
A decentralised Universal Basic Income platform based on personal currencies - nathanrosquist
https://github.com/CirclesUBI/docs/blob/master/Circles.md
======
jackcosgrove
UBI proponents should be cognizant of stagflation. During the 1960s and 1970s,
demand-side fiscal policy was based upon the Phillips curve, an observed
correlation between low interest rates and low unemployment. After the oil
supply shocks, this observed correlation began to break down as interest rates
were lowered to compensate for the rise in fuel costs. By the late 1970s the
US was experiencing stagflation, a combination of low interest rates, high
inflation, and high unemployment, which should have been impossible according
to the Phillips curve.

In reality the Phillips curve was too simple. What was happening was that
since wage increases came to be anticipated due to the consistent low interest
rate/moderate to high inflation environment, producers would preemptively
raise prices to soak up all of the wage gains. This led to a wage/price spiral
with no actual improvements in productivity.

Eventually stagflation was ended by dramatically raising interest rates and
triggering a nasty recession.

UBI could lead to stagflation because the income allotments and any increases
would be according to some formula known ahead of time. This means that
producers could anticipate demand and simply raise prices to soak up any
income increases.

Something to keep in mind when devising these systems.

~~~
nwah1
Producers of most goods will not be able to raise prices, but providers of
scarce goods with inelastic supply will be able to raise prices. Like land.
Land has a perfectly inelastic supply, and thus expectations of more income
will lead to increases in rent.

Whereas, by contrast, increases in the price of food quickly lead to increases
in the supply of food.

As Matt Rognlie of MIT showed, rents have been responsible for almost all of
the returns to the already-wealthy over the past few centuries that Piketty
documented.

~~~
vinceguidry
> Land has a perfectly inelastic supply, and thus expectations of more income
> will lead to increases in rent.

This is a common misconception. In fact real estate is just as supply-elastic
as everything else. New developments open up all the time. Development makes
land more attractive for more people. And areas become blighted and therefore
less attractive, lowering prices.

Some places have sharply-constrained supply, such as San Francisco, but this
isn't the norm. The norm is cities slowly expanding outwards, as new
investments in the center require more time and effort to bear fruit. Politics
often throws a monkey wrench into market functionality, but the vast majority
of real estate markets function and clear just fine.

~~~
bduerst
If that were true then natural monopolies would not exist. Electricity too
expensive? Let's just build some electric poles in the middle of the tundra
and people will move their homes there for their electricity demand.

Land (as in _housing_ ) is widely accepted as being supply-elastic, especially
since in addition to scarcity it's also heavily regulated. You can't wave your
hands at SF and say it's an exception because you want UBI to work. Markets
like SF are proof that housing pricing is income-elastic, and can't be
dismissed when discussing raising the income floor for entire populations.

~~~
AnthonyMouse
> Electricity too expensive? Let's just build some electric poles in the
> middle of the tundra and people will move their homes there for their
> electricity demand.

If you built some electric poles in the middle of the tundra and by moving
there people could pay significantly lower prices per KWh, people with high
electricity consumption absolutely would show up there to consume it. There
are companies that build data centers in cold climates just to save on air
conditioning.

> Land (as in _housing_ ) is widely accepted as being supply-elastic,
> especially since in addition to scarcity it's also heavily regulated. You
> can't wave your hands at SF and say it's an exception because you want UBI
> to work.

Not all housing markets are hampered by bad regulations. Houston has much less
restrictive zoning and rents are much lower there than SF. They're also lower
in Tokyo despite the incredibly high demand for housing there, because Tokyo
isn't afraid of density.

It doesn't say anything to say the combination of UBI and terrible zoning
regulations will cause rents to be high in SF. They're already high in SF
because of terrible zoning regulations even without a UBI. The only way to
have reasonable rents is to fix the zoning rules, after which supply will meet
demand as it ought to.

------
nck4222
In true HN fashion, everyone's first reaction is to hate this.

I don't really know enough to say whether this will work/won't work, but I
think it's a cool idea. It's blending technology, market forces, social
contracts all in one in attempt to do something new and beneficial.

I'd love to see more concepts like this being created and tested.

~~~
harryf
Agreed. Anyone who claims they know what possible outcomes we can expect from
UBI is deluding themselves (or more likely feeling their comfort zone / world
view threatened).

UBI could be as significant event for the human race as invention of fire; for
the first time large number of human beings with the time and opportunity to
develop their talents vs being forced to work minimum wage. It could be like
unleashing an army of "Linus Torvalds" \- amazingly positive. We don't know

~~~
the-dude
We have limited UBI ( 'bijstand' ) in The Netherlands for decades and I am
sure the results will be a mixed bag.

I know one bar owner in a typical 'bijstand' neighbourhood which was pretty
happy. Too bad none of those guys made it past 60.

I know some people in lifelong 'bijstand' too, the exception does something
useful for society like cultural events.

Most just piss their life away.

~~~
Frondo
"Most just piss their life away."

This is totally not snark: how is this different from people without ambition
who have a low-end service industry job and no ambition to do more than wash
dishes or pump gas?

Why would there be anything more dignified in an old man washing dishes in a
restaurant over an old man just drinking his days away? Neither is what I
aspire to, but the latter feels more honest to me.

In other words, what I try to wrap my head around is: who cares _how_ someone
else wastes their life, if that's ultimately the big-picture goal they choose?

~~~
the-dude
I care because I am made to pay for it. Even with UBI.

~~~
rspeer
Oh. That's a dumb reason. Until this it was sounding like you had an argument
against UBI from society's point of view, not just based on your own financial
interest.

~~~
ameister14
That is an argument from society's point of view. When people don't work or
contribute to the general welfare of society in any way (and they are able to,
not talking about people unable to do things,) and they take from the general
pool provided by the rest of the social group, they are taking away resources
that could be used for other things, things that may further benefit the
individuals providing resources for society.

There are arguments to be made about decreasing crime, but most of the most
convincing moral imperative arguments are related to religion. The more
convincing Keynesian argument is about money going into the economy and
driving growth because none of the people dependent on UBI will save anything
at all. So from a purely utilitarian point of view, individual financial
interest does come into play.

~~~
WorldMaker
I want people to have an _option_ not to work, because I want an option not to
work. Maybe I'd like to use that time to drink myself into a stupor and write
a terrible novella and pretend I'm Ernest Hemingway in a house full of alley
cats. Maybe I'd like to use that time to consider a startup idea that wouldn't
be big enough to pay for everything I need like healthcare and retirement, but
would be otherwise an interesting project if it didn't have to meet those
financial goals out of the gate in its business plan. Maybe I would like to
use that time to teach young kids how to program, not as a trade, but as a
means to entertainment.

You want to ascribe morality to those options, but I find the freedom to
choose more interesting. It's not my job to judge which is more "productive".
Maybe that novella in the end turns out to comment deeply on the human spirit,
maybe those kids never use those skills "productively", maybe that startup
goes bust and I return to the next plan. The moral imperative is that I should
have the freedom to choose outside of the strictures of what the current job
market finds productive or what government can legislate to be considered
productive.

If that means there are a lot more people following the first idea and
drinking themselves to a stupor, then that is a market failure. _Surely_ the
labor market can stretch to entice people to such "productive" labor if it
actually has to _compete_ for their time and energy? We use a "productive
morality" to prop up a market that has never had to truly _compete_ in the
entirety of its existence. (Which is to say that labor has _never_ been a free
market.)

I find it funny, too, that you bring up religion as providing the most
convincing moral imperative arguments for UBI, when in my mind it also
religion, the Puritanical Zeal, that so colors the debate against UBI. The
Puritans believed that men must work to appease God, that Productivity was an
end to itself, a way to measure yourself before God. Why _does_ everyone need
to work so? You claim it is "society" that demands productivity and wishes to
keep score, but many societies have never kept score, and have no need to keep
score. It seems to me that the scars of Puritanical Zeal have simply replaced
"God" with an uncaring "society" in a lot of the arguments.

(From a purely utilitarian point of view, the more people with an option not
to labor under someone else's mandate, and truly choose their own path in
life, presumably the greater the well being of those individuals and the
overall more well being across the spectrum of that society. Individual
financial self-interest is never utilitarian, you can't maximize others'
happiness thinking only of your own.)

~~~
ameister14
You currently already have the option not to work. The problem is that since
we are not post-scarcity by any definition, there is a negative impact of your
choice on other people. That is the case even with UBI. The question for me is
if that negative impact is outweighed by the positive impact of UBI, most of
which I think has nothing to do with choosing not to work but instead is about
propping up an economy based on labor when we're shifting away from the labor
coming from people.

I wasn't ascribing morality to your freedom to choose to be entirely dependent
on society, I was saying that the moral argument that people are important and
that socially we should care about, feed and clothe the needy is mostly
grounded in religion. Your use case, where a person intellectually chooses to
be dependent on UBI because they don't really like working very much, is very
different from the one I envision: robots take your job and you have nothing
and so are forced into dependency.

The problems this will cause a consumer driven economy are fantastic, and the
easy way to prop up said economy is to simply give people money to spend - not
too much, or they’d save it. Just enough so that they spend everything you
give them, sustaining the cycle. That's the convincing Keynesian argument.

~~~
WorldMaker
> Your use case, where a person intellectually chooses to be dependent on UBI
> because they don't really like working very much, is very different from the
> one I envision: robots take your job and you have nothing and so are forced
> into dependency.

I think that happened already 20 years ago, though not just robots but also
centaurs (in the chess sense of people using computers/working in tandem with
machines) have taken most of the jobs, even accounting for globalization.

I think the reason we aren't talking about it, in that way, is that it's still
too easy to sweep the problems under the rug. It's still too easy to blame the
people that are out of work rather than the labor market that doesn't _need_
people.

A society is people. People being dependent on their society is somewhere
between an oxymoron and baseline assumption. Everyone is dependent on the day
to day cooperation of their society, in one way or another, even if it is
"just" roads, and breathable air, and a political reality in which they can
live their day-to-day.

I think we are far too stuck on "someone not working is taking away from me",
because we see it as some zero-sum game, but robots and centaurs _have_
changed the equations. The labor market is _unfair_ and neither free nor
liquid, and yet we are letting it ascribe morals to people, looking down on
people working multiple jobs to make ends meet (because the labor market has
no incentive to offer a fair price) or who can't find work because there isn't
enough work to go around.

I think it is _far_ past time to stop judging our neighbors by their position
in the labor market. For me, a part of that is realizing that a global and
broad option to _leave_ the labor market is important, that we should
celebrate that as a _right_. _If_ capitalism needs more hands on deck, it can
_pay_ for them. It's time to stop assuming everyone should work, and let the
market tell us why we should work (and how much it is willing to pay to let
that work get done).

We don't really have an option not to work so long as our basic subsistence is
tied to how we spend our labor. But companies don't have to do right by us,
because they aren't our societies, they don't need us, they don't depend on
us. The basic problem is that we _are_ post-scarcity in the labor market, and
companies have a "free lunch" by this "morality" that basic subsidence should
be tied to some nominal value of productivity that they decide based on a
quarter-to-quarter bottom line.

Why should society continue to give capitalism this free lunch? I think
society should invest more directly in its people. I think this zero-sum
mentality that to invest in a person who chooses not to work has some
"negative impact on other people" hurts us as people, and is a bad excuse for
society in general. The fact that there may be some people who decide to spend
that investment solely on shortening their life with as much alcohol as they
may acquire doesn't mean that a society investing in people has a net negative
impact on everyone else.

~~~
ameister14
>A society is people. People being dependent on their society is somewhere
between an oxymoron and baseline assumption. Everyone is dependent on the day
to day cooperation of their society, in one way or another, even if it is
"just" roads, and breathable air, and a political reality in which they can
live their day-to-day.

In some sense, people depend on society to maintain their quality of life and
provide for a subset of their needs; people also contribute to society and
maintain it in turn. You're talking about cutting out the latter and keeping
the former without replacing it with anything to support yourself with, which
makes you completely dependent on society to provide everything for you, not
just some things.

I didn't and I don't think most people do look down on those that cannot find
work because there is no work to be found. Your 'I want to be able to choose
not to work despite having the opportunity to work' perspective, though - that
I look down on.

By the way, if you decided to work for yourself - to grow your own food, live
off the land, and trade your labor specifically for your own sustenance, you
could probably do it. That's a choice you continuously make.

>If capitalism needs more hands on deck, it can pay for them. It's time to
stop assuming everyone should work, and let the market tell us why we should
work (and how much it is willing to pay to let that work get done).

It already does do that. I don't volunteer at my job, I'm paid for my labor.
The market tells you why you should work by pricing goods. You should work so
that you can afford goods and services that improve your life. If you don't
want any of those things, that's fine, but there's an argument to be had about
whether my labor should subsidize your lack of it.

>companies don't have to do right by us, because they aren't our societies,
they don't need us, they don't depend on us. The basic problem is that we are
post-scarcity in the labor market, and companies have a "free lunch" by this
"morality" that basic subsidence should be tied to some nominal value of
productivity that they decide based on a quarter-to-quarter bottom line.

This is a weird argument to me, because companies absolutely depend on their
workers. There are deficiencies in the labor market that cause certain labor
to be valued at a higher rate than others; companies routinely hire from their
competitors and give their workers raises or better offers. That's the labor
market at work. It's not a free lunch.

>I think society should invest more directly in its people.

I agree. I think subsidized education is a pretty good thing, and it has
positive impacts on society which is why we continue to do it. 'Investing in
people' doesn't mean paying you to do nothing, though; that'd be a pretty
terrible investment.

~~~
WorldMaker
> In some sense, people depend on society to maintain their quality of life
> and provide for a subset of their needs; people also contribute to society
> and maintain it in turn. You're talking about cutting out the latter and
> keeping the former without replacing it with anything to support yourself
> with, which makes you completely dependent on society to provide everything
> for you, not just some things.

Sorry, no, that's not what I'm talking about.

I am saying that I'd like to see the notion of "contributes to the labor
market" entirely disentangled from the notion of "contributes to society".
Those are very separate concepts, but today everyone talks about the morality
of the first as if it is the morality of the second.

Consider it moral relativism if you will, but I think "contributes to society"
is and should be a very low bar. Existing as a law abiding member of a society
alone is a contribution.

Child care is extremely undervalued by the labor market, but hugely valuable
to society. Child care raises the next generation of that society, after all.

In the case of the "town drunk", making transactions to buy a legal vice is a
contribution, keeping the money circulating in that town. That "town drunk"
may even contribute directly to the well being of people directly in the way
that they brighten people's days.

The lower the bar we set as a society, the greater the safety net, the larger
the trampoline. Yes, that's a bit selfish to want, but a large safety net, a
giant trampoline lets you take huge risks in the labor market, lets you take
huge risks undervalued by the labor market.

I got laid off in a terrible state once, where to collect the unemployment
insurance money _to which I contributed_ , almost all of which came out of _my
premiums_ , I was treated as a guilty, negligent individual that needed
constant supervision to keep from a life of crime, I was micro-managed in how
I could use _my_ money, and my unemployed time. Every form was designed to
infantilize me, and possibly also designed to humiliate and judge me and guilt
me, for daring to make use of the insurance product for which I had greatly
contributed in a time when it was decided it would be nice to "cut overhead
this quarter to bring shareholder value up for a buyout". That's not a society
I want to live in.

We are post-scarcity in the labor market for all unskilled and easily
trainable jobs. We are dangerously close to post-scarcity for a lot of skilled
labor. That scares me. I want to selfishly redefine what "contributes to
society" means because I fear we need to do that sooner rather than later. We
don't all want to be standing in lines in government offices, for the rest of
our days, filling out forms demanding us to prove our worth as people. It
would be better if we could assume people are worth something as a baseline.

------
macieklaskus
I was sceptical about this - where does the value come from? - until I read
the part about mapping the social trust.

There is value in mapping these relationships. Trust enables lowering the cost
of transacting. Low cost of transacting enables creation of powerful
ecosystems.

It's the first proposal that I am aware of that introduces an economic
incentive on an individual level for mapping trust. The system seems
potentially very robust: 1) I add people I trust in order to increase the
value of my coins 2) If I make a mistake and add an actor who turned out to be
untrustworthy I am penalized by losing some value from my coins

Thanks to this dynamic, there is both an incentive to expand the network and
eliminate bad actors on an individual level.

------
hectorr1
I like this idea. I am skeptical that it will work.

Necessary in this idea is an inflation curve to continue to provide the basic
income and discourage hoarding. It is also necessary to scale the user base to
make the idea meaningful. This could lead to hyperinflation as the network
bootstraps, creating a headwind that scales at least as fast as the idea.

The requirement of actual meatspace peer-to-peer trust is an extremely hard
problem as well. It seems like one option is people take this seriously and
trust networks end up resembling current social networks with the inherent
stratification. And you don't get internet money.

Alternatively this requirement is eroded or ignored because it's too hard,
until it becomes obvious that there are entire networks of fake accounts,
everyone is holding FakeCoin, the risk can't be arbitraged out because of the
1 to 1 requirement, and now it's 2008 and FakeCoinCo is Too Big To Fail.

Would love to hear why I'm wrong.

~~~
Jtsummers
Regarding meat-space web of trust, I think solutions like Keybase can help
with this (though I'd want to see the principle of it decentralized, rather
than only one service as it is now).

With validators, you also largely solve this problem. The vast majority of
people are not hermits with no physical connections. I can create an account
and go through my apartment building's validator. The apartment office has a
vested interest in making sure my account is legit (I'm paying them!), and now
I'm connected to a real world entity. Similarly, my employers can create a
validator and connect my account during the normal on-boarding of a new hire.
They also have a vested interest: a fake account impacts their reputation;
they pay into that account and may even be paid from it (suppose I overspent
on a business trip and need to reimburse them, they need me to pay back in a
currency they trust).

It does still run into problems, don't get me wrong, but this validator
concept could mitigate many of the scaling issues of web of trust.

~~~
lucozade
The validators idea to accelerate bootstrapping is a good one. And I think
you're right; it be institutions like companies and banks that will provide
the validation services.

The issue is tying this to a non-fungible asset. The most obvious problem will
be ghettoisation. You can envisage "invitation-only" validators at one end of
the economic spectrum and a state sponsored validator at the other end.

You could, possibly, force them to interact by mandating a common
intermediary, presumably the state, so that there are connections across the
population. But, at that point, the personal asset/currency idea seems
superfluous.

Might as well be an account linked to, say, your social security number that
mints a fungible asset periodically. You can look at enhancements to the SSN
idea to make it less forgeable but that's a separate issue.

Having said all that, I've been quite skeptical of the social benefit of UBI.
Largely as I couldn't see how you could sensibly start from here, as it were,
and control its development. I still can't see how to do that but I'm less
skeptical that it's possible.

------
adjkant
I think there are plenty of flaws here, but I upvoted it because I think
there's something novel and creative here that can be leveraged. To those
posting criticism and nothing else, let's see if we can try to be constructive
with it, or at least helpful in identification of central flaws that will be
roadblocks. I'm sure there is a lot to be sorted out.

------
cdancette
I'm not sure UBI's issues are technical, and that you can just solve it with
the blockchain.

But it still looks rather exciting! I hope we'll get the code running soon,
the white paper lacks some details to understand in depth the protocols. (Is
there PoW ?)

Btw, I don't get what is "minting". This is not really explained. Is it like
mining? Are people expected to run a miner on their personal computers? Or do
the coins appear automatically, based on the age of the account ?

~~~
lucozade
I think the idea is that the contract just produces more coins on a schedule.

As you can't arbitrarily start accounts (at least that's the thinking), it's
the equivalent to the state handing you some money periodically. Mining
wouldn't be necessary as the rate limit would be account creation.

------
lodi
I don't have anything to contribute regarding UBI or blockchain, but I just
wanted to compliment the author on creating an extremely well-written readme.
This is exactly what I want to see from a github project: "what", "why", and
"how" presented in a very clear, organized, just-long-enough format.

------
jstanley
> The existence of trust relationships is how users protect themselves from
> fake accounts by specifying which ones they know for a fact represent an
> individual human’s primary account, forming a native Sybil resistance in the
> system.

I don't think so. What if my friend and I both create 2 accounts and both
trust both of each other's accounts? We get twice as much money as everyone
else who plays by the rules?

~~~
Jtsummers
The "Defending against fake accounts" section suggests that this wouldn't be
effective except between you two. If I trust jstanley but not jstanley-fake,
then you can still only give me jstanley currency. You've got to convince me
to trust jstanley-fake in order to get me to use the money.

However, since this is basically a currency based on web of trust, at a large
scale you could probably dupe enough people into trusting your fake account.
Or introduce both currencies into separate social networks. One here with the
technical social circle, another with your in real life community, for
instance.

~~~
baddox
I’m sure some people could get away with it for some amount of time, but each
person in each circle is incentivized to keep an eye out for these personal
schemes.

~~~
Jtsummers
Right. Because if I trust a bad actor, but others don't then they'll be
spending _through_ me and I'll end up with useless currency.

~~~
baddox
Why wouldn’t others have approximately the same incentive as you to not form a
trust link to a liar?

------
EGreg
Loving the discussion on this submission. We are building our own Basic Income
solution around community currencies (not individual) so that a person can
belong to one or more communities (voluntary association) which provide their
members with basic income by issuing new coins to them and gradually inflating
their money supply. They may get the equivalent of $5 a say from a Poets'
guild, $20 a day from their city and $1 a day from some other association.
They convert it all to their city's currency with no fees, and use it.

If you are curious, check it out
([https://intercoin.org](https://intercoin.org)) would love to get feedback.

My main concern about UBI has been exactly this - producers of scarce goods
raising prices, because they can.

But people need to pay for necessities anyway, so the current welfare state
has to deal with it somehow, right?

One way is collective bargaining via single payer systems, which actually
lowers prices. But this leads to an arms eace between sellers and buyers and
centralization into single payers and cartels (AMA).

------
seanalltogether
I'm not sure I'll ever be convinced that normal people should be operating
with cryptocurrencies at the protocol level. This whitepaper goes into a lot
of technical detail that users should never be expected to touch.

~~~
jstanley
That doesn't make it a bad idea. Over time interfaces would develop so that
ordinary users can use it without having to worry about the protocol.

It probably is a bad idea, but this isn't why.

~~~
eternalban
Implants.

~~~
eternalban
It appears someone doesn't like this answer (or possibly think I like it), but
UBI and implants very likely will go hand in hand. No free lunches in this
universe. None.

------
unfamiliar
> new users with no trust connections will have to get their closest loved
> ones to be their initial connections

> users who are new to the system and don’t have many trusted relationships
> have a less valuable currency than someone who is well-established

Isn't a design like this going to screw over quite a lot of the very people
UBI would be most needed for?

~~~
ghthor
I think the difference here is who's minting coins. I don't see a reason the
disenfranchised couldn't band together and create their own validator. This
gives them currency internal to their community, which they can start using
right now. A huge difference from what exists now. How would you possibly do
this with our previous technologies, youd need enforcement to stop cheaters
and scammers, youd need trustworthy regulators to distribute coin equaly,
avoiding bias and discrimination. Both of these very real negitive behaviors
are now very difficult if not impossible, and it didn't require a military and
a complicated beaucracy to enforce.

------
lee101
Just my opinion but I believe the inflationary nature proposed here will
create a pressure to immediately swap your basic income to other crypto, there
are too many cons in holding this coin eg you don't know who will accept it
and for a decentralized system is too personal, I understand that with the
level of specificness of every person having their own coin politics will come
into play with validators Nations refusing each others coins

Interesting concept that the validators are incentivized not to validate the
wrong people but perhaps need more incentive to validate people, perhaps the
validators would start printing their own money and automatically disperse it,
fairly dangerous ideas but we are all lucky the ball is rolling on this.

Checkout live crypto predictions and charts at
[https://bitbank.nz](https://bitbank.nz)

------
mundo
Can you revoke trust?

If the answer is no, what happens when a scam account is discovered? They get
to just keep mining new coins forever and passing them to the people unwise
enough to trust the account before it was discovered to be fake?

If the answer is yes, what happens to the coins already mined by the scammer?
Last person holding them loses?

------
gregknicholson
There are no downloads on their website, and judging by the repos on GitHub,
this seems to have gone into hibernation about a month ago.

[https://github.com/CirclesUBI](https://github.com/CirclesUBI)

Is a technical implementation still being worked on somewhere else?

------
SmooL
I think this is cool, but -

"...it is crucial that users take direct peer-to-peer trust relationships
seriously"

I personally doubt that most people will take it that seriously, especially if
they're new and in a position where they find it difficult to make
transactions. There's also the issue that inevitably, even if people 'trust'
someone else currency, that person acts deceivingly and is malicious. How does
the network protect against a certain number of 'broken' trusted links?

------
neilwilson
The main issue here that stops it working is the requirement for a fixed
exchange rate. If I'm industrious and you are lazy why would I exchange my
output for your coins. You are adding nothing of actual value to the system
that I could buy with the coins. So once I have hoovered up all the coins of
the lazy there is nothing of value I can buy with them.

The result is actual inflation - all the industrious people have lots of coins
but nothing to buy because the lazy haven't produced anything.

If the values floated so that AliceCoin can only be used to buy the output of
Alice then you might have a system that works. AliceCoin would swap through
the system like an endorsed cheque until Alice redeemed it by actually doing
something.

To game this system you just need to appear industrious until you are trusted
and then stop doing anything. You then get the output of those that desire to
be trusted without actually adding anything yourself.

And thats how UBI works - it requires constant new blood to operate as a slave
class until they are granted 'freedom' by the system. If you look at UBI
systems you'll always find that slave class - a five year qualification
period, a fixed exchange rate with those that don't get the UBI, UBI less than
the living wage, etc.

------
_pmf_
Here's a thought experiment: make a crypto currency that binds to personal
human lifetime, i.e. that (in order to disincentivize rent-seeking and
exploitation) makes it prohibitively expensive to spend this currency if the
blockchain indicates that it has been "tainted" by not originating from an
individual's lifetime bound contingent (i.e. tainting your contingent with
other people's money has an exponentially increasing penalty).

Exploitation is disincentivized (since the more money you aggregate from other
people, the less it is worth to you (relatively speaking)). Monopolies are
disincentivized by the same mechanism, i.e. the Coca Cola company selling to
100 million people makes less money than 10000 companies selling to 10000
customers each.

"But this stunts growth!" Yes, it does; but the curve can be shaped, and could
probably be adjusted by forking in a democratic fashion (if mining is actually
democratized).

~~~
grp
Oh yeah, Multi Level Marketing companies everywhere!

------
baccredited
The trust part breaks this I think. Would like to see a UBI that is
distributed to Estonia e-citizens, Fummi, or similar. Something where a real
live person is validated once and only once in person.

Fummi is at
[https://blockchainforchange.org/](https://blockchainforchange.org/)

------
dwaltrip
This requires far too much careful manual bookkeeping to ever work at scale.
People would never be able to manage dozens (let alone hundreds or thousands)
of trust relationships, especially when each decision might end up being
rather important, financially speaking. It would be a constant cognitive tax
that I can't imagine anyone paying.

This one of many reasons that good money is fungible and completely
interchangeable. It doesn't matter where your balance came from -- it can be
used just the same.

One other big concern. I think proposals of this nature run a dangerous risk
of linking financial associations too tightly with social associations.
Becoming someone's friend shouldn't require vetting their long-term financial
stability right off the bat.

------
PeterisP
Okay, so the system ensures (assuming that it manages to achieve everything it
says) that people get an appropriate number of coins and can spend them based
on this web of thrust.

But what is the net flow there? Some people will want to buy food with these
coins, but they have no goods or services to ever offer in return (that's the
whole point of UBI). Let's call all their personal cryptocurrencies in
aggregate PoorCoin. Some people will be using these coins to participate in a
real economy, and not only be using to buy stuff but also sell their own goods
and services for coins of others and perhaps buying back the coins they issued
themselves.

Let's assume Alice would be willing to sell food for a coin where they can get
goods or services or labor in return - i.e. Alice would not be willing to
trade food for PoorCoin, but she knows Bob is a trustworthy, diligent, hard-
working dude so she'd be happy to sell food for BobCoin. So far so good, the
system allows to do that.

If Bob knows and trusts (in this system) any people who truly need UBI, then
they'll be able to buy food.... at the expense of Bob. Alice will gain
BobCoins - ones that Bob could have been using to buy stuff for himself.
Instead of his own coins Bob will gain PoorCoins, which are comparably much
less useful. If someone selling food would accept PoorCoins, then they would
have done so, but since they don't, Bob is stuck holding coins of poor people
he trusts and can't spend them on anything useful (remember, those people have
nothing of economic value to offer by definition - if everyone can do so, we
don't need UBI).

The same applies for coin flow of any communities - poor communities would
need a net resource inflow in any UBI-like environment; so there would be a
perpetual, permanent flow of different poorcoins out of that community. Would
the other communities be ready to accept those coins? As some people would and
some won't, it'd result in the "trusting" minority funding the whole system in
an opt-in manner. We can expect the total volume of "trust" that the trusting
minority is ready to spend in this way to be limited to, say, the current
total amount of charity - and we do know that we can't run UBI out of charity,
the amount is simply not sufficient.

An UBI system has net consumers, but it also needs to have net contributors,
the ones who are funding the UBI without getting anything in return. It's
clear why people who want to _get_ UBI would join the system, but why would
the merchants who sell food or the landlords who have cheap apartments join
the system? Okay, they might get some value of the employable people they
trust, but then the that those people, any person who's an "intermediary"
between the producers and consumers will be the one who's funding the system,
which is kind of weird since those are not the people who can afford to
support everyone else - generally, those tend to be the working poor, who can
only contribute a tiny amount of taxes; your local millionaire doesn't
personally know or trust that much people who really need UBI to survive. To
solve this, you'd need some entity which would be ready to offer (significant
quantities) of goods and services for PoorCoins, taking them from the poor
directly or from people like Bob, but if you do that, then _that entity_ is
the one doing UBI, not this blockhain, and it might as well hand out dollars
instead - it still needs to provide (and fund) all this value; and it still
needs to solve the identity and fake account problem itself, since _it_ can't
rely on the whole web of trust; it either has to take coins of people who
noone else wants to touch (so it needs an independent mechanism of identity
verification) or it can't provide _universal_ income to all real people.

~~~
Agebor
This is a great response, explaining the problem with any UBI in general.

I think the only way it could work is when the rich actually CAN gain
something for the goods flow going to the poor - that something can be a sum
of "moral satisfaction from charity", "diminishing the chance of the poor
majority revolting against the rich" and "statistically helping young poor
geniuses (and creative people in general) to join the rich in the future".

For each rich person, the ratio of these will be different, but multiplied by
a portion of their worth they are willing (or being forced) to give, will in
the end define the total amount of UBI available.

My theory is that after automation is widespread, it won't really cost much to
support the poorer portion of humanity, just as now there is a surplus of
basic goods made of plastic (clothes, everyday items). In the future this will
extend to food, shelter and connectivity.

But at the same time, the rich and poor will be further separated, as there
will be no incentive for the rich to interact with the poor.

~~~
PeterisP
Involving the rich, IMHO, is a 'tragedy of the commons' issue - it's generally
not worth for any one of them to get involved, since that doesn't provide a
meaningful impact to the practical goals like "prevent the bad effects of
inequality around me" or "reduce the risk of pitchfork-driven regime change";
but it could be worth for them to get involved iff there's a certainty that
_all_ of them would do so (willingly or not).

E.g. it is understandable for certain of the top billionaires to advocate that
the top income rate and capital gains tax should be raised (e.g.
[https://www.cnbc.com/2016/05/02/bill-gates-calls-for-
higher-...](https://www.cnbc.com/2016/05/02/bill-gates-calls-for-higher-
capital-gains-taxes.html) or [http://abcnews.go.com/Politics/warren-buffett-
raise-taxes-we...](http://abcnews.go.com/Politics/warren-buffett-raise-taxes-
wealthy-friends/story?id=14307993)), and strictly prefer that to simply giving
away more of their income - since if you can get _all the other_ rich to chip
in, the impact is much larger.

It's not feasible to fund UBI by a few ultra-rich people voluntarily chipping
in for it, but it is feasible to fund UBI by taxing them.

~~~
jasode
_> Involving the rich, IMHO, is a 'tragedy of the commons' issue - it's
generally not worth for any one of them to get involved, since that doesn't
provide a meaningful return_

It's unfortunate your analysis of Circles cryptocurrency not solving for
_value_creation_ is not near the top for further discussion by more than one
person.

A very similar currency proposal (Group cryptocurrency) also didn't account
for sustainable _value_creation_ that I discussed with its creator on HN
before:
[https://news.ycombinator.com/item?id=9501355](https://news.ycombinator.com/item?id=9501355)

Both the UBI cryptocurrency proposals are flawed because they get the wealth-
to-money cause & effect backwards. It's the wealth creation (the value of
labor / food / calculating the stars to predict floods / singing poetry /
catching fish / etc) that causes money to be worth something. The Circles
whitepaper using concepts like "validators" and "transitive exchange" doesn't
solve the value creation.

------
grp
In case of interest, Duniter is a similar initiative:
[https://duniter.org/en/theoretical/](https://duniter.org/en/theoretical/)

------
raiflip
While UBI is a cool idea, one problem with this idea I don't think anyone has
brought up with yet is a single global currency would be terrible from an
Economics point of view.

~~~
baddox
I don’t think this would need to look anything like a “global currency.” It
would probably just be a currency with exchange markets for other real-world
(i.e. government) currencies, meaning it would be no more a “global currency”
than USD or euro is today.

------
test6554
I don't understand why someone can't just create hundreds of fake accounts
early on in the process and eventually get them trusted. If you are Alice and
you create a real personal account, how do you ever get your account trusted?
Couldn't someone just create a fake account and use the same process Alice
used to get their fake account trusted?

The potential benefits are huge, double your income if you can pull it of for
just one more account.

~~~
lev99
On boarding is literally covered in the document. New users have two options.
1\. Get their closest friends to trust them, and then build trust from their.
2\. Use a well trusted validator.

Fake accounts do not really gain any benefit for sitting, other then their
account gathers coins. What really matters in making fake accounts is
gathering social connections. This whitepaper that the trust connections are a
critical part of the system.

~~~
test6554
It sounds like a pretty unforgiving system for someone who is a rehabilitated
criminal or anyone who fights against popular opinion. You can arbitrarily
remove trust and never have to add it back again. You can remove trust as
retaliation for anything.

------
ronitronitronit
If anyone wants to meet a good chunk of the Circles team, we are having an
informal get together at a bar that will hopefully become one of the first
vendors accepting Circles - in Berlin, Germany, tonight (Thursday, December
14th) at 19:00
[http://meetu.ps/e/DwzBg/CNd94/f](http://meetu.ps/e/DwzBg/CNd94/f)

Would love to see you there :)

------
sunseb
I like this idea! Bitcoin is broken by design: people don't spend their coins,
and you can't blame them, they would be silly to to that, because Bitcoin is a
deflationary currency. But this universal basic income idea would actually
make people spend their money and we would have a thriving economy. The big
challenge is: how to prevent fake accounts?

~~~
gregknicholson
It would be easy to create a Bitcoin-like cryptocurrency that is not
deflationary. You could make it issue new coins at a fixed rate or at an
increasing rate.

(With cryptocurrencies, you can't _change_ the rate new coins are issued, for
example in response to the currency's buying power. Central banks do that with
fiat currencies, to keep the currency's buying power reasonably constant, or
to affect it as they see fit.)

I don't think deflation is enough to stimulate an economy; you need demand, by
which I mean taxes! You must pay taxes with a particular fiat currency, so
everybody in your jurisdiction needs some of that fiat currency, which makes
it valuable.

If there was a jurisdiction where people could choose to pay their taxes in
fiat or cryptocoin, both would be equally useful. The exchange rate would be
governed by the tax prices.

Basically, if Estonia decides that Estonians will be able to pay their taxes
in estcoin for the foreseeable future, at a rate of 1 estcoin = 0.01 euro,
then 1 estcoin quickly becomes worth 0.01 euro.

------
dominotw
> purchasing power falls all across the world.

Is this true? I am unable to find right google keywords to verify this.

~~~
grp
Try "purchasing power of $your_currency" and you will find stuff like that:

[http://www.visualcapitalist.com/buying-power-us-dollar-
centu...](http://www.visualcapitalist.com/buying-power-us-dollar-century/)

~~~
FRex
This is inflation, (arguably) a positive force in the economy, it's not
universal (see Swiss currency for a nice example) and it's also part of their
own scheme (using the same justification as real life inflation) so why would
they point it out as a problem and then copy it?

------
barry0079
I enjoyed this read far more than I expected. I'm sceptical about the
abusability of validators however. Overall though it makes me wish I could run
a social experiment implementing this idea just to see what would happen.

------
wsxiaoys
This is much like an IOU system (for example:
[http://settle.network](http://settle.network)) , but with automatic money
generation (mining).

------
kaicianflone
Wow truly impressive! If you aren't trading with your friends, Validators are
essentially free of any fraud. I am looking forward to seeing how this can be
implemented because you have convinced me UBI is a technological issue and not
a cultural one. It is clear fiat, and the markets created around fiat were
never built with UBI in mind.

------
SubiculumCode
UBI is capitalistic. Provide an income based on ownership of a citizen stock
title. Let individuals decide best how to invest and spend it, and not let
government control how it gets spent.

------
IanDrake
So basically everybody gets a virtual personal money printer to put in their
basement. Awesome.

How many Ian bucks for your car?

I hope that sounds as ridiculous to you as it does to me.

------
Double_a_92
I like the trust circles idea.

------
danarmak
One way this might fail is through big Validators with misaligned incentives.

Suppose Coins become popular and worth something in the real economy. A big
company like Facebook (or Google, Amazon, Microsoft, etc.) might become a
Validator and endorse all their existing users.

They would do this because it would add value to their platforms. Most people
can't or don't want to use complex new technology (e.g. keeping a private Coin
wallet secure and backed up). Facebook will tell them: just click here to get
"coins" to your FB account every day! You can use those coins to buy things
from / on Facebook, like silly apps or even ad placements. And you can even
convert them to real dollars (at a fluctuating non-guaranteed rate)! What's
not to like? So of course all the FB users will sign up. Maybe FB will even
opt everyone in by default.

Facebook already has a Real Name Policy, what could go wrong? Millions of
people will happily trust the Facebook validator, so transitively almost
everyone will trust them. But creating fake/duplicate FB accounts is actually
easy (they might be removed, but not immediately). This will drive down the
global value of the coins; businesses other than Facebook will stop accepting
them. Eventually the whole project will become useless outside FB, or several
big inter-operating social networks.

And when this has happened, even if everyone 'in the know' agrees that
Facebook is a lousy validator and should not be trusted, they will never
convince all their non-techie friends to dis-trust Facebook, so everyone will
keep trusting Facebook transitively through no fault of their own. There are
several reasons for this:

1\. People who created their Coin accounts via Facebook might not even have
their private keys locally. If they're just using their Facebook accounts for
authorization to access their coins, they can't open a non-FB Coin account
without actually closing their FB wallet. But FB might not let people (or make
it easy to) close their FB wallet without closing their whole FB account.

2\. If a user dis-trusts FB, then FB can (as an automatic policy) dis-trust
them back. Then, anyone who dis-trusts FB risks not being able to spend their
coins on FB anymore. And we know that it's impossible to coordinate an exodus
from FB; when people have to choose between FB and <the rest of the online
world> many choose FB.

3\. FB can sell certain services to users and demand they pay via their
personal coins, not someone else's. They would bill this as making sure each
FB account can only buy up to X resources of some kind, e.g. pay-for-use items
in a competitive online game. Then if you choose to dis-trust FB, and they
dis-trust you back, you can't buy those services at all; that's a powerful
incentive to manage your Coin account on FB and not to leave.

4\. FB might make it cumbersome or just impossible to pay for FB services from
non-FB wallets.

Counterpoint: if people pay FB in Coins, then FB will amass a lot of Coins. It
will want to be able to spend those Coins elsewhere (e.g. convert them to
dollars). That's an argument that FB would want to keep the value of Coins
outside FB high, contrary to my scenario.

Counter-counterpoint: if FB has a big enough network of partners / businesses
willing to buy Coins with dollars, it won't care about the free Coin market.
Who would want to buy Coins? Anyone who wants to use them to buy FB services,
in more than the amount they get to their private UBI account! So e.g.
advertisers and publishers.

------
Gallactide
I have a fundamental question about the technology.

As soon as a single centralized service such as any business accepts trust in
order to facilitate payments, they are added as a link of trust no?

Wouldn't that lead to any fake account being able to simply "spend money" in
order to fundamentally legitimize their Personal Coins?

Wouldn't this mean that anyone can Mint literally any amount of coin types and
purchase literally anything, only for each of those currencies to gain the
same global value?

EDIT: I have no issue with the Economic principle of UBI. I believe if
appropriately applied it is literally the absolute final goal of any organized
civilization.

EDIT 2: I am actually quite concerned about this model. Several large
initiatives seem to have backed a system that not only is broken by default
but literally legitimizes discrimination. I don't mean that in some whiney
"everyone should be equal!!!!!" bullshitty way, but literally.

This model places the burden of trust on any acceptor of the currency, i.e.
vendor/service. This means that essentially any business that IS concerned by
their contribution as legitimization of so called Scammers will increase
scrutiny drastically. Any orphan/Retiree/Huge segment of population of any
demographic that might not have any fundamentally trusting connections are
fundamentally unable to spend any amount of currency.

This would REQUIRE a form of centralized Trust which would need to be
regulated in the identical way ISPs and Hosting providers handle SSL
Certificates. Some form of fundamental right to trust by citizenship or other
inherent association with a trusted entity simply by existing would be
absolutely required. Which essentially leads to a regular currency within a
few basic steps of reasoning, since eg. governments trust one another, and
each of these trusts any citizen. Immediately the exact same existing
financial scenario.

EDIT 3: I mean this is essentially the EXACT same model as any centralized
Stock Exchange. Except instead of shares in a central service/business we get
shares in individuals. Which leads to absolute nightmare scenarios where
highly connected individuals are inherently more valuable and produce an equal
amount of currency, however at a far higher value.

Seems familiar no? A CEO that acts as the central trust for a corporation
(lets ignore the obvious issues with having a potentially temporary individual
as the inherent financial representative of a registered business) would
require to be trusted by all employees in order to redeem their pay checks.

Meaning that CEO can spend his personal coins at a far higher value since they
are inherently trusted be a large amount of individuals. Meaning there is no
UBI and everyone still has currency, except instead of being backed by the
hypothetical stability of a sitting and established authoritative structure
it's affected by the hilariously unstable social graph of the world.

We NEED to research systems like this, I CANNOT STATE THIS ENOUGH, but we
can't let good intentions lead to an even worse scenario than our current
model for fiat currency.

------
majewsky
Bingo.

------
shaunxcode
yes! keep going!

------
hnarn
This is peak Hacker News

~~~
the-dude
Upvoted. I am missing the machine learning though.

------
alexasmyths
I don't for a second see how the issues we're trying to solve have anything to
do with the technology or even social contract of currency.

------
brndnmtthws
Why not just buy Bitcoin and hand it out to people? What actual value does
this add?

~~~
adjkant
That requires initial capital. If people were to use this globally, it would
theoretically be an opt-in system that would put everyone on a level playing
field (pending start time).

~~~
brndnmtthws
Indeed, it does require capital. That's kind of the point. Why would you hand
out something that's worthless? What use is that to anyone?

~~~
adjkant
Bitcoin was once just as worthless as this coin. All of this is based on
confidence in the value. So were all other currencies minus the value of the
paper and ink itself. In order to actually get people to use this, you need an
argument (not a technical one) about why people should use this. I can imagine
one focusing on an accessible UBI and global resource reset. While that
argument would eventually be important, this paper obviously has other flaws
to consider before getting that far ahead of getting into the nitty-gritty
there.

~~~
brndnmtthws
Right, but my point is that you don't need to create a new coin. Just use one
of the many well-tested existing ones.

~~~
adjkant
You do in order to enable UBI directly in the protocol, which is the goal of
this paper. You can't regularly distribute Bitcoin to all users without first
acquiring it. I think this is one of the few examples of a new coin that
actually is needed in order to accomplish its goals. Of course, whether it
actually does that successfully is another argument entirely.

~~~
brndnmtthws
It seems like the real challenge here is solving the identity issue. That is
something which would require a brick and mortar solution, and those have
existed for quite some time with varying degrees of success. Identity
companies like Equifax have done a shit job, and they try to pass the
liability on to end users who then have to deal with the fallout of fraud.

There are a few identity management on the blockchain startups already, but
I'm not sure any of them will be more successful than the DMV.

~~~
kaicianflone
The White Paper solves the identity issue under the Validator section.
Equifax, the US Govt, or a State Govt could start a validator and Companies
that trust the Validator will accept any coins that are validated by the
Validator.

~~~
brndnmtthws
That sounds a little too magical. Solving the identity problem is the biggest
challenge here.

------
dsr_
Oh yes, this will certainly solve a problem.

Anybody know what that problem is? Because the author(s) of the paper haven't
mentioned it.

~~~
nck4222
>The Circles Money System was designed to get started creating a UBI economy
today. We believe that the combination of resilience and global accessibility
afforded by blockchain technology is a key catalyst that makes a Universal
Basic Income achieveable within the next generation.

Sounds like they don't trust governments to quickly implement a UBI, and they
want this to solve that.

~~~
rlanday
Why would I want to invest in BobCoin with all its associated trust issues
when I can just buy Bitcoin and keep doubling my money every few weeks,
forever?

~~~
nck4222
I'm not sure why you think Bitcoin is so trustworthy. Personally, due to the
extreme volatility, obvious price manipulation, and outright theft of bitcoins
with no recourse to get them back, I find it extremely untrustworthy.

I have no idea if this personal currency will be more trustworthy.

------
bitwize
The only way to make this more Hackernews would be to implement it in Rust and
somehow run it on human gut bacteria.

~~~
castis
You forgot to mention all the comments that add almost nothing but noise to
the conversation.

~~~
carapace
Like these three? ;-P

------
jaworrom
UBI is a pipe dream and will never happen. If people would quit spending all
of their time dreaming/wishing/hoping UBI becomes a thing, and instead used
half that time on building/delivering value to people in the marketplace,
they'd never need UBI in the first place.

"Opportunity is missed by most people because it is dressed in overalls and
looks like work."

~~~
hectorlorenzo
Is your central thesis that poor people are poor because they don't work hard
enough?

~~~
jaworrom
Mostly, yes. Opportunity is abound for those who wish to seize it. Regardless
of your background/upbringing, you hold the reigns and control your life's
destination. This is what needs to be emphasized.

I am one of those who did not come from means of wealth. Much like many of
you, I invested my time building skills and learning so that I could get
myself out of that situation.

~~~
grasshopperpurp
Survivorship bias in full bloom.

[https://www.youtube.com/watch?v=e68CoE70Mk8](https://www.youtube.com/watch?v=e68CoE70Mk8)

~~~
desertrider12
To be fair, a lot of the UBI supporters commenting above are making similar
assumptions. They think of the freedom that UBI would create for them as
generally well educated, smart, creative people. In reality I'm willing to bet
we would end up with Idiocracy after a generation or two, not a creative
utopia.

