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Universal Basic Income On Blockchain?

Universal Basic Income on Blockchain?

Is a universal basic income the solution to a rapidly automated world and could blockchain technology help to deliver such a scheme?

Robot to worker ratios are increasing rapidly around the world with a global average of 66 robots per 100 human workers. The beginning of this automated era saw huge one off investment costs sucked up by major manufacturers but now almost 30 years on, the cost of the implementation has massively decreased meaning mass adoption of automation is squeezing an already pushed labour force out even further.

The developing world is most at risk from the changes, which I always find a surprising thing with their abundance of labour resources they still choose to force them out, in favour of robots. I always wonder do they not realise they are literally inventing themselves out of work? And that those people will simply cease to have a purpose. The developed world is not in a particularly better position and once again they seem to be inventing there way out of work.
To be honest — this is old news. But whilst once, we only considered manufacturing to be the prime candidate for automation, the robots are slowly being adapted to perform more complex and also repetitive tasks once undertaken by humans. It’s becoming obvious that the problem is bigger than manufacturing.

When we look at the list of jobs being affected and soon to be affected there are some surprising areas. For example in the USA they put the number of people working as insurance underwriters as 99% at risk and 97% of fast food workers as at risk of losing their jobs. The knock on effect of such a massive job, income and taxation of wage changes would no doubt leave a mark so big that a solution must have been conceived on be in conception by now. The real question is — how do we look after our workers, when there’s no work?

A robot chef in California was taken off line in just 2 days for being to slow.

The answer to this question comes in the guise of a — Universal Basic Income (UBI). By definition a universal basic income is a fixed amount, at a level sufficient for subsistence, given by the state to all its citizens regardless of income or work status. Most current schemes propose that purchasing power be distributed at scheduled intervals — a week, month, or even a year. However there are counter arguments that suggest a lump sum payment perhaps when you turn 18. The main issues revolve around how much should be given, how much it would cost to distribute and how governments would actually finance and then deliver such schemes.

In answer to how much should be given, there is a basic answer — as much as is needed. A figure of $10,000/year seems to surface often, but Switzerland for example has proposed a $2,600/month whilst Kenya is testing a $1000/year figure. There are also costs associated with actually distributing the funds to the population. In a country like the USA it is estimated that it would cost about 3.2 trillion to distribute a $10,000 UBI to all citizens. If however exclusions were made for children, households earning more than $100,000 and retirees receiving social security then the figure would fall to $1.5 trillion. Due to the scale of universal income, funding would have to come from a variety of sources. Carbon taxes, income taxes, VAT, negative interest rates, earning from investments, decreases in military spending and resource based revenues are all options currently being discussed.

UBI is a very forward thinking idea but it’s time is coming. However most support is for a UBI based on government fiat currencies like the Yen, Dollar or the Euro. It is almost exclusively locked into a traditional welfare system — as a way to address layoffs expected from automation, or as a way to reduce government welfare bills.

But what if UBI could be distributed not in euros or dollars, but in a cryptocurrency running on a blockchain? What if this UBI cryptocurrency changed the way money works by being created directly in the hands of the people, so the financial system is built from the ground up, rather than controlled top-down by banks and governments? It does sound very idealistic, but given the usage and rise of cryptocurrencies in the last few years the idea no longer seems to radical.
There have already been several attempts to develop a UBI using blockchain technology. For instance, in 2016 the Grantcoin Foundation launched a tokenised model as an experiment that anyone could sign up to. A similar proposed model is Circles, which has seemingly still not got past the white paper stage.

The new economic age is being powered by the internet and blockchain is touting itself as the best decentralised platform available. As geopolitical landscapes continue to shift a number of inherently decentralising technologies are coming online.

Blockchain is the technology that has the potential to bring all these other developments together. Blockchains are not owned by any one authority, so the applications built on top of them need to be governed by their users. If your not familiar with blockchain technology basics it would help at this point then to take a quick look at the education section on our website.

Cryptocurrencies represent a massive opportunity to redesign money for the first time since the year 1450 and the movement has been well underway since 2008. This is important because fiat monetary systems have one big design problem that could ultimately cause their downfall. Just about every Dollar, Yen, or Euro in existence is created by commercial banks with accompanying debt that must be returned with interest. Money is literally rented out to the population, until it is finally cancelled out when people pay back their debts with interest. This system leads to both local and international wealth inequality, but it has remained in place for centuries because it stays true to capitalism’s main objective of prioritising the creation of more capital above all other things. Unfortunately this method of business is also a driver of climate change and ecological collapse, since the endless reproduction of capital as we do it now inevitably causes depletion of natural resources and we, as a planet are currently 64% over demand for natural resources.

Over the last two years, cryptocurrencies have made a lot of people, very rich. Yet it seems like all of this is just creating another set of top percentiles who are wealthy, while most miss the boat completely, and this is the complete opposite of what many of the early adopters had envisioned. Rather than creating a new class of rich, the blockchain was supposed to emancipate humanity and aid in the distribution of wealth.

Traceability is very important for such a UBI system to work efficiently and in principle it would be a clear advantage over fiat currency welfare systems, since the cash economy is only partially measurable in terms of mapping demographic groups to purchase/usage patterns.

A currency solely created to administer a universal basic income would need to have some very distinct features in order for it to be appropriate and fit for purpose. It would need the ability to be changed into other currencies, therefore any coin created for this reason must be usable on the most popular and trusted exchanges. It would need to be easily distributed to all eligible citizens in the network. Thus, a wallet that accepted the coin would need to be created, or a popular wallet provider would need to be onboard. It would also need to be accepted by all businesses that provide shelter, food, clothing and healthcare. It’s also important to remember that this technology is useless to people who don’t have access to the internet or a device generally, and this could be a major stumbling block as those in the most need would usually fall into this category. Although recent research indicates that smart phone costs are falling and ownership is rising across the globe, especially in areas of low income.

The blockchain does, in theory, seem to provide the perfect platform for a UBI system to be delivered and flourish. The details of implementing such a system are still fairly fuzzy and there doesn’t seem to a be a clear vision as yet. It is worth mentioning that currently there are feasibility studies and trial projects being conducted in The Netherlands, Kenya, India, Switzerland, France and Finland for example. But currently these tests are focussed on the feasibility of financially supporting such a system and looking at the best ways to deliver. In other countries such as Alaska, UBI systems are actually in place, albeit not on blockchain, but fully working and showing real world results in regards to lowering numbers of people living below the poverty line and children going malnourished.

The system appears to work but can blockchain bring much needed clarity to the implementation?

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