By Lucas PenzeyMoog
Since the advent of Bitcoin in 2008, cryptocurrencies have been heralded as nothing less than an economic revolution. Bitcoin believers promised the end of the central bank world order and the liberation of unbanked populations. Fast-forward a decade later, and where we are now is far from where we thought we’d be. In the words of the de-facto cryptocurrency figure head Vitalik Buterin:
“So total cryptocoin market cap just hit $0.5T today. But have we earned it? How many unbanked people have we banked? How much censorship-resistant commerce for the common people have we enabled? How many dapps have we created that have substantial usage? The answer to all of these questions is definitely not zero, and in some cases it’s quite significant. But not enough to say it’s $0.5T levels of significant. Not enough.”
Vitalik points to a troubling phenomenon in the cryptocurrency community: a divergence from the libertarian, idealistic, almost Utopian goals that fueled Bitcoin’s creation. Now the popular conversation is cluttered with price memes, cries of: “to the moon!” and the like. You have to dig deep, but there are still projects trying to use cryptocurrency and DLT to create a better world.
One area that isn’t getting as much attention is perhaps the most ambitious of all: a universal basic income (UBI) distributed in the form of cryptocurrency. The concept can be traced back to at least the 16th century, with humanist Thomas More arguing that a minimum income would be a better theft-deterrent than the status quo punishment of death by hanging. The debate has evolved over the centuries, and current experiments are underway in Finland and California that give close to $600 a month to a test population. While these experiments offer valuable insight into how these programs work, they’re also inherently limited by the transient nature of government appointees. Even if a government-run program is successful (and there have been many) the inefficient distribution systems and ever-changing whims of the electorate limit long-term efficacy.
Enter the small number of projects aiming to sidestep governments and bootstrap a grassroots movement to ensure a minimum income for the world’s poor. The list is small, numbering three organizations at the time of this writing: Circles, Manna, and Project UBU. They all go about tackling the problem in a slightly different way, but the end goal is the same: distribute cryptocurrency for free, in the hopes that it will lift the world’s chronic poor out of the deadly cycle of inter-generational poverty.
“It’s like there’s an invisible wall around nearly half of the world’s population who were born into the poverty trap, and the overwhelming majority, 99.99% of them never escape because they do not have the opportunity to do so.” – Justin McCarthy, Chief Executive of Project UBU.
Of the three major projects, Project UBU appears to be the most polished in terms of its presentation and economic roadmap. Like most cryptocurrencies, Project UBU is aiming to deliver value using Metcalfe’s law, meaning they need to grow a sizable base of users in order to create a network of value. To do this they will introduce two tokens: the UBU, and the UBX. The UBU will be the token of exchange, with participating vendors eliminating inefficiencies by selling goods and services in whole or in part for UBU tokens. The UBX is the token of value, which is what shareholders and investors in the company are remunerated with. Since investors are rewarded with UBX and not fiat, the creation of value behind the UBX is paramount for the company.
Longevity is key to the success of any UBI (or currency that matter), so project UBU will eventually hand over operations of the company to a DAO, which would assure the maintenance of the network for as long as there are users. This overcomes both the shortsightedness and the inefficient distribution model (taxes) of government-run programs.
While Project UBU may be the farthest along of the small number of UBI cryptocurrency initiatives at the moment, the good news is that there’s room for many players in the space, as poverty is a truly global epidemic. Only time will tell if these projects bear economic fruit, but they already have a leg up on the government-run programs we’ve seen so far.
Lucas PenzeyMoog is a longtime crypto-enthusiast since first getting involved with Bitcoin in 2011, and currently serves as the Director of Strategy at Emerging Insider Communications.
Image from pixabay
