> Finally there is the issue of "circle jerking". Reddit is already notorious for its annoying and dangerous group think. Can you imagine if people could actually turn their karma into straight cash? The incentive will be even higher to simply echo back to the group what you think it wants to hear.

This was the first thing I thought about.

If you check /r/subredditdrama and /r/karmaconspiracy you can see literally hundreds of exemples where people go absolutely nuts for imaginary internet points: coordinate and downvote other people's content, mods with massive subreddit bans, etc. Can you think about what they will do for cash?