Can Basic Income Plus Blockchain Build a New Economic System?

This story reflects the views of this author, but not necessarily the editorial position of Fast business.

You may not have noticed it, but a huge global movement is on its way to create the next generation of the internet. This radical technological change is largely driven by a key innovation in database technology called the blockchain, and many forecasters predict it could bring about as much social transformation as the introduction of the World Wide Web twenty-six years ago.

What is a blockchain? In short, it is a disintermediation technology. In other words, it removes the need for intermediaries and trusted third parties. When combined with other technologies, blockchains have the potential to disintermediate many areas of life, from banking and information storage to voting, manufacturing and sharing of goods and services.

It’s tempting to use the word revolution, and many people do: A simple Google search returns 3.1 million results for “the blockchain revolution.” But that distorts the situation. In truth, what the blockchain offers is a rebirth.

UBI is a progressive idea whose time may be coming, but the devil is in the details. Most of this support is for a UBI based on government fiat currencies like the dollar or the euro. It’s almost exclusively locked away in a welfare framework – as a wage subsidy to deal with expected automation layoffs, or as a way to cut government welfare bills – in other words, a different way of dealing with problems in the current economic paradigm. Existing power structures continue to reign, debt creation still controls the money supply, and the logic of “infinite material growth on a finite planet” of extractive capitalism is left intact.

But what if the UBI was not delivered in dollars or euros, but in a cryptocurrency running on a blockchain? What if this UBI cryptocurrency changes the way money works by being created directly in the hands of the people, so that the financial system is built from the ground up, rather than controlled from top to bottom by banks and governments? ? It might sound utopian, but it’s really just an idea that doesn’t exist too far from existing trends today.

The dominant trend here is between centralization and decentralization. Industrialized capitalism was an era of centralization: firms have grown to vast proportions by exploiting economies of scale and vertical integration (where firms increasingly control aspects of their operations internally). Governments formed larger and larger blocs: NATO, USSR, EU.

The new economic era of the Internet and blockchain is shaping up to be one of decentralization. As the geopolitical landscape continues to shift from American hegemony to a multipolar world, a host of inherently decentralized technologies are coming online. Harvesting solar energy becomes cheaper than burning fossil fuels, paving the way for household-level micro-generation of electricity at near zero marginal cost. Mass production of consumer goods is decentralized by 3D printing: cameras, musical instruments, glassware, houses, cars. There is even a 3D printer that can make all the parts for another 3D printer.

[Photo: liuzishan/iStock]

But blockchain is the technology that has the potential to bring all of these other developments together to usher in a new era of collaborative social organization and post-capitalist economic logic.

Blockchains do not belong to any authority, so applications built on them will have to be governed by their users. The apps that make the most sense in this context are neutral platforms facilitating peer-to-peer exchange, without the coercive social contracts of governments or the middlemen of rent-collecting in the form of gigantic tech companies.

The implications for the fundamental logic of our economic systems are quite exciting: Cryptocurrencies represent nothing less than an opportunity to rethink money. This is of crucial importance because fiat money systems have a design flaw that could ultimately prove fatal. Almost every dollar, yen, or euro in existence is created by commercial banks with debt that must be repaid with interest. It is rented temporarily to the people, until it is destroyed when people pay off their debts with interest. This system leads to both local and international wealth inequality, but it has remained in place for centuries because it honors the main directive of capitalism: to prioritize the production of more capital before anything else. Sadly, it is also a driver of climate change and ecological collapse, since the endless reproduction of capital as we do now inevitably leads to the depletion of natural resources (we are now exceeding the earth’s capacity for renewal). ‘a catastrophic 64% per year).

[Photo: liuzishan/iStock]

With such a negative system seemingly locked in as the planet heads for disaster after disaster, there has never been a better opportunity to create a new monetary system based on the Universal Basic Income. And since these currencies can be designed with today’s existential challenges in mind, we can do things like strongly encourage local commerce and discourage the exploitation of workers and remote ecosystems. This in turn has the potential to undermine the logic of cheap mass production techniques currently at the heart of our throwaway culture.

We design and build an example of “positive currency” in the cryptocurrency world, called Circles. In the Circles system, money is created at the individual level and without corresponding debt. In other words, the money starts with the person who “creates” it (that is, it appears for the first time directly in their account). It does not come to us from a central authority like a bank or a government or even an employer. This means that it is evenly distributed before entering the market.

Instead, silver takes on basic characteristics. A smart contract creates new currency units at the same fixed rate for each user, and these users create trusting relationships with each other to exchange their newly created money. This means that the system does not need to be controlled by a single party, as the value of the currency automatically emerges from the relationships of trust that users create. As with any cryptocurrency, priming an ecosystem that uses this new monetary system and thrives in a way that controls the specter of inflation won’t be easy. But it is quite possible. And an important distinction is that Circles is supposed to work fine on a local scale, where networks of trust already exist and can easily be transcribed onto the blockchain. From a user’s perspective, joining the new UBI economy may soon be as easy as downloading an app, connecting with friends and family, and heading to the nearest store for lunch.

As exciting as it sounds, cryptocurrency technology on the blockchain is not yet fully mature or ready for mainstream adoption. Early cryptocurrencies like Bitcoin had issues such as the built-in early adopters advantage which is already mimicking old power structures. And we still need to work on the user experience and find solutions for distributed currency exchange.

While the road to mainstream adoption is unpredictable, the surge in popularity and interest these technologies experienced in 2017 is very encouraging. The pace of innovation is now overwhelming, as each new level of sophistication builds directly on other recent advancements. People no longer ask if solutions can be found to the biggest problems with cryptocurrencies and blockchain technology, but when.

For all of this to keep its promise, we have to want it. We have to think systemically. We must recognize the social, economic and spiritual dimensions of the polymorphous crises we are currently facing and commit to responding to them accordingly.

This will require embracing an idea that some may find counterintuitive: location. We will not go back to the days of pre-globalization, but we must bring the economy back to a more human and local level. We need to revitalize local communities. We need to stimulate and develop the informal economy on which most of us depend in our daily lives: the attention and sharing that we automatically do with each other but which has no recognized value in the economic paradigm. current because it is not considered a profit or loss.

This is only an outline of a potential direction into the future. There are many dimensions to our current crises; they are political, economic, social, spiritual and technological. We have looked here through the lens of technology because it is so full of promise. The point is, none of this is impossible. We just need innovations to keep their promises and people to fight tirelessly for a more just society.

When we talk about the possibility of an environmentally friendly post-capitalism, this is the kind of future we can envision. It won’t be anything we’ve seen before. Falling back on dogmas like socialism or communism as our only standard alternatives is far too reductive for our purposes, and underestimates our potential as ingeniously inventive creatures. The digital renaissance is already shaping the future. Our job is to help the midwife bring it to life, before a less fair and less secure alternative takes it away from us. Our survival could very well depend on it.

Martin Kirk is co-founder and chief strategy officer of The rules, a global collective of writers, thinkers and activists dedicated to the fight against the root causes of poverty and inequalities in the world. His work focuses on bringing knowledge of cognitive science and complexity to the problems of public understanding of complex global challenges.

Andy Milenius is CEO of DappHub: a self-organized network of logicians, researchers, designers and developers spread around the world that creates the infrastructure for decentralized applications. He is particularly interested in the design of cooperative governance mechanisms, advocating humanist values ​​in emerging technologies and solarpunk aesthetics.