Why should we change anything?
All wealth and human resources come from our one shared world. We have created a world of plenty for some of us, yet billions of people suffer without the basic necessities of life.
Everyone of us should have enough food to eat, water to drink, and access to education.
No reasonable outside arbiter would ever condone the existing inequality in the world. It is so obviously flawed, unfair, and nonsensical.
How unequal is the existing financial system?
According to the 2017 CS Global Wealth Report:
The wealthiest 1% of the world's population now owns over 50% of the world's combined wealth.
The poorest 50% of the world's population, owns under 1%.
What is wrong with the existing financial system?
For most of modern human history, money has been controlled by local strongmen. Kings, warlords, and, nowadays, our national governments have forced us to use their money to conduct commerce.
The existing monetary system is top-down, centralized, and unfair.
Governments permit their central banks to magically create new money.
The central banks then cheaply lend or give this brand new money to the private bankers.
The private bankers then lend, somewhat less cheaply, the new money to already-rich people.
Everyone greedily grabs everything they can as the money slowly trickles down through the system.
By the time it reaches the bottom, there is hardly any left.
How could a better financial system be built?
When brand new money is created in the world, we proposed that it should be distributed equally to all people on an ongoing basis. Instead of the existing system where brand new money inefficiently trickles down through the economy, it could instead vigorously grow up from the bottom, creating more wealth, opportunity, and equality for all.
This is not a redistribution of money, but simply distributing new money fairly the very first time around, at its genesis. It makes no sense to give brand new money primarily to those people who already have the vast majority of it.
How could equitable distribution be ensured?
In order for equitable distributions to be possible, we need all humans to have access to some sort of unique identifier. Everyone must be eligible for exactly one account. This system must be open to all people regardless of their circumstances, nationality, religion, gender, address, or anything other than the fact that you are a unique human being.
We are working with both BrightID and the Kuwa Foundation to help create decentralized, permissionless, self-sovereign identity systems that could serve this role.
What is decentralized, permissionless, self-sovereign identity?
An ideal identity system is open to everyone and controllable only by the identified individual.
Decentralized - meaning that no one entity is in control of the information or the system. The system would run in parallel across many nodes to ensure robustness and avoid censorship.
Permissionless - a user does not need permission from any authority to access the system. Everyone is welcome and no actor can prevent a user from joining.
Self-sovereign - each user has control over their own information. The system is voluntary. A user chooses what information they want stored, shared, and or deleted.
What about people trying to scam the system?
The network will have to constantly work to ensure each account is controlled by a unique human being. Attempting to obtain more than one account on a system like this is often referred to as a 'Sybil attack'. Fighting Sybils will be an endless cat and mouse game. The identity systems that we are exploring are purpose built to combat these sort of attacks. Assuming most users of the system are honest, we believe the network will be able to stay ahead and keep fraud to a de minimis level.
How would people use this crypto-UBI?
The primary and easiest way to use most cryptocurrencies is with smartphones. Even the very basic inexpensive models can be used for a wide variety of cryptocurrency transactions. Ideally, both parties to a transaction have an internet-connected device, but technologies exist that enable some crypto transactions when only the receiving party has access. While functionality is limited, some cryptocurrencies can also be used by older style feature phones. Mobile access is not yet omnipresent, but over 5 billion people have access to mobile phones and over 2.5 billion have access to smartphones. Service providers are racing to provide better service throughout the world and handset prices continue to fall. Disbursements of UBI will help grow this access even faster.
I heard Bitcoin is wasting all the world's energy. Won't this be ever worse?
It is true that network running the Bitcoin Proof-of-Work (PoW) uses a tremendous amount of energy. It is important to understand that blockchain technology does not inherently require using a lot of energy. There are many other consensus algorithms such as Proof-of-Stake (PoS) and second layer protocols that are extremely energy efficient. The industry is hard at work developing and optimizing secure, scalable, and energy efficient systems that will be used in the future.
Who pays for all of this?
Unlike the small, underfunded, too-short, and not 'universal' fiat UBI programs that have been tried before, no 'one' has to pay for a crypto-UBI program. It is not funded by the collection of taxes nor does it require donations. Just as central banks today print fiat money, the crypto-UBI comes into existence at no cost. (But unlike the central banks, the new money production is formulaic, equitable, and consistent.) The only cost is that we the people need to start believing it has value and accepting it in exchange for goods and services. Like any other form of money, as long as a growing group of us believe it has value, then it indeed does.
Why would it have any value?
At the beginning the value will be small by the standards of wealthy people, but given the depth of extreme poverty, even pennies a day can start making a difference to billions of people on earth. As conditions improve for them, their productivity will increase and economies around the UBI can grow for all recipients.
Since crypto-UBI will be freely distributed, many people will have them.
As more and more people have any given currency, it is easier to use it.
The easier it is to use as money, the more people will choose to use it as money.
If it is used widely as money, it will come to have value.
This sounds all fine and good, but can you give a real world example?
Imagine you drive a truck full of nutritious food, clean water, and hygiene supplies into a poor village that has never heard of these UBI tokens before. You start explaining to people how the UBI token system works and offering to help them set up accounts. People may be reluctant at first, but eventually a few people sign up. You then offer to sell them some of the food from your truck in exchange for their new tokens. They may still be a little confused about what just happened, but they are happy to have the food. You invite them to come back tomorrow and to bring their friends.
A few days later, 50 people have signed up for UBI tokens and purchased all of your supplies. You leave the village with an empty truck, a cellphone full of tokens, and a promise to return soon with more provisions. The excited villagers are eager to become your new paying customers.
When you return to the village again, the sales process goes much faster. Many people are already signed up and understand the exchange process. People are starting to see these tokens as a form of money. Before you return a third time, one young entrepreneur has realized the opportunity and offers to do other families' laundry in exchange for tokens. Suddenly, there is more than one thing that people in the village can do with their tokens.
By the fourth visit, another villager offers to repair leaking roofs and a local shop owner starts offering a few items for sale for tokens. More and more villagers begin offering to do work or provide goods in exchange for tokens. As the village economy starts to grow, everyone begins to benefit. Eventually, you might even have to lower the token prices on items from your truck to stay competitive with all of the other competing options people have for spending their tokens.
Some of the entrepreneurs seize the growing economic opportunity by offering to pay their neighbors to come work in their businesses in exchange for tokens. This creates employment in the village and the increased production of profitable goods. As more and more of the villagers have good work to do, the lives of all are enriched. Tokens are moving around between people and lifting the entire community. One day, one of the villagers decides it is time to bring this movement to the next village. She borrows tokens and goods from her community and then fills her own truck with basic supplies. She drives to another village an hour away that has never heard of the UBI tokens. She explains the token system to the villagers and the process starts anew. Every time new members join, the system is strengthened and the tokens become a bit more useful and valuable to everyone within it.