How Bitcoin Could Make Distributing a Universal Basic Income Actually Possible
Future robots will nab your job, but cryptocurrency could save your income.
In today's political climate, you might laugh at the idea of doling out basic income to everyone on Earth. But cryptocurrencies like Bitcoin have technological quirks that make the utopian dream easier. Or at least more efficient.
There are a zillion reasons why people think universal basic income is an attractive welfare option—futurists like it because they're worried robots will wipe out all the jobs; policy wonks like it because sending everyone a no-strings-attached check is a bureaucracy-free way of eliminating poverty. But despite numerous attempts, it hasn't panned out on a large-scale.
Greg Slepak thinks this is partially due to government incompetence. "Imagine needing to ensure the safe delivery of $1,000 to every individual on Earth. Our current system, which manages to "lose track" of 2.3 trillion dollars, is not up for the task," said Greg Slepak, developer for the okTurtles Foundation, which works on a handful of power-distributing internet projects based on blockchain technology.
Cryptocurrencies like Bitcoin, on the other hand, can be programmed to carry out certain tasks—say, periodically pay dividends to all of its members. This makes can makes welfare payments much cheaper. "Basic income, and especially universal basic income, requires a secure, tamper-proof ledger that can be audited by anyone to ensure the safe delivery of funds," Slepak said. And that's one thing cryptocurrencies provide.
So there's efficiency. But there's one other key to the idea. While politics requires taxes and political accord, cryptocurrency is an opt-in method of efficiently distributing funds free of coercion. The opt-in system doesn't require passing legislation that affects everyone.
With this in mind, Slepak developed Group Currency, which outlines a few rules for cryptocurrency-based universal basic income systems. A Group Currency must identify all members (because you don't want any one member to receive multiple incomes). It must provide a basic income. It must be transparent. The last one is a cinch for blockchain technology, because the ledger is laid bare for all to see.
"Basic income, and especially universal basic income, requires a secure, tamper-proof ledger that can be audited by anyone to ensure the safe delivery of funds."
UCoin is one implementation that models the economic paper Relative Money Theory. Basic income dividend payments are baked into the currency itself so that members merely need to own the currency to participate. They receive an income for being a "human of the monetary Community."
Each member must be identified using web of trust. The cryptographic concept ties a public key to an identity in a decentralized way—without trusting a certificate authority. A current member must vouch for the newcomers to the community. And then the peer-to-peer network, again rather than a central entity like a certificate authority, regularly confirms the user's identity, like to verify that they're still alive.
Now, cryptocurrency veterans will groan at the thought of another altcoin, but Group Currency can play out in a myriad of ways, including over Bitcoin. Swarm's DCOs claims to provide a basic income, although Slepak thinks the inner workings need further explanation. And it's conceivable that something uCoin could one day be tagged on to Bitcoin as a sidechain. Just imagine your favorite altcoins (dogecoin, pizzacoin), but interoperable with Bitcoin so you don't lose the network effects.
Then there's Ethereum, which just launched last month. Slepak called it an "ideal platform" for basic income solutions like Group Currency because the platform has many more built-in programming tools than Bitcoin. (And others are excited about the possibilities as well. Ethereum boasts the third largest crowdfunding sale in history at the time of writing.)
Beyond the crypto realm, universal basic income has seen a little traction. Dutch city Utrecht plans to roll out an experimental program by the end of this summer. Switzerland's contentious basic income referendum was voted down in 2013, but it seemed to have broached the topic. And then there's Alaska.
Hardly a week goes by without a fiery opinion piece in the news. Still, it's difficult to get everyone on board.
Slepak argues that the technology's appeal is that—given you can rally enough interested people, which is a big if—any group can provide their members with basic income efficiently and immediately. Furthermore, future tech could make it easier to implement basic income. For instance, okTurtles is working on a simplified version of Group Currency that provides member with basic income regardless of the currency they use. They'll announce it on Twitter when it's ready.
The idea feels far-fetched and there hasn't been significant movement yet. Still, it makes you wonder whether tech will be running the welfare show down the line. A cryptographically-guaranteed income certainly makes the idea of a robot takeover easier to swallow.