
Group Currency - raldu
http://groupcurrency.org/
======
jerf
Basic income as proposed at the societal scale is essentially a wealth
redistribution scheme, which implies that there is some concrete actual value
removed from somebody and given to somebody else. Using a cryptocurrency to
provide basic income would manifest simply as the creation of currency, with
no actual value being created to correspond to the new currency, so it's just
going to be inflationary. I don't see any proposals on the linked page on how
to overcome that, links welcome if there are, nor does anything leap to mind
to solve this problem in a sensible way.

(This has nothing to do with whether basic income is a good idea or not; the
point is that this does not appear to actually _be_ basic income except at an
extremely superficial level. Nor is my calling it a "wealth redistribution"
scheme intended to be a criticism. I'll admit to being extremely skeptical
about basic income, but that is what it is, just like EITC. Whether
redistribution is a _good idea_ is a separate discussion I'm not trying to
have here.)

~~~
chipsy
What this scheme does is create equitable inflation. That is, I concur, not
identical to BI. However, inflation does come with redistributive effects.

In most macroeconomic models, the question of "who makes the money" is
abstracted into "the banks make it and lend it to everyone." That means that
money has to start in the investment sphere - the expected impact on
individuals is to experience cheaper debt and higher wages and prices - a sort
of "regression to the mean" in their financial status.

But in a situation like the post-GFC markets, investment tends to slosh around
in financial instruments without reaching Main Street in any meaningful way -
the money isn't turned into capex or wages. This is the kind of thing that is
smoothed out when the inflation is reformulated as a benefit. Individuals
still experience the regression to the mean, but it happens instantaneously,
on a predictable schedule.

~~~
harperlee
Could we create a system where inflation would hit harder on the one that had
the most money? That way, rich people would be enticed to move their money,
and invest in risky plays. Some of them would grow very rich, others would
lose a lot of money, but, on the end, they would end up reducing their
income...

~~~
ejlo
The tool for that is _demurrage_ ,
[http://en.wikipedia.org/wiki/Demurrage_%28currency%29](http://en.wikipedia.org/wiki/Demurrage_%28currency%29),
which adds devaluation of the currency over time. This complements Basic
Income very well, with UBI for money creation and demurrage for money
destruction.

For physical currency is has some obvious practical problems, which has
prevent adoption, but for virtual currencies it is easy to implement.

~~~
harperlee
Well sorry, I did not explain myself properly: my idea was that, if every coin
could be associated with a specific person, rich people's coins might devalue
quicker than poor people's coins. It's a weird idea and giving it a little
more thought, I don't see how could a state enforce such a system effectively,
though.

~~~
tlarkworthy
variable Sales tax/VAT pegged to credit card and linked to SSN/NI

Cash purchases would be problematic. Maybe drawing out cash incurs the
variable tax too?

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yungchin
How do you prevent members from only enjoying the upside?

Example: say we're a group of musicians, starting a MusicianCoin group. I
happen to be a fairly shameless participant, so I enjoy the basic income while
I'm still bootstrapping my career, but one day I hit it big, and now my
concerts are all sold out for the next year (and of course, tickets are sold
in exchange for MusicianCoins).

Do I give back to the group? If I want to do that, that's easy: I just sit on
my newly earned pile of MusicianCoins, and wait for the steady rate of minting
to dissipate the value away to other members of the group. But what if I just
exit my position immediately? By trading my MusicianCoins for dollars (thereby
putting downward pressure on the value of MusicianCoin), I'm avoiding giving
back any of the value I created, I think?

I think this is what makes it fundamentally different than a tax-based basic
income: you can't (legally) opt out of taxes.

~~~
itistoday2
I'm not sure it's that simple. Think of it in terms of shares in a company.
When Apple does well does any executive sell their shares? Maybe, maybe not.

Nothing is preventing this musician from selling their MusicianCoins. If there
are enough coins and enough musicians it won't do much to the price if the
market knows how to value the coin properly. The musician might simply end up
losing out on a profit by this action. Depending on the situation, maybe they
might end up annoying the group and getting kicked out, who knows. It
shouldn't be an issue though, just as it's not an issue with company shares.

~~~
yungchin
But there's a difference: Apple shareholders don't see their shares
redistributed at a steady pace - Apple shares don't have a built-in basic
income.

The reason why I think even a single exit might do a lot to the price of
MusicianCoins, is that financial success (not only in the music industry)
seems to follow some sort of power law: a very small number of members amass a
large part of the wealth [1].

Do people behave like this in real life (ie abandon their group when they
strike success)? Well certainly not most people - men like Warren Buffett and
Bill Gates haven't taken up citizenship in some tax haven to opt out of US
taxes - but IIRC one of the Facebook founders did.

There are at least two reasons why it may be a bigger problem for MusicianCoin
than it is for the USA: 1) the group size is bound to be smaller, so a single
such event would cause a bigger shock, and 2) it's a much easier decision to
sell your crypto-coins than it is to move country.

Of course this is all arm-chair economics on my part, and I actually hope
you're right that in practice it's not such an issue - I love the idea and
would love to see it work well.

[1]: see these sort of numbers, where the top 1% pay 23% of taxes:
[https://www.vox.com/2015/4/14/8406445/tax-state-local-
distri...](https://www.vox.com/2015/4/14/8406445/tax-state-local-distribution)
\- and I reckon what would have been really interesting is if they had broken
it down to how much of that 23% is carried by the top 0.1%

~~~
wcummings
[http://www.nasdaq.com/symbol/aapl/dividend-
history](http://www.nasdaq.com/symbol/aapl/dividend-history)

~~~
yungchin
I'm not sure what you mean? If I hold more shares, I get more dividends.
That's not redistributive, unlike what groupcurrency proposes.

Edit: ah wait, I think I know what you mean. When I wrote they have "no built-
in basic income", I meant "no built-in Basic Income" \- as per the context of
this thread.

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derefr
So... I always thought one of the first things that would be implemented over
cryptocurrency protocols would be a form of "closed-group socialism" where
people's income is held in trust by a fund, which then allocates it (either
through one-way transfers, or by issuing credit) according to people's current
"scores" in the blockchain ledger, whatever those entail.

This system seems to want to do that... but without the part where people's
actual money is being redistributed. I don't get it.

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nosuchthing
Seems like the endgame of this current iteration would be a sharing economy
where any outside work or production that gets input into the system is
distributed amongst the shareholders of credits.

Whether that can sustain a "basic income" remains an issue not directly
addressable by the scope of "Group Currency"

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jessep
I'm sure I don't understand most of the implications, but seems like it could
be a cool mechanism for a lot of things. You could start a company and
distribute a percentage of future revenue to owners of the currency based on #
of tokens (or whatever) and you have something that ties reward to time spent
working on project in a direct way. Not sure you need a cyrpto currency for
this or things like this, but is a cool idea.

~~~
cheald
This is basically what stock options are. The mechanism of allocation is
usually a bit different, but the basic concept is the same.

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grondilu
> A town, city, state or country can provide its community with a basic income
> that is backed by the value created by that community.

It's not clear to me why the value created by people living inside those types
of communities should be aggregated into a single monetary device. In a town,
there are various groups of people working together to produce different
products in different kinds of economic activity. Some make profit and thus
can distribute the produced value, some don't make profit and can't distribute
anything.

Those groups are usually called companies, corporations and so on. They
already have a system of exchangeable tokens representing both ownership and
decision rights regarding the activity of the group and the redistribution of
its produced value. Those tokens are called shares or stocks. It's a nice
system that does not work too bad, though I'd agree that a bit of
decentralization would be welcome.

But fusing those tokens from different companies into a monetary tool that
would represent the activities of a larger group controlled by political
structures such as a "town, city, state or country", seems to be a gross loss
of granularity that would probably result in dramatic economic inefficiencies.

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bduerst
How is supply controlled? Through the group funds? What is to keep rational
actors in larger, competing group funds from sabotaging them?

Also, how do you address the problem of goods and services with income-elastic
price points? A UBI scheme will cause prices to disproportionately inflate in
lower-income markets, i.e. housing will be just as inaccessible as it was
before because the income increase.

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cheald
> The members of a group currency all mint cryptographic tokens (coins,
> shares, what-have-you) at an equal rate.

So what you're saying is that I can get value that someone else has paid for
with their hardware and electricity bills, without having to do anything
except be on a list? Sign me up!

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kang
People really do not understand blockchain.

Since each member gets regular basic income and are verified with KYC (to
prevent fake identities) this is just how money is handled among friends.
Alice owes Bob a dollar and Bob owes Carol a dollar and Carol owes Alice so it
all eventually settles. Just the friends in this 'group' keep a record of it.

Why do they need mining then? They don't. They just need a ledger of all the
loans.

If a ledger can serve as a currency system then why do we even need mining?
Because users could fake multiple identities, to receive the basic income.
Mining is required to solve this 'money generation' problem.

In bitcoin, not everyone gets basic income but only the ones who do some work
to maintain the ledger.

What group currency is, is called hawala.

~~~
bduerst
People tout the public ledger as a benefit of the block chain, but it's
utterly useless as soon as someone converts to another currency and then back
again (a.k.a. Tumbling).

You mention bitcoin, and tumbling is exactly how money launderers and tax
evaders use bitcoin's "public ledger" today.

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politician
Would the IRS position on digital currencies as barter all but eliminate this
use within the United States? Would the KYC requirement for protection against
Sybil attacks facilitate governmental interference? Neat article, but I found
the lack of discussion about the topic of taxation to be shockingly absent.

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return0
I couldn't locate the line where it provides people with food.

