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Reddit received investments of $50 million that wll be used to create its own cryptocurrency for rewarding the site users.
Social networking service and news website Reddit announced it has raised $50 million from a number of venture capital funds and capitalists. The funding will enable Reddit to give back to the community with its own digital currency.
The funds were received from Sam Altman, Y Combinator startup incubator president, PayPal co-founder Peter Thiel, Andreessen Horowitz partner Marc Andreessen, singer and actor Jared Leto, hip-hop star Snoop Dogg and Reddit CEO Yishan Wong.
Notably, all of these investors agreed to donate 10% of the round’s fundings to give back to the community. This amount will possibly increase in the future.
Wong noted the move shows the central role the digital currency community plays in Reddit’s success and commented on the company’s future plans.
Speaking to CoinDesk, Wong only said: “We’ll have more to announce in the future.”
Reddit is not the only company that announced its plans to experiment with the emerging technology. Similar statements were made by Overstock in July.
Mr. Wong wrote on the r/blog subreddit that the company may develop a special-purpose digital currency in the future and the project would be backed by the shares’ value created during the funding round. The investors had “explicitly agreed” to the concept, although Wong warned that the project “could totally fail.”
He said: “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 the idea will provide potential benefits for the site users, still, he added that the idea is in the initial exploration phase.
Some investors who participated in Reddit’s $50m funding round would definitely be receptive to the use of block chain technology by the company.
Y Combinator has worked with bitcoin before. It hosted bitcoin services provider Coinbase and bitcoin ATM developer BitAccess, among hosting other digital currency startups.
Andreessen Horowitz has also invested in the bitcoin startups earlier and PayPal co-founder Peter Thiel called bitcoin “could become a new phenomenon”.
Wong noted that a range of investors Reddit has attracted demonstrate its long-standing commitment to free and open speech on the Internet.
He 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.”