What is better to use for baking in an incentivized viral loop into my website, having users "share" on social media or using a "referral" system?

Those two things are not mutually exclusive (you can do both). Can you give more information?

I like the fact that you've considered the reward system for sharing, although I'm not sure why it would have to be one or the other.

There's really no downside to offering share functionality but I've seen many cases where it's just an afterthought that's there if someone wants it, but doesn't really offer any incentive to do so.

I like it when people prompt sharing with some of the work already done, such as "Tweet this: Here's 140 Characters already setup for you" (my words). It provides some context for what you'll be sharing, and if you're active on Twitter, just does a nice job of teeing up the reward (feeding your Twitter feed beast).

On the referral ID side, how about offering some sort of immediate benefit just by making their first share? Like offering $5 credits (I'm making up a number) just for sharing. Sure, you'll get some people that take advantage of the system, but you'll also get people actually helping share the word.

Happy to answer more questions around specifics.

Great question. My humble opinion is that sharing really only helps or use visibility. You have to consider the web and mobile web especially to be a sequence of steps. If they share, then what happens?

What do hey get out of sharing? Does the sharing benefit you or them? How can they tell there is value in sharing and if there is value, how do they experience it?

LinkedIn is a true example of a referral system that works by network effect. It's very clear for a user to see how she benefits from referring people to use it. More people for her to connect to. More opportunities for a career benefit. In fact, the incentivizing is built right into the media.

I'm happy to talk about this more. Let me know how I can help. Just remember that customers need two really important things. They need a reason to change current behavior and they need an example to show how changed behavior benefits them. Every new app or business on the web is an opportunity to choose.

It is necessary because social interaction is one of the major benefits, for which people use the social media platforms. The social media enables people to interact with each other using the universally accessible and scalable communication techniques that are available today, in the form of websites and the mobile phones.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath