Bitcoin Forum

This coming July 1st marks the 70th Anniversary of the Bretton Woods Conference that gave rise to The World Bank with the mandate to end poverty in this world. They've failed, and continue to fail, miserably in my estimation.

I've for many years thought that this could be achieved through the power of compound interest. I've had an idea that by using compound interest as a fund/scholarship that could be set in motion on an individual basis when that individual reaches their first birthday.

I won't bother you with the numbers at this time unless there is some interest in going forward in an attempt to push for universal adoption of BTC and building the structure on the blockchain. Suffice to say that the plan requires 100 years to reach full benefit to all people born to this world.

My question is twofold.

1; can there be a consensus created to allow for compound interest to work within the blockchain for a single given purpose? [I realize compound interest can be simplified as inflationary but imo it is paramount to find a way to ratchet up the interest in bettering the lives of all peoples to ratchet down unrest and war]

2; will such a thing as tracking individual fund/scholarships on the blockchain/sidechains cause damage to it? [given that we have 100 years to work out the bugs that would occur in yearly increments of incoming data]

First, tacking world poverty is such a huge endeavor that I don't think it could be finished in 70 years. I don't see that it's failing miserably - though there are still many unbearably poor countries, nowadays being born in certain parts of the world (Europe, North America, Oceania, Japan, Korea) is having the certainty that however poor you become during your lifetime, you won't die of starvation. This wasn't true 70 years ago.

As for your questions:
1 - I can't imagine consensus on a single purpose, even if the goal is the same there will always be different thoughts as to how it can be reached
2 - I'm not that tech savvy, but I imagine if the blockchain technology keeps being used it will be possible in the future (if such a common purpose consensus is reached in the end)

very interesting thread
thanks for starting it

look forward to input from everyone, more knowledgable than myself

okthen maybe I can take another tac with this. This idea was more for improving the chances of all individuals to to better their situation at pivotal stages of their lives.

At the risk of ridicule I'll post here a more fleshed out version I wrote in the early 90's. If it has merit and can be incorporated with the blockchain and perhaps BTC or other store of value coupled with growth then I expect there are those here than can see a way to convert this ideal from one based on fiat and locked to the cause of BTC mass adoption.

Forget the wording in dollars and try to see the gradual adoption of global equality. Of course, as always, there will always be some that are more equal than another. This is just an attempt at bringing the gap between the two closer together.

Any thoughts are welcome.


I call this idea Humanity's Future Fund. And that's what it is. A global fund for humanity, invested in the global market and over time dispersed to each individual person born. An individual trust fund for every person born that begins earning interest from the date of their first birthday until their fifty first birthday.

Imagine a world, not too far from now, where every individual all over the world has the knowledge that they will come into possession, on their 51st birthday, of an economic boon that totals, more or less (depending on market fluctuations) a million dollars. A million dollars to do with what he/she wanted. The idea adds a certain balance of fairness to the other two ultimate certainties in life. Death and taxes.

Imagine too that by a person's mid 20's their fund will have grown to a point where they are able use it as collateral for financing their own passion in life. Whether that passion is simply to further their education, business, leisure or all three. Just the expectation of this opportunity would be something of both school yard and class room conversation from kindergarten to graduation. Surely there will be contention within many conversation but I believe, over all and generally, that such a fund will give humanity an air of forward thinking optimism. Truly a tide that rises all ships and allows all the opportunity to be captain of their own future.

To many the idea of a world where everyone gets a million dollars, for nothing more than living more than 50 years of age, is absurd. "It will cause inflation." My response is simply; "what price for peace?" We have an understanding of the price
of war. The U.S.A. has already spent the amount (required to make this dream a reality) on the war in Iraq. And although many would argue there will be a long lasting benefit to the U.S., and the rest of the world, for it's sacrifice of a half
trillion dollars...and counting. (Not to mention lives) Far, far many more of us have trouble seeing any benefit now or
ever.

Humanity's Future Fund would take that half trillion dollars, and break it down evenly over 50 years. Not 5 years, and invest (not indebt) it in people, progress and peace. But the foundation doesn't need 500 billion dollars to begin. It needs you, and millions more like you. I've simplified the numbers by stating that one percent of the world population (60 million people) committing 50 cents a day will generate the 10 billion dollars required to get through the first year of the Foundation. The same equivalent will be needed each succeeding year for 50 years running to reach the point of exponential sustainability through the next 50 years at which point (100 years) every child born will be the recipient of this Humanity's Future Fund.

Ten billion dollars a year. Not too huge a number is it now? So what is to be done with it? How does 10 billion dollars a year for 50 years translate to every person born being a recipient of this, Humanity's Trust Fund, 100 years from now? If a journey of a thousand miles begins with one step then it is up to me to take that first step by finding a way of communicating this idea in a way that captures not only interest but but the motivation of the reader to act.

Twenty years ago I saw the internet as being the ideal medium from which to put forward this idea. Making Humanity's Future Fund accessible to anyone anywhere in the world is crucial to longevity and ultimate success. I can't imagine a future without the internet connection, which brings us all closer together. The internet is the only platform where the Foundation can allow humanity full disclosure of it's operation at the click of a mouse.

This is all I can effectively ask of you the reader to do is take that act of clicking a mouse and following your own heart in what you would like to do to help in the next steps along the journey. There is so much to do during the first 50 years and I believe that, for a cause such as this, we all have something to contribute in support of the Foundation. Communication, being the first step, is something the Foundation will hopefully will achieve through the efforts of those supporters who know best how to "communicate" on the net.

Getting the word out about this idea will lead to the creation of a legal entity called Humanity's Future Fund and the second step will begin. the Foundation's operations will begin changing humanity's future one child at a time. Sounds slow but quite the contrary. To get back to the numbers and to try to communicate a picture in your mind let me just say how I've envisioned the best scenario.

With 10 billion dollars a year the Foundation will be able to set up one million trust accounts in the amount of ten thousand each. That's one million one year olds, in essence winning a virtual lottery, becoming a recipient of the Fund for their own future. This trust fund will not be transferable to any individual. The individual must appear in person to verify they are the true recipient to collect the matured fund at the age of 51.

I called the process of distributing this Trust Fund a virtual lottery. I can't think of any better term for it. To accommodate one million random selections there would need to be a drawing every thirty seconds of every day of the year. I envision a ticker tape, scrolling continuously, announcing each recipient child every half minute. Imagine the web site. Who's to build and maintain and protect such a site? So much to do.

So, to simplify all that I've said, each year (for 50 years) 10 billion dollars (to be raised in various ways) will allow 1 million children to grow up knowing that they have a personal trust fund that could grow to 1 million dollars over 50 years. So after 50 years there will have been 50 million individual Future Trust Funds distributed. There will be a web site where full disclosure of Humanity Future Fund's activities.

The million dollar figure of the matured fund is an assumption. The amount can be less or more depending on the fluctuations of the global markets and the administration of the Fund. A reasonable target of compounding growth by the rule of 72 (or doubling every seven years) would see a ten thousand dollar fund grow to close to 1.5 million over 50 years. By the age of 21 the Fund will have grown to 80 thousand dollars. From which a one time predetermined limit can be borrowed against the Fund. Assuming there will be lenders who see the Fund as collateral for the loan. It is up to the individual to protect their own interest by making good on their loan long before the Fund reaches maturity.

This may all look to you, the reader, well and good but you don't see how, (with a population growth of roughly 75 million a year today), does just one million a year over fifty years become everyone by year one hundred? Like the simple math of compound interest we use the same principle to create exponential growth of the Fund in the second phase. After the 50th year of Humanity's Future Fund those who are recipients will be required by the Foundation rules to forfeit 100 thousand dollars from the accrued amount of the matured That 100 thousand will now become 10 individual Trust Funds. In other words, what was done for the recipient is now done ten fold for humanity and the ensuing 50 years will see not one million children but 10 million children all over the world receiving the benefit of Humanity's Future Fund.

Because the funds are now coming from the actual beneficiaries after the 50th year there will be no more requirement for the Foundation to continue to seek funds from the public. Humanity's Future Fund will become self sustaining. Year 51 brings new challenges. A growth rate of the distribution of individual Funds by a factor of ten would require a selection process that would need to happen every 3 seconds of every day of the year. I believe such a challenge will be met. As will the challenge, after year 100, of registering every child born so that they and all of humanity will feel the benefits of this rather simplified proposal.

This is the basis of the idea. It will take much effort to see to it's success. The Foundation itself will grow, through attrition, (those who do not collect) and it's mandate will be to live up to it's name. Helping to fund the basics like food, shelter and education for all humanity. Supporting catastrophic relief efforts for both segments of humanity as well as the planet and it's fragile resources. If you've managed to grasp the idea from my style of presentation you can undoubtedly see that this Humanity's Future Fund will grow into an entity with trillions of dollars, all generated from global commerce, with which to affect significant funding for the issue of global poverty. Personally I see no other way and the time to start is now because the sooner we get to that 100th anniversary of Humanity's Future Fund the better off we all will be. Or at least we will be remembered as a giant step toward humanity's collective maturity.   

Technically, what u r looking for, is possible using Ethereum. If you want to do it on bitcoin blockchain, u may take the help of MasterCoin protocol. As far as sidechains are concerned, check blockstream.com.

Haha...thanks Guido...somehow now I feel I've said too much. But not to much for some to munch on.

SpanishSoldier, I've been looking into Ethereum for a bit but I must admit I'm unqualified to understand the technical aspects of such protocols and this ideal is at the mercy of those who see the value in it alone to motivate them into spending their time on such a sweeping long term project. I'm willing to help in any useful way I can.

 “A dream you dream alone is only a dream. A dream you dream together is reality.” John Lennon
   

OK, this is a very beautiful idea, and now I can see more clearly where you're going at.
But considering the little starting amounts that there would be (you won't convince people to donate from night to day), what is the advantage of this system in comparison to a charity?
I think I'd rather give my money to a kid that I know for sure is poor and needs it than to a random child who is very lucky but maybe has a wealthy enough family to survive.

This is just my take on the implementation, and it's specially valid in the beginning of the whole thing. Maybe an option would be to select the eligible people at first, or try it out in a small community where everyone contributes.

Independently of this, I think the idea of combining it with the blockchain is very smart :)

Hard to get people in this world who will work for solely idealistic motivation, rather than some monetary gain.

1. Yes
2. No

Questions for you:

Is your idea that one fund be developed for one person. Like if $10,000 were deposited in an account for one person on their birth that the compound interest would provide for them? Or is your idea that a fund be created for all children (if so, what amount would be needed? How long would the investment period be? What would the pay out rate be?)

Compound interest is a powerful thing...and if grand parents can set up funds for their grand children for this exact purpose it would be VERY powerful. It's tough to get an electorate to devote tax dollars to it but it's certainly a noble and valuable idea, one worth pursuing.

okthen, the advantage over charity has always been that the funds go to the individual but nothing is written in stone with such things. My thinking was to keep it completely unbiased as to who might benefit from this. Those most impoverished and furthest from access to the net could, possibly be reached by some other charitable entity that could enter the child's information (dna identification included) on the parent(s) or guardian's behalf before the child's first birthday. It is the first birthday that dictates the date of entry into the lottery (perhaps a poor choice of words but that is how it must (imo) start.

The benefit of including all is simply goodwill towards the idea as a whole. Creating active participation through donation. In the early 90's I was calculating if 1% of the global population (roughly 60 million) committed to donate the equivalent of 50 cents a day 365 days a year there would be raised close to 11 billion dollars. That leaves plenty of money for hiring compensated skill. Obstacles are only insurmountable limitations of both ingenuity and will.

SpanishSoldier,  There are more men and woman in this word who value the quality of their time spent on this earth over the quantity of the money they've spent. This dream is not mine alone. It's any parent's dream for their children, and their children's children. Much greater minds have tried to solve this particularly human problem. I'm just flinging mud at the wall in comparison.

"The human mind likes a strange idea as little as the body likes a strange protein and resists it with a similar energy."  W.H. Beveridge, British Economist   

I think I understand your intention. That is, give each newborn an endowment that grows over the years. In a system with unlimited growth in the money supply, then the money used to pay the interest is simply created, effectively lowering the value of the money already in circulation. The problem with your proposal is that Bitcoin has a fixed money supply, so the interest paid to each person has to be paid by someone else.

So, to answer your questions:

1. Yes, there could be a consensus that results in this change to Bitcoin, but it is extremely unlikely to ever happen.
2. It is hard to say because Bitcoin is not designed to work this way. It would require implementing Proof-of-Stake for certain addresses, but not all addresses, and a way to limit the addresses to one per newborn, and perhaps a way to destroy or distribute the coins if the person dies.

Possum577, thanks for those succinct answers.

I've some answered your questions in my last post. The duration of the individual "trustfund" would be 50 years. My thinking was that if the rightful recipient did not arrange to collect those funds (after a set amount of time) those funds could be sent in motion to have them reallocated to speed up the process toward the end goal of every child born being a recipient upon their first birthday. I was thinking 8-10 percent average annual growth was not reaching beyond the grasp of reality.  

These funds go back into the "process of eliminating poverty" if the individual trust holder does not reach the age of 51. There is no transferring of these assets through wills, passing on a private key. Only live in person DNA identification unlocks it. No collection say by the 61st year of the inception of that fund, then back it goes into the global fund.

My idealist thoughts were that at some point in the future those who have already enough will give back by donating all or a portion of the accrued trust in their name to any charity of their own choosing. Funds would hopefully be spent on, by the blockchain consensus, population relocation, disaster relief, ecological initiatives etc.

Anyone reading this, please remember when I was working on this using the fiat economy and it's available access to successfully being able to sustain a funds growth through long term compound interest. It seemed feasible, regardless the naysayers. I'm uncertain that the basic idea can dovetail with BTC and the blockchain. But I am feeling compelled to put it on the table.

Bytme, you are not understanding the most important characteristic about Bitcoin - limited supply.
Apart from being decentralized, that is THE most important thing about it.

Interest, and especially compound interest, do not play well with limited commodities.
However, there is a possibility to built a derivatives market where Bitcoin will the reserve.
Within that market one could have interest bearing instruments.

Otherwise, your idea is just as ridiculous as promising compound interest in gold market.
Where is the extra gold (BTC) would come from? Duh...

What you say, odolvlobo, about creating money in an system of unlimited growth, was where I was at then, and my reply was the question can a street sweeper afford a family. The answer was usually yes. My next question was, in answer to the lower value of money, 'then what price peace?'


My understanding is that a BTC could be infinitely divisible, if decided by consensus. Could also it not be an option for the user who pays a fee for a transaction to the miners not also chose, perhaps in the same motion, to allocate a percentage of that transaction fee to go to this cause?

Seems to me that brighter minds than me can decide to, and when to, convert the fiat investments for compound interest back into BTC and the blockchain in uncertain times. Then back into the fiat world when it's prudent, at least until the whole can be supported the blockchain.

If a BTC equals a BTC then what price peace?

subcoin, I'm not sure if you know you're sure in what you say but I don't need to give you the right to say it. That right is something we all share. Until we speak no more.

I think I've said enough to get some folks thinking. Hard.


What joy will your BTC and blockchain bring you in a future world of freedom by death? 


I'm here, but not all here, alla the time,

bytme

Such an option could easily be added to wallets, and without making any change to Bitcoin as long as it is voluntary.

Not hard at all. Ignored.

It's great to want to end poverty and all, but I'm really confused about this idea. I really don't see it working, either with fiat or with bitcoin.

I have some questions if you wouldn't mind explaining. Maybe I just didn't think this through as well as you, seeing as you've spent a decade or more on this idea while I've just read it now.

1. Who will provide the funds? Or does $10,000 suddenly appear out of thin air everytime someone is born?

2. How will it accrue compound interest? Compound interest isn't magic that simply happens. It's the result of the work being done with the funds. A dollar under the mattress won't turn to 2 no matter how long you wait. Where will you find the demand for such a huge amount of investment, and who will manage it?

3. Assuming that this happens, how much will 1 million even be worth? Will it be worth anything?

Those are the little problems. But I really don't think the basis for your assumptions are correct.

I'm no historian, but I believe that most wars are initiated by the rich and powerful, rather than the poor and weak. Imagine you're a really poor farmer in some rural place. You don't know whether you'll be able to put food on the table for your children tomorrow. Are you going to try to organize some sort of a revolt, and plan a war, or are you going to try to find a way to feed your children?

I don't think that giving so much money to people will reduce unrest. Rather, I think it'll increase unrest. If million at a point in the future, when a good amount of people have this fund is still a significant amount like it is now, how many people do you think will try to scam these people of their money?

Sure, you say they have to go pick it up themselves, but what happens after they pick it up? Or what if someone scams them by convincing them to take out a loan from this fund when they're 20? People who have been scammed are more likely to scam others. Perhaps they'll commit suicide or do something violent and let out his rage to the world. I can't imagine the world would be a peaceful place if this happened.

But let's assume that human beings are all good people and won't scam others. Even so, such a plan wouldn't be able to eliminate poverty. Just google lottery winner stories and you'll see just how many lottery winners go from tens of millions to nothing in just a few years. Simply giving someone 1 million doesn't guarantee that they'll have a good life. Chances are, a good number of people will lose it all in a short amount of time, even if no one scams them. And then they'll either blame the world, or be addicted to a luxurious lifestyle, either way creating more unrest to society.

You ask what is the price of peace, and I can only tell you that I don't think it's money. I can imagine this possibly working in a world of true abundance, where we have huge, eco-friendly vertical farms that are completely automated that are able to feed virtually any arbitrary number of people. Where we can build buildings thousands of meters tall, creating enough living space for an arbitrary number of people. Where if the Earth's resources is not enough, we can live on Mars, the Moon, or even outside of our solar system, and mine asteroids.

In short, only when we can create enough REAL value to match the money, will it succeed to any degree. I'm optimistic that this will happen in the future.

Bitcoin is antithetical to interest of any sort. I do appreciate the egalitarian spirit of your idea, Bytme, but you are adding more complexity to an already extremely over-engineered, over-stressed system. Good engineering is what you take away, not what you add.

And besides, capitalism as we know it won't survive long enough to implement.

I guess what my original intention was to create a mechanism to pull much of the unproductive wealth held by the top ten percent by using their own tools. At the time of these thoughts 8-10+ % annual return was not unrealistic if properly managed.

The million dollar amount was just me using the math in a simple way for people to understand an obviously obtuse attempt at an impossible task.

$10,000 X 1 million (infants) = 10 billion dollars required per year for 50 years.
60 million X .50 cents X 365 = $10 billion, 950million-this allows administration/education/development

After 50 years no "raised" funds are needed as the matured funds have a contract that $100,000 will be allocated to more infants by a factor of 10. Because of attrition (people not collecting) by the 100th year there will be more than enough through the $100,000 contract that is included in each completed contract with each individual, plus the uncollected funds there will always be enough to continue this until it's in everyone's best interest to stop it.

Some of the main things I haven't mentioned is that this is not intended to create a moral standard to humanity. There is no one solution to the many problems that exist in life. That being said there could be a covenant where one could be in default of this "trust fund" for repeated convictions of crime. This might be a deterrent in some small way.

Also, what the people will do with the money is spend it I expect. Whether on health, home, personal or charitable purposes. As far as I saw it it was simply a steady stream of money being spent. Rather than sitting in an ever growing pile for the top 10% as mentioned. No offense intended if you count yourself amongst that group. Spending is good for the economy. Or so I'm led to believe.

Again, I don't know that this can be done with the blockchain involved. Let alone BTC carrying the load. But anything's possible. I'm just putting it out there and see where this idea goes here. If the blockchain could make this work then I would have hopes that there would eventually be a true ledger of not just two certainties in life but three. Death, Taxes, and a chance at financial security. Not to mention the available funds for reparations to some of the damages we humans have done to the planet and all it's inhabitants over the past 100 years.

Hope this helps clarify what I'm trying to convey better. Sometimes it takes someone with no understanding of how the world works to cut through all the crap and just say do it. It may not be the perfect plan to create an educated global populace but at least it is a plan. Plans take planning and all plans start with an idea. A more peaceful world is certainly not a new idea.

   

Actually I believe the poverty has gotten MUCH better, I think theres half as much impoverished people as before, and the median incomes have moved much higher in the past 100 years across all countries, its definitely improving.

1 - there doesn't need to be. That is not how interest works. You receive interest because you lend someone money and allow them to use it for specific agreed upon purposes. If you simply have your bitcoin in your wallet (eg you control your private keys) then no one is able to do anything with your money while you are waiting to spend it.

There are already options to earn interest (including compound interest) on your bitcoin - one of which is lending on bitfinex - another of which is investing in the bankroll of casinos

2 - I am not sure what exactly you are asking. But I am pretty sure that is how the blockchain works today

putting aside 'interest' and just concentrating on world poverty

until you solve these 2 things:
1. greed of the trust management, meaning the guys that handle the dispersing of funds not to take huge chunks of cash out of the hoard/profit/interest
2. greed of merchants raising their prices because the country is suddenly more wealthy with lots more cash to hand.
.. you will always have a bunch of rich guys, vs a bunch of poor people, with a large gap in the middle

in short if you can find a way to ensure that all african births get an entitlement to X coin at set dates of their lives and in a way that no other person can fake identities or intercept the funds before the beneficiary gets a chance. and a way to ensure merchants dont inflate costs of goods/services to try grabbing the new fresh cash in the economy from the newly rich generation of people.

the only way i can see it happening is if a privkey/public key pair is generated directly by their DNA, which the new borns family only disclose the public key to the child birth registration system so that the system knows who to create the transaction to. whereby the dna is needed to sign a tx when its time to spend.

that idea aside. watch the movie "intime" where every human has a built in wallet inbedded in their arm that has been prefilled with 1 years worth of funds, only accessible on their 25th birthday, whereby most transactions are done hand-to-hand with not central system.

its a great idea to try helping the poor, but if most of the money gets syphoned off and centralized... then its an instant failure.

so i hope you have some great non interceptable methods to award funds to people

When I was a kid in the '70s I believed if I could live to 60 (and afford it) I could live to 100. If I lived to be 100 (and afford it) I could live to be 150. I would take this thinking and belief in the growth of knowledge all the way to immortality and the eventual choice to be part of the seeding of humanity on some exotic planet in some far galaxy.

Of course I understood that immortality did not equate to impervious to death. Shit happens.

My father used to tell me that my dream of ending poverty on in this world was possible. If you can get past the corruption, the greed and the fear of change. He also said that there might come a time a few hundred years down the road when some become bored with it all and tear it all down. Just because they can. Such is human nature.

None of what I'm saying means anything in the grand scheme of things because there is no grand scheme. We are all just doing what is within our hearts and minds. Some are less equal than others in one or the other. Or both.


Corruption and greed does have a leg up on the majority. Seems it's always been the case. Once it was simply a matter of survival. Now it's a matter of modus operandi. AKA CYOA!

My thoughts on creating an institution of fairness to the people and the planet is obviously flawed in many ways. As I've said before I don't have all the answers. Nor does any sane person expect me to.

Sure, life isn't fair. Still, nobody has yet to my knowledge willingly admitted to me that what the world needs is more greed and corruption. I was just wondering if the blockchain could facilitate the dream. So far the answer I've gotten is maybe.

Thanks for the redirect Cyrus. Seeing as there is no social engineering section then the economics forum is likely the best place for this to find it's own level in the primordial ooze of half baked ideas.

franky1, as stated above I do see the problem of greed. Compounded by corruption it is what has brought humanity to this stage and I expect lessening the interest paid to corruption will in time create some balance for the whole.

This "the only way i can see it happening is if a privkey/public key pair is generated directly by their DNA, which the new borns family only disclose the public key to the child birth registration system so that the system knows who to create the transaction to. whereby the dna is needed to sign a tx when its time to spend" is one way toward a less fearful and pessimistic world. imo

I saw the movie you referred once. Can't remember how it ended but I did take note of the guy who gave away his time, having lived over a century already, came to the belief that there is "enough for everyone". I was always taught such.

May you always have enough.     

I like what andreas says. He's already taking enough risk by having a significant amount of bitcoins, there's simply no need to take more risk.

Would you loan out your apple stock or google stock for a small percentage interest? It's not even sustainable, as there is a finite amount of apple stock/google stock/bitcoin.


Besides, bitcoin in itself acts like compound interest, since it's deflationary. In essense, both are basically "you end up with more purchasing power after time".

Compound interest  is a sham. In an inflationary economy, ur actually losing ur purchasing power even after compound interest

BTC doesn't need any interest . You just keep ur btc coz anyway it will grow vs other currency. The problem is the hoarding