A Beginner´s Guide to Buying, Selling, Using, and Mining Reddcoin:
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The saying goes, “Too much of a good thing is a bad thing.” And with over 1,000 cryptocurrencies in existence, how can people tell the good coins from the bad coins? Since all cryptocurrencies share certain attributes, it can be difficult to differentiate one from another. The big two, Bitcoin and Ethereum, stand out if only for the fact that they have gained wider acceptance than the others.
Some have specific functions on blockchain platforms and can be used for purposes other than trading, investing, and hedging for a financial market meltdown. In this case, they function as tokens that “unlock” certain aspects of a proprietary platform.
Still others have specific purposes within mainstream life. One coin in particular, Reddcoin, is dubbed the “Social Currency” for the digital age because it can be used to interact with others on social media platforms like Facebook, Twitter, and Instagram. So what exactly is Reddcoin?
Reddcoin is a blockchain. Blockchains are transparent databases or ledgers which store a history of all transactions. They are like a giant record book that has an entry for each transaction that has taken place on the blockchain. Blockchains are by design decentralized--anyone and everyone has access to the blockchain, and it isn’t controlled or operating by a single, central authority. This means all users can audit its transactions.
Additional information about Reddcoin, including expanded definitions and explanations, can be found on its Reddit page. Like most other cryptocurrencies, Reddcoin hasn’t made its way into academic circles and printed media, so deeper research must be conducted online.
At present, Reddcoins cannot be bought directly with a majority of fiat currencies like other coins can. Instead, users must register a blockchain wallet--a digital wallet used for storing cryptocurrency assets--with an exchange like Bittrex that has a market for Reddcoin. Next, they must fund the account with cash or with a credit card. From there, they can buy Bitcoin or Ethereum and then exchange these coins for Reddcoins.
However, those that deal with Euros can purchase Reddcoins directly through the exchange LiteBit.eu. The market is much smaller than that of Bittrex, but users have the option to purchase Reddcoins without have to make a prior cryptocurrency conversion. Those that want to purchase Reddcoins in another fiat currency like pounds or dollars must follow the process described above.
To cash out from a Reddcoin position, users must follow the reverse process of the steps outlined above. The process will be different depending on the fiat currency one wants to withdraw. For currencies other than Euros, users must first exchange their Reddcoins for another cryptocurrency. Then, they must turn that cryptocurrency into the fiat currency of their choosing. Once the exchange has been made, users must transfer the funds to their traditional bank account, where the money can be withdrawn from an ATM in cash.
Those that are dealing in Euros can buy and sell Reddcoin as they please. When one wants to fully close out a position, they can sell their Reddcoins in exchange for Euros, and then transfer the money to their bank account. From there, the funds can be withdrawn from a bank or ATM.
Like its peers, Reddcoin can be utilized as an investment. Many view cryptocurrencies like Reddcoin as a worthy option because of their decentralized nature. Reddcoins are not controlled by a central bank whose policies can affect things like exchange rates, and thus can be thought of as a type of hedge against central bank policy decisions.
There are typically two strategies associated with investing in cryptocurrencies. The first is to follow a buy and hold strategy, betting upon long term appreciation in the coin’s price. The other is to trade the coin more actively, attempting to predict price dips and profiting on short term run ups. Either way, the objective is to increase value by buying low and selling high.
Another use that is unique to Reddcoin is its function as a social currency. Reddcoins can be sent to other users on social media platforms where content is created, shared, and delivered. The blockchain platform allows people to send money to one another seamlessly to anywhere in the world. The transactions settle extremely quickly, allowing for a “real-time” experience. Additionally, Reddcoin transfers are completely free of fees for both senders and recipients.
Reddcoins are used primarily as incentives or tips from content receivers to content deliverers. For example, if someone sees a post or YouTube video they enjoy, rather than “liking” or “sharing” the post, they can send the creator a small tip in appreciation for their work. Reddcoin is pioneering the idea of “micro donations” to incentivize content creators to keep putting out quality material.
Conversely, content creators can tip their social media followers in Reddcoins to show appreciation for their support and viewership. The goal is to foster a closer relationship between content creators and content viewers, no matter where they are in the world.
Cryptocurrency mining is the process of verifying the transactions that take place on a blockchain and subsequently adding them to the ledger. The concept is simple, though the process usually takes a large amount of computing power. A given set of transactions, called a block, has a set of tasks associated with it that must be solved. Once a block has been “solved,” it is added to other blocks, forming a blockchain.
Miners are compensated for their efforts with cryptocurrencies, typically that of the blockchain they are mining. They have the choice to mine solo or mine in a group called a mining pool. Mining solo yields a higher profitability percentage, but mining in pools means more computing resources to complete harder, higher reward tasks.
Miners, both individuals and pools, can use mining calculators to determine the profitability of given block. These calculators also take into account the computing power needed to complete a job, so they are a helpful tool in determining suitability and feasibility. Reddcoins differ from other cryptocurrencies because they are not mined in a traditional sense.
Reddcoins cannot be mined by design. Instead, Reddcoin follow their own protocol called Proof-of-Stake-Velocity, which is a new algorithm designed to replace traditional mining. The difference from traditional mining methods is that in order to increase the chance of finding a valid block and receiving rewards, all one has to do is hold a bigger stake of Reddcoins. As long as a user keeps their wallet running and connected to the internet, they can participate in the “mining” process.
The process is more accurately called “minting,” as new coins are minted rather than mined. All a user has to do is leave their Reddcoin wallet online and have it unlocked. Once this is done, the staking process begins, and users will begin earning additional coins--it is automatic. The more coins in one’s possession, the quicker additional coins are added. Total market weight grows exponentially.
Reddcoin blocks are currently generated at ten times the rate of Bitcoin blocks. Thus Reddcoins have ten times the transaction processing power of the Bitcoin blockchain. Reddcoin’s rapid transacting speed makes it ideal for global transactions and tips, and should increase its usability and therefore its value--as its price chart shows. There are no current plans to scale the blockchain further, but it could be on the horizon as social media use continue to grow.
Reddcoins serve a unique purpose within the blockchain community. While they share certain qualities with other cryptocurrencies, they can be used specifically as a social currency on social media platforms. They incentivize content creators to publish more material and can be used as a “thank you gift” from creators to their followers. The long term goal is to foster deepening global relationships--all based on blockchain technology.