Blockchains Instead of Beggars: Could Cryptocurrencies Unleash Universal Basic Income?

Cryptocurrencies are America’s latest capitalist playthings—from Bitcoin’s Christmas surprise of over $14K per coin, to the Bitcoin Cash fork of August 2017 and BitFury’s success in negotiating blockchain contracts in both Georgia and Dubai, cryptocurrencies, and the technology that powers them, went from being anarchists’ obscure hobby to the latest shiny object that the financial markets are drooling over. While cryptocurrencies are still a ways off from becoming actual currencies that can be used to exchange goods, they have proven to be valuable assets in today’s markets. Moreover, the blockchain technology that underpins said currencies has begun to gain momentum as an advanced application for the encryption and storage of data. Many see it as the natural evolution in the digital age. 

For those of you who don’t know what blockchain technology is read here, or if you’re interested in cryptocurrencies in general, read here. People much savvier than I can teach you the technical details. Today I want to discuss practical implementations.

In the past two years, cryptocurrencies have made a lot of young people, and already rich old people, very rich. Cryptocoins and blockchain applications are the latest innovation to encourage the American rags-to-riches mythos, and I don’t see their bubbles popping anytime soon. Yet is seems like all of this is creating just another set of 1% 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 cryptoclass, the blockchain was supposed to emancipate humanity.

This has me thinking...how could blockchain technology be used to create currencies that support a universal income? I’ve written before about universal basic income, from both a practical perspective and a feminist perspective. Most people argue there isn’t enough money out there to create a sustainable world where everyone is fed. I’ve long called bullshit on this. Technologically we can now feed the world, so what’s holding us back? The food can be farmed in labs and it can be distributed to the most remote locations on Earth. Why then, does much of it rot in holding areas? Or never even get planted, while children die of starvation in our streets? Even in America, child poverty is rising with 30.4 million children daily in our country using the National School Lunch Program in their schools.

To me, the growing poverty in the “Land of Opportunity” is a universal lack of love on every citizen’s part, not a money problem. However, if everyone’s convinced that there aren’t enough American dollars to go around so that we can guarantee housing, food and clothing to our fellow brothers and sisters, then perhaps it’s time to make more money, and not the kind you can hold in your wallet.

The way to create a new economy based on care and commonwealth may be to create a new currency with community as its only goal, rather than profit and greed, and what better way to do this than with a cryptocurrency? Why not build a crypto-token that is secure, hard to hack and trackable, whose purpose was to provide liquid resources to the most vulnerable members of society?

This last feature - traceability - is very important.  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. For fun, let’s call the new currency, LifeCoin, created not to get a bunch of miners and traders rich, but instead to be shared from person to person, growing as we all grow in wealth, a true peer-to-peer network both technically and socially. 

A currency whose aim is to provide a universal basic income would need to have the following properties:

1)      It would need to be easily distributed to all citizens in the network 18 and over. Thus, a wallet that accepted LifeCoin, identifiable by the currency platform would need to be created.

2)      It would need to be accepted by all businesses that provide shelter (banks, landlords, etc.), food, clothing and healthcare. Thus a networked payment system that accepted LifeCoin and linked up to user’s wallets would need to be created. It needs to be seamless and provide incentives to services providers for honoring the LifeCoins as currency, thus the traditional fee structures in place for money exchange would need adjustment.

3)      It would need the ability to be changed into other currencies at the owner’s discretion. Thus the LifeCoin would need to be accepted on a decent number of exchanges.

This is a minimum list of technological needs, but at its most basic, a currency needs to be able to flow throughout the society if it’s going to be a true universal basic income solution.

Essentially there are two ways the LifeCoin could be created, either by the government, or by us, the citizens in an act of goodwill.

How could a government create and issue LifeCoin responsibly? There are probably many answers to this, but I think LifeCoin could be implemented by local governments that are looking to use blockchain technologies to manage and secure their data. Governments collect more than taxes, they’ve long been keeping track of our data, such as births, deaths, marriages, land titles, county employee information, driver’s license information, school information, health information and even voting registration and ballots. All of this information needs to be managed, and many governments are starting to consider using blockchain technology to do just that. Take the country of Georgia, who has uploaded over 100,000 land titles to a blockchain network created by BitFury. They have decided that using blockchain smart contracts will help them prove land ownership as Russia slowly begins to occupy more and more of their land. Dubai has also decided to use the Ethereum architecture to manage its data and bring their country into the 21^st century.

Many other countries have taken notice. In Haiti, for example, after the earthquake in 2010, the first building to fall into ruin was the building that held all of their public records. In seconds, all the paperwork that documented who owned what land was gone. My own town of Santa Cruz, CA, is always under earthquake threat, could moving their local government data to a blockchain system help them in the long run? Of course it can.

Money will be saved by adopting these new technologies for data management. According to an article in August 2017, the government of Dubai expects to, “Reduce the cost of document processing by billions of dollars through eliminating manual processing of residencies, passport documentation and visas through a partnership with ConsenSys.”

Billions of dollars, eh? And what to do with those savings? Why not redistribute them back into the community as a universal basic income? This can be done by tokenizing the endeavor, and backing the initial release of the coins with the savings the governmental entity receives.

As governments begin to implement various blockchain schemes to manage their data it is the ideal moment for them to tokenize the blockchain ledger they’re creating and distribute those tokens to their citizens as a universal basic income.

Consider Santa Cruz. Recently named the fourth most expensive place to live in the nation, it is estimated that our cost of living is 81% higher than the national average and our housing costs are 208% higher than the national average. When I drive down the street near town, I see tents nestled in along the highway, back near the fences and hidden in tall grasses. At night, when you pass our city hall, the courtyard is filled with people in sleeping bags, trying to find a place to sleep. Beggars line our downtown mall. Truly if any town needed a universal basic income, it’s ours.

Perhaps UBI begins at home with our local city council opting to invest in building a blockchain ledger using Ethereum to manage all contracts regarding land in the county as well as all legal documentation and contracts stored in the courthouse. The project includes tokens that are backed by the city at first with the monies annually saved by efficiently managing and securing their data. These tokens are distributed evenly to every citizen over 18 on a monthly basis.

As time goes on, more data can be added to the ledger and with each savings by switching from the manual handling of the data to digital networks doing the job, that money is used to issue new coins to citizens. The basic income could start at one number, say $500/month with the intention of growing to a final amount that can sustain a human being within the county.

In addition, more tokens are created as incentives to encourage people to enter the system as miners to help maintain the ledger. This is the decentralization aspect, the data is stored across hundreds of servers rather than just one. Thus everyone gets a set amount, but those who mine create more coins that they can use to purchase items in the community, or trade on the exchange, thus increasing the value of the tokens. Tokens can also be given to businesses as a means of encouraging them to accept LifeCoin as payment for their goods and services. With time, the currency spreads throughout the city and county, and as a result is accepted at more and more locations. None of this is because we “took” money from somewhere else. Using blockchain technologies, money was freed up to invest in a new currency, one that exists for the sole purpose of providing a living to our citizens.

Now, this is a very basic sketch of the system, and one I’m not able to complete. I’m merely putting it out there as something to debate and discuss, with the hopes that minds much more crypto than mine can see that their work has this potential. And perhaps to get the political dialogue rolling. This has to start somewhere and we can’t wait for our federal government to help. I also realize that as with any monetary system, cryptocurrencies may not be able to address the potential inflation and deflation associated with a universal basic income. 

My good friend and fellow Medium writer, John Eden, put it perfectly:

"My view is that the real worry about crypto-powered UBI has nothing to do with the power of the blockchain from a tech POV.  The problem is that any economic system with a fixed or variable amount of tokens can and will experience inflation and deflation.  To me, this basic economic fact can't in any way to neutralized by blockchain.  The implication of this is that the token one designs for UBI must be created in partnership with some pretty thoughtful economists so that a method of adjusting the value of the token relative to the wider economy is built into the token infrastructure.  After all, you don't want to create LifeCoin only to see inflation ruin it's core purpose - i.e., giving the most vulnerable members of society the ability to live a decent life."

I'm not sure where we'd find those thoughtful economists. Can our local governments implement a token system to help the poor while keeping in mind the long term economic monetary policy goals? The blockchain might not save us from this issue, but the currency created can be set up with a new set of rules than our regular fiat, especially since it would be it's own new market, individualized at the local level. We've been manipulating the markets forever, is it any different for a township to create it's own currency to establish a standard of living?

We could also leave the government out of this and instead take responsibility as private citizens, creating a universal reward token ourselves. Private citizens can create a coin that is then given to those who need it. This work has already begun. GrantCoin was established in 2015 with the intent of providing a UBI to those who meet their criteria. However, this feels more like charitable handouts than a true UBI, for it’s still based on need, which requires judgement by a group of people who get to determine whether or not you really need it. Universal Basic Income is not only about providing the basics to all in a world of plenty, it’s also about freeing us from the judgments of others. We all receive a universal basic income, that’s what makes it universal, and we’re trusted to do what we should with it. Still, GrantCoin is a good start.

Another idea that caught my eye was the concept of gamifying cryptocurrencies as a means of deploying them. In an incredibly passionate plea to save cryptocurrencies from big business, author Daniel Jeffries writes, 

“By gamifying money distribution, we spread it far and wide across the playing field, as fast as possible, and guarantee that the system becomes viable. We bootstrap the system from banana republic to global powerhouse. That will bring powerful economic players into the system, who will then be incentivized to protect it and expand it.

If we move swiftly, we can unleash the true power of the blockchain to unlock the frozen reserves of human potential, rise from the ashes of our crumbling political systems and rocket into a whole new level of economic potential and development.”

He goes on to explain how by using a killer gaming app along with a universal reward token, one could possibly build a cryptocurrency that is completely decentralized with the possibility to not only fund life, but allow the movement to build into smart contracts and other aspects of civilization. Instead of the government initiating the move to the blockchain, private citizens do it for each other, via games so fun to play, we play them for a living. His article on Medium is a worthy read if this sort of idea floats your boat.

This may seem a bit pie in the sky, and on some level it is, but when thinking about the future of money we have the ability to write a whole new story, so why not base it upon joy and games?

Regardless, as financial firms explore the possibilities that platforms like Ethereum bring, it may benefit us to begin to probe our local governments into doing the same. However, instead of keeping the profits for themselves, they could the adventure to create new systems of money that promote life and health for all citizens.

Book Review: Abundance--A Must Read for Any Futurist

Authors Peter H. Diamandis and Steve Kotler have created just about the perfect handbook when it comes to envisioning a technically advanced, democratic and thriving society. Written in 2012, this book is still an important read for anyone who’s interested in a technical future where humanity finally rises above the mire it has been tethered to for millennia.

Much can be said about the book, but there are two aspects that put Abundance at the top of my recommended reading list. First, Diamandis starts out by addressing the most obvious elephant in the room when it comes to hindering progress: our Cognitive Biases. We tend to be negative creatures, programmed from birth to fear our world and each other. Scarcity is driven into our minds, from supply-side economics to original sin. The media focuses on bad news because that’s what the human mind responds to. While we claim to desire happiness and peace, most people simply don’t believe that they, or anyone else, deserve it.

Diamandis goes straight to the heart of the matter by addressing this flaw, and why it holds us back. The reason technology hasn’t lived up to its promise is because we’ve been thwarting progress with our negativity. In order to free technology and allow it to evolve, we too must free our own minds and evolve from our reptilian, amygdala driven patterns, to higher order thinking and use of the frontal lobes of our brains. This is not a simple task, but in the grand scheme of things, there’s nothing more important than for us to realize that life is actually much better than it’s ever been and that the future will serve us even more when we trust in the abundance of both the Earth and our capabilities.

Basically we need to rewire our brains. We’re still heavily relying on a hardware platform designed to keep us safe from wild animals, weather and other threats our ancient ancestors had to deal with. As Diamandis writes,

“…our early warning system evolved in an era of immediacy, when threats were of the tiger-in-the-bush variety. Things have changed. Many of today’s dangers are probabilistic—the economy might nose-dive, there could be a terrorist attack—and the amygdala can’t tell the difference. Worse, the system is also designed not to shut off until the potential danger has vanished completely, but probabilistic dangers never vanish completely.”

Physically our brains have grown in size, particularly in the frontal lobe, since the days of the caveman. We have an entire neurology we can embrace, and with it, a totally different perspective of life. Essentially we’ve evolved the hardware to be capable of seeing the systems before us and know that scarcity is something we can overcome, if we chose to believe in it. There’s really no other way.

As long as we remain stuck in the endless negative threat loop, our technology will be held hostage by fearful minds.

Diamandis goes on to point out,

“For abundance, all this carries a triple penalty. First, it’s hard to be optimistic, because the brain’s filtering architecture is pessimistic by design. Second, good news is drowned out, because it’s in the media’s best interest to overemphasize the bad. Third, scientists have discovered an even bigger cost: it’s not just that these survival instincts make us believe that the hold we’re in is too big to climb out of, but they also limit our desire to climb out of that hole.”

What follows after this realization is an attempt by the authors to show your logical brain, that part of you that thinks beyond threat, why you can believe in a better future, using both science and personal stories to prove their point. It’s a brilliant exercise in cheerleading for their cause: an abundant future for all Earth’s citizens.

The second reason I recommend this book is because of its treatment of the BOP, or the over four billion people on our planet who live at the Bottom of The Pyramid, on less than $2 a day. Imagine it, four billion of us live in extreme poverty. Many of us spin our wheels trying to figure out how to get our resources to this group. This book actually gives us a blueprint that doesn’t merely suggest we share our resources with these folks, rather that we make the resources of the Earth and technology available to them in a variety of ways. From Technophilanthropists to the effects of putting cheap Smartphones in the pockets of villagers in West Africa, the possibilities to liberate half the world from poverty are literally in the palm of our hands.

For example, we in the west often look at our Smartphones as luxuries, but to someone in the BOP, it’s a way to share goods with others, discover information about clean water sources, and inform the world when violence erupts in the middle of the night. As they come online, they become a part of the global economy, which changes everything.

Not enough is written about the BOP as a group of consumers. Recipients of charity, yes. But as the old saying goes, “You can give a man a fish, but better to teach him how to fish,” the same holds true for the BOP and technology. This is the market place where solar paneled eco-friendly housing and inexpensive water filtration systems will come to be. Food distribution and agriculture as we know it will dramatically change when we invest in the BOP, which in turn will teach us how to manage the world when 9 billion of us roam the streets.

Abundance—The Future is Better Than You Think was a great read, and belongs on home bookshelves everywhere. Next on my reading list, BOLD, the authors how-to-guide follow up. If anyone can inspire us to make a difference, it’s Peter Diamandis and Steven Kotler. 

How To Survive the Robot Apocalypse

It’s in the air.

It’s in the news.

Our struggling economy. Our struggling democracy. The income gap. Technology and artificial intelligence. At first glance, these things might not seem connected, but upon closer inspection, I find they’re all part of one impulse, and together they create the web of humanity—and our future.

Many would have you believe we’re near the end of civilization as we know it. Their case is quite compelling. Even though our economy is showing signs of recovery, most employment improvements are in low-wage jobs—the very jobs our technology seeks to replace. We might be at a 5.8% national unemployment rate as of October of 2014, yet according to Paul Bucheit in his recent article for Common Dreams, “Nine out of ten of the fastest-growing occupations are considered low-wage, generally not requiring a college degree, including food service, health care, housekeeping, and retail sales.”

Not coincidentally, the job gains that are currently making our employment numbers look good, even though they’re low paying, were found on another list recently—the ones most likely to be replaced with robots in the next twenty years.

The coming “Robot Apocalypse” is such a big deal right now that Standford University has announced a “…century-long study of the effects of artificial intelligence on society, including on the economy, war and crime.”

There are two sides to every coin. One side would suggest that a world of extreme and growing wealth, paired with the technology to free up humans from low-wage jobs, will usher in the long awaited period of “Heaven on Earth.” Others suggest that since those with the wealth don’t want to share, the projected 50% unemployment rate will lead to extreme poverty, uprisings and the deterioration of humanity.

What now lies before us is a choice, which side of the coin do we wish to nourish? The future where technology finally lives up to its promise, or the future where most of humanity lives in dire straights and the elite have to take to the skies, as they do in the movie Elysium? It is a serious choice, and one from which we can't hide.

Here’s the catch, we have to make this choice together. Yet it seems that we're polarized as a people. How in the world can we move forward?

There are many ills in society, but in my observation they all boil down to one—xenophobia.

It’s our fear of others that drives us to let the poor suffer, because they didn’t work as hard as we did. It’s our fear of others that encourages the wealthy to horde their gifts, because no one else deserves them. It’s our fear of others that encourages war, or the withholding of life saving technologies from those who need them, simply because they’re uninsured. It's our fear of others that creates a national budget where 60% of resources are dedicated to the military industrial complex, and a mere 2% is invested in science and technology.

The truth is, until we can look one another in the eyes and see nothing but the dignity of our humanity, the future can and does look dire. For unless we can find compassion and a desire for all of us to thrive on this planet, the replacement of humans with robots in the economy can and will lead to extreme poverty. That is a bleak world for most.

Yet there are things you can do as an individual to choose to thrive not just survive, the Robot Apocalypse, turning the event into the next great leap forward for humanity.

1.     Learn to code. I’ve said this many times before and I’ll say it again: LEARN TO CODE. This is the language of machines, technology and power. Being a mere user makes you vulnerable. At a minimum, schools should be teaching all 7/8^th graders basic coding skills and high schoolers should be required to pass a programming class for graduation.

2.     Invest in your creativity. Humans are inventors. Yes, a truly learning machine will be able to create, but we’re unique in the way we see pictures in our minds. It's been said the Nikola Tesla could see his inventions in his imagination and even test them, making sure they worked, before committing to build them in the material world. We are storytellers, dancers, innovators, entertainers...Robots can of course assist us, but we’re the ones who see the world in bigger pictures, stories and humor. I’m not sure Watson could ever be as funny as George Carlin.

3.     Invest in your judgment, aka your thinking skills. Our minds are not merely if-then-else statements, but more like recursive loops calling upon themselves as the states around us change. In other words, we’re not nodes on the network, we are the network. Humans can make decisions by filling in the blanks. No one has to program us, and we can change our minds given new circumstances and situations. The human learning system is truly complex and dynamic. Nourish this by stretching beyond your comfort zone. Study a new language, or an entire field, to keep things fresh. Shake up your life on a regular basis to expand your ability to process information.

4.     Read “The More Beautiful World Our Hearts Know is Possible,” by Charles Eisenstein. Sure, you could read books on the singularity, AI and technology by leading experts, but as long as you still think the future is bleak, grim and full of starving, jobless people, that's exactly what we'll get. We need to open our own hearts and minds to a new possibility, a new story of how humans work, love and live on the Earth. Charles’ book is a fantastic place to start. Better yet, taking the time to read this book is also an investment in your creativity and judgment, making you more competitive in the robot workplace.

5.     Get to know yourself. What do you hate? Whom do you mistrust? What parts of humanity are beneath you? What belief systems do you mock? What do you call evil? We often spend time thinking about what we like and saying that defines us, but in reality it’s the things that make us want to run away that really make the difference. The things we disdain color our ability to co-create. They block us from our potential. Robots and artificial intelligences won’t have this issue. Unless we give them personalities, theirs will be a clean logic. Nothing is loved and nothing is hated. Hate is what makes us act out, hurt and horde. If we want to thrive we’ll need to clean up our emotional state, so that we can join with technology to shape a cleaner, more beautiful world, rather than be dominated by it—and abused in entirely new ways.

The goal here is to become resilient to a changing marketplace that no one entirely understands at this point. But we’ve been here before. In the mid 1800’s no one could truly understand what the invention of the factory would do to shape our world. Entirely new skills and economies were created. It’s about to happen again. Rather than fall into ruin, we can be prepared to take part in the story, in whatever way possible, even if the plot line isn’t yet clear. What is clear is that similar to Charles Dickens’ time, the chance for many to suffer during this change is high. Unlike Charles Dickens’ time, we have the ability to join together and communicate our goals and dreams as one. Let’s use our technology to inspire one another to evolve past our fear and hate, and be worthy of the world we’re building.