Effectively correct. When you upvote, you give the writer a penny. (You can also tip them if you want to give them more.) The idea is to reward content providers who give value. There are all sorts of other tools in the site, some of which reddit doesn't have I believe (e.g., mods can run contests that give out karma which then turns into money, you can move communities within other communities, you can choose your own karma types). One might question the validity of your last statement though. After all, what's more stupid - posting content for upvotes that give you nothing or getting upvotes that are worth something? As a writer myself, I know which one I prefer. But enough about that. Did you like the article?
Yup. Well, bitcoin that is (the exchange they work with can also convert it to dollars if you want, but I think there's a fee). That's the whole idea. Why post stuff and then get nothing for it? For example, many, many years ago, I used to spend something like $90/year just for the WSJ alone. I cancelled it because it was so much propaganda crap. I would much rather reward someone for great content they write individually. $90/year is 9,000 upvotes - that's quite a bit of upvotes I'd be willing to give. So I hope the idea works, as I'd love to earn some money from my writing :) I'm glad you liked the article. But can content submitters cash out their karma for real money?