Such systems are prone to political effects. For example, a pop song would get much more upvotes than a genuine discussion. Over time intellectuals leave because of the noise.
I obviously have no idea how this will pan out, but it's just far too exiting to not just try.
Edit: Our idea is really to "give bitcoin to the people who provide value". Nothing is set in stone yet, but our current thinking is that there are two ways to provide value in a Reddit style system: submit new content or upvote valuable content. We want to find a fair way to pay rewards in both cases.
I don't agree. You're going to have different communities, just as reddit does now. Intellectuals are (likely) not going to be posting in /r/I-love-taylor-swift; they would post to their own communities as they do now. If you're concerned about what makes it to the front page, you use a different algorithm than reddit uses. Or, better yet, you allow mods (or even users) to customize the algorithm their subs use.
Ultimately I think it is wrong that people put so much effort into social media and do not get rewarded for it in a meaningful way (and no, I don't consider a "like" or an "upvote" a sufficient reward). If we could find a way to reward people monetarily for producing and finding valuable content, that might lead to a huge increase in quality.
I have this theory for how companies could be built: look for where value in transferred on the internet (for example if someone watches a video on YouTube, value is transferred from the video producer to the viewer); then send bitcoin in the other direction. This model seems much more efficient to me compared to today's model where the value from the content consumer to the content produces is transferred through a sequence of intermediaries (social media sites, advertisers, advertising networks) that all take a cut.
Obviously one needs to think about the incentives for all actors, I do not think that donation based networks will work because there is really not much incentive to donate.
Already built. The front page algorithm section at valME.io allows you to select reddit's as the default [1] or choose your own customizations (include NSFW, max hours to evaluate post, num of posts on front page, num of karma by karma type and weightings, OP's karma balance and weighting, OP num of comments, post views, OP age, num of OP flags, etc.)