Would a crypto-based universal basic income actually work?

[eternalgloom]

Lately I've been very interested in looking at all the different cryptocurrencies that have the goal of providing people with a universal basic income.
I currently have a whopping 24 projects listed in my Overview of Universal Basic Income Crypto Projects thread, so I think I've seen pretty much every basic income related cryptocurrency out there. 

One thing I've noticed while doing research on all of these projects, is that almost none of them seem to have realistic means of actually giving their cryptocurrency any value.

I would argue that Manna is one of the projects that currently the most far ahead, but I don't really see how something like this can succeed without ongoing donations/crowdfunding/philanthropic investments/...

From what would these basic income cryptocurrencies gain value? Why would people buy these coins from exchanges, if you take out any purchases for philanthropic reasons?

Some of these basic income coins are hoping to build some sort of internal marketplace (for goods and services) that would create demand for the currency, but I don't see that working on a large scale.
Swiftdemand is one coin that goes for an approach like that, while Manna seems to focus more on getting funding from the public and NGO's.

If you're looking at the price charts of Manna for example, you can see that its value has been steadily dropping to a measly $0.000786 USD or 0.00000012 BTC.


Source: https://coinmarketcap.com/currencies/manna/

I just don't immediately see how any of these project could become 'self-sufficient'. I would think that they would always need some form of institutional funding to keep their value up, since almost everybody would just be selling the basic income they would receive from them.

I'd like to hear your input on this.

[1715303734]

1715303734

[theymos]

No, doing UBI via cryptocurrency is just a bad idea. To start with, UBI fundamentally needs to be centralized because a decentralized system can't determine who the unique humans are. You need to either rely on existing centralized government databases (which may also be flawed/corrupted...) or you need your own centralized testing personnel/devices.

Second, a decentralized cryptocurrency can only make money for "the system" through very blunt/stupid methods such as inflation and transaction fees, and this doesn't scale much. People won't use a cryptocurrency that's going to inflate a lot: that'd be stupid, and people aren't that stupid. That's why you don't usually see governments try to fund themselves entirely through inflation, and when they do, it quickly leads to hyperinflation from people increasingly+exponentially refusing to use that unreliable money. If you had a cryptocurrency that had significant stand-alone merit prompting people to use it (eg. BTC, ETH, XMR when they were first created, not new clones), then maybe you could get away with taking a 0.1-1.0% inflation tax and doing something with it, but you're not going to achieve UBI with that. UBI requires some other form of taxation, probably one requiring violence via a state. (Voluntary taxation communities almost always fail, look at various attempted communes such as eg. Kibbutzim in Israel.)

Looking at Manna as an example, their whole UBI aspect relies on a centralized nonprofit; what then is even the point of the cryptocurrency aspect? What value does it add on top of just setting up some BTC-accepting charity that would send donated funds to all verified individuals equally?

IMO a better idea would be to compete with Patreon: subsidize non-traditional work so that people can escape the 9-to-5 nonsense. But even then, I suspect that creating a new cryptocurrency would be counter-productive; you don't need to shoe-horn a new coin into every little thing.

[eternalgloom]

No, doing UBI via cryptocurrency is just a bad idea. To start with, UBI fundamentally needs to be centralized because a decentralized system can't determine who the unique humans are. You need to either rely on existing centralized government databases (which may also be flawed/corrupted...) or you need your own centralized testing personnel/devices.

What about something like uPort? I'm not sure if the project is already operational and I'm also not quite sure if that could actually be used to tie you to a real-world identity.
https://medium.com/uport/the-basics-of-decentralized-identity-d1ff01f15df1

Second, a decentralized cryptocurrency can only make money for "the system" through very blunt/stupid methods such as inflation and transaction fees, and this doesn't scale much. People won't use a cryptocurrency that's going to inflate a lot: that'd be stupid, and people aren't that stupid.

I hadn't even mentioned crypto UBI 'generating' money through inflation and transaction fees. Seemed pretty obvious that something like that wouldn't work, though then the question arises why there's a need for a crypto-based UBI in the first place, indeed. 

The main point of my post was that the majority of these UBI crypto projects are almost fully reliant on either subsidization or grandiose plans to create a cryptocurrencies with significant standalone merit (like you mentioned). I would still like to hear some counterarguments from other people, but I'm afraid that there might not be many counterarguments to offer.

IMO a better idea would be to compete with Patreon: subsidize non-traditional work so that people can escape the 9-to-5 nonsense. But even then, I suspect that creating a new cryptocurrency would be counter-productive; you don't need to shoe-horn a new coin into every little thing.

Something like that already kinda exists on the Steem blockchain, but only for a specific subset of non-traditional work. There you have the Utopian Project, which allows contributors to Open-Source projects to earn rewards for their voluntary work. I reckon that it would be possible to fork the project, to also apply to other sorts of work. Everything is manually moderated, so there's definitely the possibility of bias towards certain contributions/contributors.

[sister1001]

Looking at Manna as an example, their whole UBI aspect relies on a centralized nonprofit; what then is even the point of the cryptocurrency aspect? What value does it add on top of just setting up some BTC-accepting charity that would send donated funds to all verified individuals equally?

Some aspects of crypto could be interesting to set up the methods and procedures of an Universal Income system. However, I think some coins are using the term as a buzz word and their proposal is closer to a passive income investment, no different from the many existing ones.

Universal Basic Income, as I see it, is the compromise of a society to ensure that all its member have some income, but it has to be independent of any investment, that is, must equalise the members of the society regardless of their economic means for investment. The use of crypto or blockchain technology in this case would be anecdotical.

In a way, Universal Health services, universal pensions and free education are a form of UBI, paid in species. It is noteworthy that societies that actually accept those items as a core function of the political system are however reluctant or plain adverse to providing the same benefit in cash.... would anyone dare to mention crypto in a political proposal?

[jeffthebaker]

UNICEF's world food program operates a quasi-UBI system with a private Ethereum fork for refugee camp. They link crypro accounts to each refugee's Iris, and are given money each week or month to use at their camp grocery store. They simple scan their eye to check out.

It's not crypto in the traditional sense as it's a specific application of a singular entity but it fits the bill. For a decentralized UBI system, I do think this would be possible but under current initiatives will be unsuccessful.

The crypro-centric UBI I envision is a Decentralized Autonomous Organization with a legitimate mechanism for creating profit where a certain % of profits are redistributed to every participant in the DAO. There of course would need to be some metrics of human participation to prove that botters aren't dominating the reward pool. I'm uncertain how they could make that work. RaiBlocks kept good authenticity of their faucet with the help of an audio catpcha.

IMO a better idea would be to compete with Patreon: subsidize non-traditional work so that people can escape the 9-to-5 nonsense. But even then, I suspect that creating a new cryptocurrency would be counter-productive; you don't need to shoe-horn a new coin into every little thing.

Crypto would be notoriously bad for a Patreon alternative because you can't offer recurring payments in the same manner you can with credit cards.