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Fred Wilson: The Next Reddit Will Likely Be Built on the Bitcoin Blockchain

It may be that there is no viable middle ground between a centrally controlled and an entirely decentralized media platform.

Vjeran Pavic for Re/code
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

To say Reddit is going through some growing pains would be an understatement.

The company has struggled for a while with if, when and how to censor content on the site, as it tries to build a real business backed by venture capitalists, all while trying not to alienate the huge community of people who help power the site. And now it has a new saga on its hands after protests by scores of the unpaid moderators who help run the site took down some of the media platform’s most popular sections this past week.

Well, prominent venture capitalist Fred Wilson thinks he has a solution, as he wrote in a blog post titled “The Decentral Authority” that he published today.

“It may be that there is no viable middle ground between a centrally controlled media platform and an entirely decentralized media platform,” he noted, referencing the type of entity he believes Reddit is becoming versus the type of platform many of its users want it to be. “You are either going to police the site or you are going to build something that cannot be policed even if you want to.”

That uncontrollable site is coming, he says, and will “most likely will be built on the blockchain.”

What’s the blockchain, you ask? “Essentially, just a record, or ledger, of digital events — one that’s ‘distributed,’ or shared between many different parties [or computers],” Guardtime CEO Mike Gault explained in a guest post published on Re/code today. “The bitcoin blockchain contains a certain and verifiable record of every single bitcoin transaction ever made.”

Wilson doesn’t go into many details about how a blockchain-powered media platform would work. But the gist seems to be that a media platform built on top of the blockchain would not need a company to manage it because the network of people or computers that confirm each blockchain entry would collectively serve that function.

Wilson said his firm has seen a bunch of entrepreneurs working on such an idea and that he believes the blockchain technology is now sophisticated enough to support such an initiative. Ryan X. Charles, a bitcoin engineer who worked at Reddit for a short period of time, laid out some details on how such a decentralized media platform could work in a blog post today.

The way a decentralized reddit works is like this. Each user has an app, the reddit app, which connects to the reddit p2p network. For most users, the app is a normal web app. Each user funds their own app with a small amount of bitcoin. In order to download content, the user pays a very, very small amount of bitcoin to the peers on the network. This incentivizes people to keep the app open so as to keep servicing the other users. Furthermore, when a user upvotes content, that sends a small amount of bitcoin to the author of that content, thus incentivizing the production of good content. If all the content is authenticated, we can be reasonably sure most payments are going to the right people.

In this scenario, reddit, Inc. still exists, they just don’t have a monopoly on the hosting of reddit content. Instead, anyone can run the app to host the content, and reddit, Inc. is just the biggest service provider. Any user can run a business by running the app full-time. Any user, including reddit, Inc., can censor content they themselves deliver to other users, but cannot censor content other users send to other users.

There are some caveats. First, Wilson’s firm, Union Square Ventures, has invested in several bitcoin- and blockchain-related startups, including Coinbase and Onename. So you could make the argument that Wilson and his firm would love to see winning ideas come out of this space because they could financially benefit from them. (At the same time, Wilson has long been one of the loudest bitcoin supporters.)

Separately, there are a whole host of new questions and risks that may arise when you consider a giant media platform with no central authority over it.

But with big bets on some of the biggest tech innovators of the last decade in Twitter, Tumblr and Etsy, when Wilson speaks, many smart people listen.

“To be clear, this does not mean the end of Reddit or Twitter or any other of the current media platforms that are out there,” Wilson writes.

“But there is also a very interesting opportunity to build a truly decentralized media platform,” he added. “I am not sure it will be a good business. I am not sure it will even be a business. But it can be a very powerful community and platform.”

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