin and Litecoin. With an originally intended cap of 109 billion Reddcoins eventually in circulation, Reddcoin was conceived to be a less expensive cryptocurrency to facilitate social media interactions between users around the world. Over two stages, the IPCO successfully raised 168.83 Bitcoins (over $100,000 USD) from 386 investors in exchange for 5.45 billion Reddcoins to support the Reddcoin development team in creating, promoting, and building the Reddcoin brand and infrastructure.[4][5]

Originally launched with a logo featuring a red alien mascot on a gold coin,[6] a design competition was held for a new community-chosen Reddcoin logo shortly after launch. After three rounds of voting, the current logo was chosen by an overwhelming majority of voters. The new logo is designed to look like a coin jar (or piggy bank) with a red coin being placed in the jar as if being tipped. This logo incorporates the colors red, orange, yellow, green, and blue, representing many of the most popular social media platforms today. As part of this rebranding, the official Reddcoin motto was changed from “The Coin of the Internet” to “The Social Currency”.

In February 2014, the Reddcoin development team announced that ReddAPI, a Reddcoin Application Programming Interface (API) was in development. Beta testing for this API began April 1, 2014, and the official ReddAPI was launched April 5, 2014. ReddAPI is designed to enable easy interfacing between Reddcoin and developer projects. One state purpose is to enable easy sending and receiving of Reddcoin for vendors and content creators. On April 6, 2014 a development contest was announced seeking the best applications utilizing the ReddAPI. The winner of the contest will be voted on by the Reddcoin reddit community and announced by June 7, 2014.

Reddcoin experienced its first test of resilience on March 9, 2014 when a flaw in the source code governing the Reddcoin blockchain was exploited and the Reddcoin network was temporarily taken offline. Within 24 hours, the source code was repaired and the Reddcoin network was restored.

On April 29, 2014 a major announcement was made on the Reddcoin community subreddit that Reddcoin would transition from Scrypt Proof of Work to Proof of Stake Velocity. Proof of Stake Velocity was a brand new algorithm designed to secure the Reddcoin network and was derived from Proof of Stake, first utilized by digital currency Peercoin.[7] This new algorithm was developed to protect the future stability of the Reddcoin network, reduce the environmental impact of securing the Reddcoin blockchain, and encourage active participation and transactions amongst Reddcoin users.[7][8]

To date, Reddcoin continues to build interfaces with social media services. Tipping platforms have been developed for Reddit, Twitter, Twitch.tv, and Justin.tv. Future plans call for further integration with additional social media services as Reddcoin continues to grow.

The Social Currency

TipReddcoinWeek Banner

Reddcoin was conceived to be a digital currency aimed at bringing cryptocurrencies to mainstream social media and the general public.[9] While modeled after Bitcoin and other alternative cryptocurrencies, Reddcoin’s focus was not immediately on an accumulation of wealth, but rather on achieving a wide distribution of Reddcoins across many social media platforms. The concept called for Reddcoin to become the quintessential online tipping currency. Reddcoin users have begun attempting to realize this mission through tipping campaigns on Twitter targeting journalists with backgrounds in cryptocurrencies and well as Bitcoin and Altcoin enthusiasts with large social media followings. In addition, Reddcoin reddit users are known to tip Reddcoins in appreciation of posts and comments on both the Reddcoin community subreddit and other public subreddits. Similarly, tipping campaigns have been conducted in appreciation of new content posted by users of Twitch.tv and Twitter. These tips are often the way that new users first become familiar with Reddcoin.

Social Media Unit of Account

As part of the whitepaper announcing the new Proof of Stake Velocity algorithm, Reddcoin lead developer Larry Ren (Reddit user /u/laudney) argued that a unit of account was needed for human social interactions.[7] Ren specifically cited the many various forms of showing appreciation for user-generated content on social media, including Likes, Shares, Retweets, and Replies, as measurable yet incomparable yard sticks for comparing social interactions across social media platforms.[7] Reddcoin, Ren stated, was created to fill this gap as a means of universally accounting for human social behaviors while adding a financial realization to these interactions.

Reddcoin Broadcast

As part of Reddcoin’s goal of entering mainstream social media, the Reddcoin development team introduced Reddcoin Broadcast on April 13, 2014. Reddcoin Broadcast is a Thunderclap-like platform for spreading messages across social media services including Facebook, Twitter, and Tumblr. Reddcoin users and community members can use Broadcast free-of-charge to expand the social media outreach of Reddcoin Developer-approved causes and solicit support for their causes from the Reddcoin community.

Technical Information

Launched February 2, 2014, Reddcoin was developed as a fork of the Litecoin open-source project, as utilized the same Scrypt Proof of Work algorithm for securing the Reddcoin blockchain and verifying Reddcoin transactions. The blockchain has a block reward time of 60 seconds, compared with 10 minutes for the Bitcoin network and 2.5 minutes for Litecoin. This places Reddcoin’s block time on par with Dogecoin and other alternative cryptocurrencies. After an initial bonus reward period, Reddcoin was designed to have a block reward of 100,000 Reddcoins for the first 500,000 blocks, or roughly 1 year. After this point, the reward would be cut in half for the next 500,000 blocks, and repeated after each subsequent 500,000 blocks. This forms a geometrically decreasing series with a finite total number of Reddcoins of just over 100 billion coins.

Former Proof of Work Block Schedule

Block Phase Block Numbers Per Block Reward Date of First Block Expected Coins Produced Expected Total Circulation (Approx.) Genesis Block 0 10,000 -- 10,000 10,000 IPCO Pre-Mine 1-10 545,000,000 -- 5,450,000,000 5,450,010,000 Bonus Reward 1 11-9,999 300,000 February 2, 2014 2,996,700,000 8,446,710,000 Bonus Reward 2 10,000-19,999 200,000 February 9, 2014 2,000,000,000 10,446,710,000 Bonus Reward 3 20,000-29,999 150,000 February 16, 2014 1,500,000,000 11,946,710,000 30,000-499,999 100,000 February 23, 2014 47,000,000,000 58,946,710,000 1st Halving 500,000-999,999 50,000 January 15, 2015 (est.) 25,000,000,000 83,946,710,000 2nd Halving 1,000,000-1,499,999 25,000 December 29, 2015 (est.) 12,500,000,000 96,446,710,000 3rd Halving 1,500,000-1,999,999 12,500 December 10, 2016 (est.) 6,250,000,000 102,696,710,000

It was announced on April 29, 2014 that Reddcoin would transition to an accelerated block schedule that would reduce the total number of mined Reddcoins to less than 30 billion Reddcoins.[7][8] After this accelerated schedule, a new block reward system would be used in which the total number of Reddcoins in circulation would experience a permanent 5 percent annual inflation rate.[8] As part of the announcement of the change, it was revealed that Reddcoin would transition to a new algorithm Proof of Stake Velocity sometime after three to six halvings. This places the date of the transition to PoSV between August 23, 2014 and December 8, 2014. This loose timeline allows the Reddcoin development team time to implement all changes required to smoothly transition from Proof of Work to Proof of Stake Velocity. Additionally, the Reddcoin development team has pledged to use this time to allow the newly created PoSV algorithm to be vetted by the public as part of the open-source nature of the Reddcoin project.

New Proof of Work / Proof of Stake Velocity Block Schedule

Block Phase Block Numbers Per Block Reward Date of First Block Expected Coins Produced Expected Total Circulation (Approx.) Genesis Block 0 10,000 -- 10,000 10,000 IPCO Pre-Mine 1-10 545,000,000 -- 5,450,000,000 5,450,010,000 Bonus Reward 1 11-9,999 300,000 February 2, 2014 2,996,700,000 8,446,710,000 Bonus Reward 2 10,000-19,999 200,000 February 9, 2014 2,000,000,000 10,446,710,000 Bonus Reward 3 20,000-29,999 150,000 February 16, 2014 1,500,000,000 11,946,710,000 30,000-139,999 100,000 February 23, 2014 11,000,000,000 22,946,710,000 1st Halving 140,000-189,999 50,000 May 10–11, 2014 (est.) 2,500,000,000 25,446,710,000 2nd Halving 190,000-239,999 25,000 June 14–15, 2014 (est.) 1,250,000,000 26,696,710,000 3rd Halving 240,000-289,999 12,500 July 19–20, 2014 (est.) 625,000,000 27,321,710,000 Possible 4th Halving 290,000-339,999 6,250 August 23–24, 2014 (est.) 312,500,000 27,634,210,000 Switch to PoSV TBA- 3,125[8] TBA 5% annual inflation No limit.

Initial Public Coin Offering (IPCO)

When Reddcoin was first introduced, the development team introduced an Initial Public Coin Offering of 5.45 billion Reddcoins in exchange for Bitcoin from interested investors.[4][5][10] This money raised would be used to support in the development, publicity, and support of Reddcoin during and after launch.[4] Over the following weeks, 168.8347 Bitcoin was raised, or over $100,000 USD.[5] To prevent a large influx of Reddcoin to the trading markets after launch, the 5.45 billion Reddcoins were distributed to the 386 investors over a 90 day time span at 1.11% of the total to be received distributed to each investor each day, ending in mid-May 2014.[4] The distribution of these 5.45 billion Reddcoins was distributed among investors in a tangentially increasing investment distribution to encourage larger investments. Larger investors in turn receive a larger-than-proportional share of the IPCO Reddcoins.[4]

Proof of Stake Velocity

During the first half of 2014, the development of Application-Specific Integrated Circuit (ASIC) hardware for use in Scrypt mining led to an increasing arms race associated with Proof of Work mining. As a new coin still in its infancy, such developments could have resulted in a large centralization of mining power and prevented Reddcoin from reaching the widespread distribution necessary to achieve its goal of integration into social media. In response, Reddcoin lead developer Larry Ren announced the development of a new network algorithm Proof of Stake Velocity.[7] Modeled after Proof of Stake as introduced by Peercoin, Proof of Stake Velocity awards new block rewards based on coin age and coin velocity.[7] Like with Peercoin, coin age rewards holders of Reddcoin with a certain proportional share of newly generated Reddcoins with each block. Coin velocity introduces a new reward system complementing coin age by rewarding activity in the Reddcoin economy.[7][8] This activity includes both peer-to-peer transactions and maintaining the Reddcoin network by keeping a Reddcoin wallet online to aid in verification of transactions. Combined, block rewards for coin age and coin velocity are generated via a process known as minting. Reddcoin will utilize a 5% annual inflation model in implementing Proof of Stake Velocity.

Reddcoin Exchanges

In addition to receiving Reddcoin via social media tipping or by mining, Reddcoin can also be obtained through a number of online exchanges. Typically, users must exchange Bitcoin for Reddcoin, though some exchanges such as Prelude by Moolah offer exchanges of fiat currency (such as US Dollar) for Reddcoin as well. The largest exchange by daily volume has traditionally been Cryptsy, though other exchanges also share sizable trade volume.

References