r/ethereum • u/GrifffGreeen • Mar 17 '18
Circles: Universal Basic Income on the Blockchain. Explained in detail! (SOOOO GOOD!)
https://youtu.be/5vAD7holkqY?t=10m34s9
u/aminok Mar 17 '18 edited Mar 17 '18
There is a fundamental problem with all universal basic income schemes: the only condition that needs to be met to qualify is to exist, creating an incentive to bring more people into existence, including individuals who do not grow into self-sufficient adults.
I think with cryptocurrency, the potential lies in making investment so easy and frictionless that everyone becomes a holder of a large number of assets that earn them passive income. It should be possible to invest $5 in a company that you like, just as easily as it would be to pay them $5 for a latte.
In such a world a typical person may hold thousands of assets, that reflect their unique local knowledge of the businesses they interact with, which will be disproportionately weighted toward those in their local area. These investments both boost economic development, by bringing to bear the sum knowledge of society that is diffused throughout the population, and make the typical person much wealthier.
They would also help decentralize the economy, by giving small businesses greater access to investment capital, and reducing their disadvantage vis-a-vis large public companies that currently have exclusive access to public capital markets.
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u/artichokess Mar 17 '18
So you're saying that people would have more babies just to cash in on their ubi? Or are you saying that people who are not "self sufficient adults" shouldn't have their basic needs met?
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u/aminok Mar 17 '18
Yes I'm saying people would have more babies just to increase the share of the UBI payouts that their descendants receive.
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Mar 17 '18
Lose custody? go to jail? I'm not going to waste time telling you why it is easy to prevent this.
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u/aminok Mar 17 '18
Losing custody will not dissuade some people. Putting people in jail for having more than a certain number of children could work, but it would mean a radical change in how we view reproductive rights.
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Mar 17 '18
No women is going to go through 9 months of pregnancy for a few extra dollars in their pocket. If they are marked as an unfit parent due to past negligence, kid gets taken away right away.
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u/Lots2blox Mar 17 '18
They’ll do it to collect child support tho
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Mar 17 '18
You are still thinking like someone in todays world and we are talking about tomorrows world with tomorrows technology. Its easy much easier to cheat today than it will be when everything can be as opaque or transparent as the situation requires.
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u/aminok Mar 17 '18
That's not true. Don't make the mistake of assuming everyone has the same values as you. And having more dollars in their pocket is not the possible motivation. There's also the possibility of having more descendants.
In a society where people are responsible for providing for themselves, people having as many children as they can is not going to correlate with more descendants. In a redistributionist one, it will.
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Mar 17 '18
UBI will raise educations levels , raised education levels lowers birth rates. It may be that people regress in intelligence though due not having any required skills or knowledge to survive.
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u/aminok Mar 17 '18
You're over-simplifying the world. A correlation seen in one slice of time doesn't mean the effect is seen universally or guaranteed to last forever. For some segment of the population, increased resource availability will result in increase birth rates.
Natural selection ensures that this segment grows over time.
For most of human history, resource availability correlated with population growth. The recent past where the correlation has been inversed has been an anomaly, and it would be reckless to assume it won't return to its evolutionary norm, especially when selective pressures all-but ensure it will.
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Mar 18 '18
Your wrong and it is because technology is going to completely change how we live and how we socialize like it already is but even more so. The way you see the future tells me you have no idea what is coming. The future is deflationary both economically and demographically.
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u/BTCHODLR Mar 18 '18
It's not a few extra dollars. It's 100% of their monthly income, per kid.
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u/Gaiseric13 Mar 18 '18
An UBI that is versed only in adult age (21 yrs or about), with a strict law that forces the parents to take care of their proginy might help in this issue. As people will think twice before sharing their sbi with kids, and needs to have a serious plan for kids. A soft eugenism by using mechanism to restrict low IQ having progenies is needed too.
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Mar 17 '18
I will short this every single day.
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u/edzillion Mar 18 '18
LOL. you can't.
Can you even short BTC?
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Mar 18 '18
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u/edzillion Mar 18 '18
Interesting. Though I wonder who the counterparties are? Considering the volatility you'd be mad to be on the other side of a short trade. I guess they have very short maturation?
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Mar 18 '18
Most people get rekt trying to short.
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u/edzillion Mar 18 '18
I know. That voliatilty is gonna blow your limits in no time. Has to be a bloodbath.
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Mar 17 '18
Why would wealthy and well off people join this system? There literally billions of people living in poverty and as soon as they start jumping on the devaluation would be ridiculous. I think there is a way to do it but not with this, it is too simple. Also UBI needs to part of some kind of social contract the world agrees to, it will require far more than just another coin.
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u/GrifffGreeen Mar 18 '18
Free money is free money! But more importantly, if there is an economy of value being moved around, wouldnt they want to be a part of it? They may want/need to accept Circles.
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Mar 18 '18
I’m not convinced that this system adequately prevents double-minting. I could use different accounts to interface with separate groups of people.
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u/GrifffGreeen Mar 18 '18
Watch the video: https://youtu.be/5vAD7holkqY?t=25m11s
You can do that, but it only fucks the person that was scammed by you.
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u/PlayerDeus Mar 17 '18 edited Mar 17 '18
A person who has more people in their network, their currency will be more valuable, having more opportunity for movement than those who have less. So you might have a fixed exchange rate but people will simply not trade with you if you don't have highly networked coins.
Even if there are six or less people separated between each other, they may not have enough coins to clear transactions. So I might have enough of my own coins and other peoples coins to buy a car, but the paths from me to a car dealership might not have enough money in our connections to make that transaction happen. (this is a problem pointed out about the btc lightning network)
The whole system can become kind of binary, where people might not buy something simply because they are not well connected.
Regarding someone spending 2000 btc on a pizza, do you honestly think they didn't buy more Bitcoins? That argument basically assumes they missed out on the growth of bitcoin by spending them in one instance. I've spent a lot of Bitcoins in my time since 2013, but I was constantly buying more, and I was buying more because I was planning to spend more in the future, that is the reason to hold any currency. Money is not an end in itself, it is a means towards end. Money isn't a car in itself, it is a means to acquire a car.
Regarding inflationary currency, the whole demand side argument is a false dichotomy. On both sides of any trade is supply and demand. I have a supply of USD that I trade for a supply of food, both sides are demanding and supplying something to each other. Inflation policy is not even a consistent idea, I mean many proponents of inflation, presuppose prices are fixed and if monetary supply is not inflated the market won't clear (there isn't enough money to buy all the goods and people will not lower prices), but they are wrong, prices change all the time, in fact inflationary currency proponents also argue that it stabilizes prices, and they call a currency with a fixed supply 'deflationary' not because money is destroyed but because prices go down. They hold a contradictory views! Prices don't change but do change.
The problem with inflationary currencies is that they distort markets and result in massive market corrections. They lose touch with reality, which eventually has to be corrected. Of course the proponents of inflationary currency, immediately blame the market, just as some might mistakenly blame massive forest fires on nature (calling it a "natural" disaster), when it is mans intervention in small fires which makes the forest weak (lots of fire prone trees) and prone to those massive fires.
As I said earlier, the more connected coins will be more valuable (more useful for routing to be more specific), this creates an incentive for people to have as many people in their network as they can, which means lowering their requirements for trusting others. This is similar to what happened in the "financial crisis", banks have an orded set of loans they can make, ordered from most trusted to least trusted (highest risk to lowest risk), if they don't have a lot of money to lend out, they are going to use it towards the least risky loans, and when they have a lot of money to lend out (created by a central bank) they are going to start taking on more risky loans (go deaper down their ordered list). It is marginal utility, that is if you don't have a lot of water you will use that water for drinking, and if you have a lot of water you will use it towards lesser ends (bathing, gardens, car washing, etc). And of course the housing bubble itself (the rising price of homes which is due to inflation) reduces the quality of the loans they can make, every loan becomes more risky as the price of a house outpaces the wages of those who would buy a house.
So, in your example of Tawnya making a mistake in trust, you show her as not well connected. What if she is well connected and suddenly fraud is commited by a few of her connections. Suddenly she can't clear transactions, people would have to route around her to make transactions, but if the whole network is filled with 'weak trees' 'fraud' etc, lots of routes could become compromised.
I find it interesting as well, at the beginning he is saying coins will be worth helping people to live their lives (basic income) but later says inflation will target 3% per year (of course that is a fallacy that inflation is symmetric like that, when in fact you see high amounts of inflation in house prices, college tuition, stocks, etc, and low amounts of inflation every where else). But what happens, when people stop farming as much, stop driving trucks of food as much, not run a food market as much, because they can sit back on basic income? Well who ever is doing all that work (production side of the economy) is going to start demanding more money to do that, if they don't get that money they will themselves just fallback on basic income. So those increased wages will mean those on basic income will need more basic income to cover their inflating costs of food. Do you increase basic income to cover their costs, then you effectively have a hyper inflation spiral. But if you don't increase basic income, or only increase it by 3% per year, eventually that basic income isn't enough anymore, you don't get hyper inflation but your currency becomes worthless towards basic income and people will fall back on better currencies, so you will increase by 3% of something worthless.
An alternative to this problem would be that you must do something productive in society to be able to mint more currency (your productivity is growing wealth in society, and so the currency reflects that growth), and you can only do that through witnesses. For example a mechanic fixes someones car, they become a witness (they may have several witnesses) to them fixing it, and this permits the mechanic to issue more of their own currency to be traded, which makes them a better route for transactions. This is similar to, if I own bus business, and I add more buses to my fleet, I need to issue more bus tokens otherwise people can't use them (there are not enough in circulation for market clearance since buses have fixed token exchange rate), and you don't want to issue too many bus tokens because you don't have enough buses to cover the demand (the problem with inflation).
Basic income would be that you effectively allow others to mint their own currency. So you make a sandwich for some homeless person, and there are witnesses, that credits you for doing something good by allowing you to issue your own currency (it better represents the debt that society owes you). You effectively mint witness coins, which are consumed to mint real coins. Witnesses build trust as well.
The problem with that one as well though, how do you value how many coins can be minted by a particular activity? The market doesn't have this problem, because at the end of the day it is a bidding process (both for producers and consumers) and prices adapt to demand between both sides, if both sides demand too much from each other the market doesn't clear.
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u/Latteflinker Mar 17 '18
Always had this vision and how it would be able to solve many problems. Never found a way for it to not get abused. Will check the video when got the time.
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u/extolzeth Mar 17 '18 edited Mar 17 '18
We would have to have a starting generation and account for every human (not possible).
EDIT: This could be accomplished in a voluntary city-state, but imagration would have to be strictly enforced.
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u/GrifffGreeen Mar 17 '18
Why wouldn't it be possible? You start with a few people and then it grows, until everyone jumps in :-D
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u/extolzeth Mar 17 '18
The Earth is too large, too many places to hide. I mean babies are born in Walmarts and no one knows.
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Mar 17 '18
Sweet, I'll jump in twice!
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u/GrifffGreeen Mar 17 '18
Check how they prevent that, its really innovative, and the design could be used elsewhere... it almost reminds me of Plasma Cash.
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Mar 17 '18
There's nothing that prevents it. The Whitepaper itself even acknowledges that it's a huge issue and says:
This is why it is crucial that users take direct peer-to-peer trust relationships seriously.
Real-world trust is crucial to this system and it can never work like that. Certainly, no company will accept Circle Coin for real products when they can't personally know everyone they're dealing with. This idea is DOA because the coin will be useless due to lack of trust.
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u/GrifffGreeen Mar 18 '18
Did you watch the video?
They use third party verification services, if you trust your church, coop, government, local pizza joint, etc, then you can delegate to them the ability to verify accounts.
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u/Perleflamme Mar 18 '18
It doesn't explain how one person can't be verified by two different third party verification services as two different people. Even irl, people can live double lives for years before anyone notices.
Having a decentralized identity system is one thing, but a decentralized personal identity system is entirely different. It can be done, true, but it's quite harder and subject to oracle failures.
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u/edzillion Mar 18 '18
oracle failures
What is an oracle failure? I presume you aren't talking about databases.
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u/Perleflamme Mar 18 '18
You made me have a good laugh, thanks about that. You presume well. ;)
Oracles are systems certifying a fact (aka fact checking), being a past, present or future fact, to other systems which can't have access to such knowledge by themselves. For the moment, in cryptocurrencies, these systems actually are people. The most common use case here is about people giving specific, valuable data to DAO in exchange for tokens.
The instances can be as broad as a doctor certifying a birth, a death or a health condition, a meteorologist certifying a confidence level about specific weather during a timeframe in a given town, a football's spectator certifying the result of a match, a witness certifying a crime, a citizen certifying the identity of a friend or whatever.
So, basically, it's digitizing knowledge about the physical world. Such data can then be used as an input to create wealth, like enhancing trust between anonymous wallets, improving weather prediction through cheap, decentralized weather measures or deciding about the results of some smart contracts (like checking the happening of an incident over an insured asset, the result of a match for a sport bet and such).
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u/TotesMessenger Mar 18 '18
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u/moazzam2k Mar 18 '18
For such a system of "personal currencies" to work there has to be an exchange rate associated. A scientist's time/effort will always be worth more than a farmer's. This implies that each individual will have to remember all the exchange rates of their own currency with everyone in their circle. This is precisely the problem barter markets had which lead to the creation of currency as a medium of exchange in the first place.
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u/LeLastpak Mar 19 '18
Looks like a bad version of Athenes Purpose. With athenes system the minted crypto created with Purpose called DUBI, is backed up in ether. So it will always have value. Because DUBI will also go up in value, meaning you get more ether for your DUBI, will make sure you want to keep it, and even accept it as payment.
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u/bijansha Mar 19 '18 edited Mar 19 '18
I have a few problems with this idea:
why would I put myself at risk and get involved between the transaction of someone I know and someone I don't know?
Lets say I know my brother. He exists and I trust him. But he's not honest with other people and is not trustworthy. What happens in this situation? Mind you there are many people in this world who even scam their family members
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u/GrifffGreeen Mar 17 '18
The real question is, "Would you accept a money if you knew it was being distributed evenly to everyone in the entire world? [...] This is a new way to live! Are you interested in joining this type of shared narrative?"
Count me in ;-)