Creating a guaranteed minimum income through crypto-coins

[TCraver]

It seems your original suggestion is to disperse a minimum wage to everybody from voluntary gifts.
This is the same as voluntary supporting an organization that gives to the poor. Not exactly the same, as everybody would not get the minimum. It could be enough.

I just don't see how creating an altcoin for it solves anything.

Well, no, that wasn't my suggestion, though there might be something to the idea of voluntary gifts of Mincoin.

Perhaps my comment on people acting voluntarily on behalf of Mincoin created that impression; but that was really just to suggest that the idea of creating a minimum income for all, without government compulsion, might be popular enough to garner voluntary actions to help promote the spread of Mincoin as a viable currency.

Think of it this way:  a monetary system, by its usefulness, creates a systemic value above and beyond the sum of values of the units of currency that make it up.  That's why governments have been able to inflate money supplies, without the users immediately deciding to stop using the currency being inflated - money as a system is just too valuable to give up except under the most extreme exploitation.   It is that value that Mincoin would tap into, to provide a guaranteed minimum income. 

It is my expectation that the market would quickly render the value of a mincoin to a relatively low and fairly stable value, through the mechanism of a high currency velocity due to its fast decay rate.  Anyone relying solely on free mincoin for a living would still be quite poor - but hopefully no longer desperately poor.

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[LAMarcellus]

I can help you with the "proof on concept" stage.
Here's how we do it.
First you send me bitcoins.  1PBKvxmHqKJbEBtGGBWGfgfAGWL8j3ZL7d
 $2 worth, daily, should be a sufficient "minimal" amount?
Then I will spend it on basic necessities for myself. Bread, toothpaste, bar of soap, a razor, etc.

You have the money. I don't. So lets see you put your idea into action; Provide me with a minimum income.
Until we get that first step out of the way.... this is a total non-starter.

However once we prove this idea out for a year, then we can approach investors and the crypto-currency community and say "look what we just did, lets allo support this endeavor".

Get your ball rolling man. Send me mBTC daily.

[TCraver]

I think I've got an approach to preventing fraud.  It is not simple but perhaps others can see ways to improve on that. 
Details of some mechanisms are still TBD.

Here's a summary of the modified proposal, starting with added/changed elements, then the original elements that are retained:

ADDED/CHANGED:

While coins would be dispensed continuously, they would not be "free", but rather considered payment for the receiver agreeing to accomplish certain simple tasks generated and assigned by the altcoin network.  Some tasks would help verify true identities associated with the altcoin generation accounts (e.g. visiting someone nearby who has set up a new ID'd account, random checking older accounts, etc).  Other tasks would help maintain the altcoin network (e.g. block chain validation, distributed/redundant storage of identity evidence, random selection of contributors for task assignments, automated task generation, etc).   Some tasks would be "in person", others automated by dedicating processing/storage to the network, some might be in person online. 

The frequency of "in person" task assignments would be light - once an identity has been verified for an account, it would only occasionally be spot checked.   People could sign up for different tasks, depending on their situation.  Unpopular tasks might yield a coin payout bonus. 

Failing to accept or attempt to fulfill tasks, as well as committing fraud, would be grounds for barring the identified abuser from receiving altcoin distributions for some period of time - by rejecting coin creation transactions.


ORIGINAL:

A new altcoin.  Any person could voluntarily register to tie their true identity to a verified account, in order to be allowed to generate a fixed amount of coins into that account on a regular basis (likely weekly).  If desired, coins could be transferred to 'anonymous' wallets/accounts, for enhanced privacy.   

Coins would be timestamped at creation, and their value would decay logarithmically at a fixed rate, to prevent inflation due to accumulation of coins.  The value of a coin at any time could be calculated based on its age and value at the time it was stamped.  Any time a coin is transferred (or broken into change), its decayed value would be calculated and a new coin or coins generated with the remaining value and a new time stamp.  Validity of coin transactions (including creation at the approved rate) would be verified in a manner similar to Bitcoin, though at far lower computational/energy cost. 

Anyone agreeing to accept the coin distribution would also be agreeing to accept the coins in payment for goods or services at a reasonable market-determined exchange rate (there might initially be an upper limit on this requirement, but once the altcoin is well established this should cease to be a concern).

[TCraver]

BTW - a word of thanks to odolvlobo for his two word inspirational contribution ("A Job?"), which helped me come up with this approach.    

EDIT: ACK!  Sorry CR1776 for incorrectly attributing that to odolvlobo!

[DaveHamill]

Hi forgive my newness, I signed up just for this conversation. I have an idea for modeling a block chain solution after a guaranteed income-style proposal that previously involved traditional banking. I am a founding member of the Coalition for Capital Homesteading capitalhomestead.org which at this time supports a plan that proponents of minimum incomes seem to like. I have been studying monetary reform for years and I along the way I discovered something called Binary Economics which I believe has the best principles for supporting all of humanity, expanding freedom and allowing maximum growth without inflation. It is not perfect but I feel strongly that something like it really needs to be tried, even of only in one state or region.

The main concept is that loaning money into existence is not necessarily a bad thing. It is just being done the wrong way everywhere. Fractional bank money is backed by government debt and used too often for usurious consumer debt and margin speculation. And of course it is done in a way to benefit the banks, their favored customers, and their lapdog politicians that enable them. You know that part. The concept that I have started focusing on is how productive credit is good, and how it can be really good if it empowers all citizens. The proposed Capital Homestead Act would allow every child, woman and man to open a retirement account and receive credit of several thousand per year (actually a formula based on new growth in GDP divided by number of citizens) to invest in the dividend-paying corp of their choice. The dividends would be spendable each year before retirement. There are many in-depth explanations at cesj.org and some (admittedly not-slick) videos on Youtube. I even gave a speech at the Fed in 2012 and at the Lincoln Memorial last year which you may find interesting; only about ten minutes each. Search my name and Capital Homesteading on Youtube.

When I heard Daniel Larimer of BitShares on LTB I started thinking that perhaps the blockchain concept offers hope for a Capital Homesteading-type plan to exist in the coming "distributed autonomy" world. I also had some ideas along the lines of what you were discussing above about making sure each individual person participates and that others can't fraudulently get multiple identities to abuse the network. I'm thinking smartphone app with biometric combo such as fingerprint, eye scan and voice recognition. Hey, they say a decent percentage of people in Africa are getting phones. Easier than PCs when it comes to meeting the objective of getting every human online. My ideas aren't bulletproof but I think that the bitcoin/blockchain community could work on this problem if something like what we are discussing emerges.

Distributed autonomy and modeling systems based on consensus of what is just for humanity is looking like the answer to so much. I am trying to convince some of the older economists in my movement to consider the possibilities. I and my friends often quote Bucky Fuller "You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” I am starting to think this forum can do just that. I hope that all who are in any position to influence what kind of money system the world has will please consider economic justice for all. We the tech-enabled should not want to become the plutocrats of tomorrow. And keep in mind that whatever business you want to be in, it will be easier for it to succeed if there are plenty of customers with money out there.

Thanks for reading and for any constructive conversation. Be patient for replies I don't get online much due to work.

[TCraver]

... I am a founding member of the Coalition for Capital Homesteading capitalhomestead.org which at this time supports a plan that proponents of minimum incomes seem to like.

Dave: I'll take a look at your link.

The main concept is that loaning money into existence is not necessarily a bad thing.

One way that I've conceived of the altcoin proposed above, is as every individual loaning coins into existence for themself.
It's just that everyone defaults on every loan, and everyone who transacts in the altcoin pays a tiny 'fee' to cover everyone's defaults.

[cr1776]

BTW - a word of thanks to odolvlobo for his two word inspirational contribution ("A Job?"), which helped me come up with this approach.    

He was actually quoting me.  ;-)

I think your revision is improving things btw, imo.  ;-)

[hostmaster]

its too hard to believe for me.

[TCraver]

He was actually quoting me.  ;-)

I think your revision is improving things btw, imo.  ;-)

Ooops - My apologies.  I've added an edit to correct that.   

And again, thanks!

[TCraver]

its too hard to believe for me.

That's understandable - I had much the same reaction when I first heard of Bitcoin, so I ignored it for a long time.   

But if you could elaborate on WHAT you find hard to believe, that would be helpful.

The part I'm still having trouble believing in is the "network assigned tasks" system. 

But if we could get that to work, it might be a model for a completely new way of organizing ourselves to get things done, far beyond creating a medium of exchange.

[frank754]

Sounds like a great idea, a way for low-income folks to supplement their income. In my case, for example, I earn less than $900 a month, am 59 and only have 20 hours a week of work. Property tax and car insurance are the biggest burdens, and I usually have to buy food with a credit card (we make a bit too much for food stamps). Just an extra $100-200 a month would make a world of difference. I've known about Bitcoins since its inception, but only got involved the past couple months in mining. Seeing how it was supposed to go up and up, I invested (on credit) $900 in an one ASIC rig, and another $2000 for GPU scrypt mining with building 2 new rigs and upgrading another. All this hoping that after the ROI it would give me about 50% more income a month to pay bills. I've only mined about $600 so far in 7 weeks due to the price downturn, but seems like a good investment given time.
As for your idea, a new coin based on a needy persons identity on Facebook or elsewhere who could sign up as a verified identity could work, then a pool set up with passwords given out only to people who maintain a good standing with the group and demonstrate need. Perhaps some type of CPU coin, where it wouldn't be so much the hashing power but "proof of presence" on the network to say that they are working/needing it, and then a fixed reward for the presence there alone. Just as an experiment, I've been mining memorycoins on 3 CPUS for the past week, and they only net me one every 3 days which are only worth a penny, but that doesn't take away from my mining other altcoins with my GPU's (which I would never give up). This sort of thing would give "presence" on the pool, and then the pool could distribute the rewards to members who are active both there and on Facebook. For some people just $2-3 a day would be a big help. This would also be an incentive to get a lot of folks interested in altcoins, many who have never heard of them before and be a boost to the "brand", including to Bitcoin. The coin would need to be stable, and each person should be able to  earn that. Then as you say, too, someone could earn more for getting new people involved and having them join and download wallets, among other things.

[TCraver]

Will this  'free' decaying coin income really help if the economy goes to extreme unemployment, e.g. due to automation of jobs?

A couple of assumptions:
- a future when 50% of families have no employed person with income. (vs. ~20% now, including retirees)
- a coin decay rate of 5% a week, encouraging very rapid turn-over - all spent within a week on average.
- bad money driving out good, dollars nearly cease circulating, while the altcoin is used whenever possible.
- A coin payment rate of 1 per week (value TBD).

Assume pretty much everyone accepts the coin distribution.

If the coins had a fixed value, they'd be circulated 52x a year, and the summed value received over that year would be 52 coins.
But their value decays, so let's consider the equivalent in terms of "new" altcoins.
Over the life of 1 coin being circulated, at 5% decay per transaction (i.e. per week), the summed value to all receivers of that coin is equivalent to about 20 fresh full value coins.

In any given week everyone receives a coin.  But after that, all the value of the coins go into the hands of the employed.
Over time, this means that each week a poor person will get 1 new coin, while the upper half receive the value of 21 new coins.

Assume a family of 4 with at least one employed person has on average an income equivalent to $42K in today's dollars.
Then the family of 4 with no employed persons would be getting $2000 worth of coins. 
At 52 coins/person per year, the family of 4 would get 208 coins, each worth ~ $9.60.

If the decay rate were increased to 10% / week, the upper half would receive about 11x as much as the unemployed half.
That would give the unemployed family of four about $3800 worth a year.

Also, note that the coin probably can't start with more than 1% to 2% per week decay rate, in order to be accepted.

[Impaler]

I tend to prefer the universal availability of public goods FIRST, if we have universal roads, sanitation, education, disaster preparedness and prevention, public parks, health care and we still felt like performing wealth redistribution THEN I might support universal basic income.

Public goods should always be preferred first because they do not carry the double-dip problem that is so obvious with giving out money.  Pretending to be two different people doesn't let you double your use of roads, hospitals and parks.  Likewise their is no way to be more or less protected then your neighbor when a dike holds back a flood, or the Tornado alarms go off.  Some would argue that markets can better provide all the above benefits so an income would be as good as all thouse things PLUSS 'freedom', but history shows that the profit driven market is in fact incapable providing these things efficiently because the consumer is without bargaining power when they are in need.

Now IF we had a robust system of public goods AND the solved the double-dip problem and the choice is between a universal income and a system of poverty-only subsidies then I'm far more favorable to a universal income.  For one it eliminates the need to verify income levels, you only need to verify identity which is vastly simpler, in fact that is how we provide a retirement benefit to virtually every person in Western-civilization past the age of 65, a basic income would be even simpler cause we wouldn't even care about age.  But beyond that their is an even better reason to make it universal, it eliminates the indignity and stigma around any means-tested benefit and that has benefits for the recipient and social cohesion.

But their is one final point, a universal basic income is not something that can be done at anything less then HUGE costs, some hand-waving crypto-currency solution can't do it, your going to need an increase in taxation in the range of ~15% of GDP.  Given that I wouldn't entertain basic-income until a European-level welfare state is being provided which is around 30-50% of GDP were talking about a level of socialism that might make Sweden squeamish.

[TCraver]

@Impaler:

I agree with much of what you have to say regarding "public" goods.   Existing approaches, including systems of public goods, have raised about half the world's population to 'tolerable' levels over the past few centuries, and recent rates of improvement seem to indicate that we might get most of the world above abject poverty sometime this century.

However, two questions lying behind this discussion, are:
"Could we raise the second half of humanity out of poverty faster?"
    and
"Might coming technologies eliminate the potential to raise the second half of humanity out of poverty? "

It seems like the experience of the US out-sourcing labor overseas might mirror the effects of labor being automated, if we do nothing different - and it appears that the impact was to flat-line improvement for the majority while driving more wealth to the wealthy. 

Yes, if we could implement them, there are more conventional solutions - but it appears that for about 4 decades those solutions have been thwarted in the US. 

I am hoping that the system being described here might provide an 'end-run' around government provided solutions, which seem to be blocked.

Thinking a bit more about my own previous post, I was making one mistake - I was focusing on the "poor" of developed nations, where a mere $2000 per year per family of added income would be a modest (though welcome) improvement.   But in the poorest nations, that would be a huge improvement.  Even at a 2%/week decay rate, a family of four might get "merely" $800/year more effective income - still a relatively huge boost for the poorest.

IF we could make it work.

[DaveHamill]

I would like to understand "decay rate" better. I read that some are in favor of it because it would discourage hoarding, and therefore reduce wealth disparity.

I would also like to debate anyone who thinks there is a better money system than my previous proposal about a Capital Homesteading system using digital currencies. Loaning money into existence for feasible productive projects allows for unlimited growth without inflation, and I believe without decay rate also. I am against interest, especially compounding interest. But if the productive credit is allotted equally to every human, and they invest in dividend-paying companies, everyone will receive dividend income to replace technological unemployment and a capital growth nest egg for retirement. This creates free(er) markets, eliminates redistribution, taxation, and of course reduces wealth disparity. And if the decisions about what entities get new capital come from the largest possible number of people, companies will have to treat employees fairly and respect the environment. Otherwise people will not let them use their productive credit allotment.

This community may be creating the new money system of the world. I know some consider this to be a great opportunity to fix many of humanity's problems. I do, and I hope you will.

[TCraver]

@DaveHamill:

Decay rate, at least in this context, means that coins are time stamped when created, and at any later moment their value relative to a new coin can be calculated using a decay rate equation.  

For example, if the coins were timestamped only to 1 week resolution, the week after one was created, it might be worth 0.98 * new-coin-value.  In the second week, it would be worth 0.98 *0.98 * NCV, or about 0.96NCV.  After about a year - 52 weeks - without being spent, that coin would be worth 0.98^52 NCV, or about 0.35NCV.  A coin that goes unspent would theoretically NEVER decay away to zero - though the value would become trivial after a few years.

No matter when you acquire the coin, whatever amount of value you've obtained will decay at the same rate, as if it were newly created.  (In actuality, any time a transaction is done, the sum transferred (and any change from old coins) would be merged into a single lump and get a new time stamp.  Also, the decay equation used would be a "continuous decay" equation.)

The point of decay here isn't to prevent hoarding, but rather to allow every individual to create new coins at a fixed rate (per person) without the value of a new coin falling due to inflation.  

[DaveHamill]

Thank you TCraver for that explanation. I can see how that would have some merit. I lean toward having no intentional increase or decrease in value, though. But if that scenario were to materialize and every person created an equal share of coins, this could be another place where the smartphone ap that uses biometrics would work identifying separate individual participants.

[brush242]

What your saying is along the lines of: lets end poverty by simply giving everyone on earth who is poor One Million Dollars!

This, basically, sums up why this and similar ideas are stillborn (and always will be), even with all the machinations being suggested here.

The reason is very simple, whether you give everybody $1mm, or mandate the minimum wage at $500/hr, or add a bunch of zeros before the decimal point, or any other way of handing it out, in essence a combination of two things will always happen. 1) You devalue money (call it hyperinflation if you will), and 2) demand skyrockets for everything. Instantly.

What that means is that in a matter of days, prices for goods and services will explode by approximately the same order of magnitude of the amount you skew the system. In other words, in no time flat, the price for a gallon of milk (hovering at say $4.00, today) will hover around $40,000. Which means that the net purchasing power of the poor hasn't really changed at all. This will happen for every single good and service at the same time.

THAT is the fundamental flaw with all of these schemes. Since supply and demand define equilibrium, and since all prices always hover around equilibrium (except when skewed by gov't force (law, regulation, import duties, et cetera) which never increases supply) no one is any better off than they were.

Keep this in mind: if you are going to have to force me to participate in your ideas, that means they suck. Badly. There is a ~reason~ that the pillboxes in East Germany were pointed inward.

[brush242]

You don't have to worry about biometrics, or ID, or any of those things because these ideas cannot, and never have, worked. They can't.

[Bees Brothers]

(It's too awkward to keep calling this 'the altcoin'.  I'm going to call it Mincoin until someone comes up with a better name.  Refers to both 'minting your own coins" and "minimum income".)

Another problem you face is that you will need to come up with a different name.  Mincoin (MNC) is already in existence for some time now.

https://mincoin.io/

https://mcxnow.com/exchange/MNC