I get why CC might seem like nonsense. But I see it as a necessary fix during the transition to noncustodial wallets.

Stacker News used to be a custodial wallet, but I heard there were legal risks, so they switched to a noncustodial model. In my opinion, CC is more like a workaround to address the issues that came up during this transition. Without CC, the failure rate for zaps would be much higher. After all, for a zap to go through, both the sender and the receiver need to have their wallets properly set up. You can imagine that when they first switched, the percentage of users who had set up wallets was probably pretty low. That might’ve caused zap activity on Stacker News to drop significantly.

With CC, at least in some situations—like when a wallet isn’t set up—users can still receive zaps as CC.

When it comes to spending bitcoin on SN, CC works as a substitute in most cases, like posting, commenting, or tipping. But CC can’t be withdrawn as bitcoin. My guess is that this was a deliberate choice to avoid legal risks. Otherwise, if CC == bitcoin, Stacker News might still be classified as a custodial wallet.

When we spend CC, part of it goes into a reward pool. During the daily reward distribution, the CC in the pool is converted back into bitcoin and shared with qualified users. This is the only way for CC to turn back into bitcoin.