I’ve been a fan of the Circles universal basic income project since hearing Ashoka Finley discuss it at ConsenSys 2018 earlier this year.
Headed by developer Ed Murphy and blockchain entrepreneur Martin Köppelmann, Circles is an experimental model of universal basic income that generates a personal cryptocurrency for each person to use within a social graph of trust. Smart contracts are generated for users as they join the Circles platform and a personal cryptocurrency is created on their behalf. Personal coins are minted at a rate of one per minute once a person joins Circles.
Features include limits of trust, defense against fake accounts, and the concept of “validators” which allow users to trust other users based solely on being trusted by a common blockchain organization.
When using cryptocurrency as a catalyst for universal basic income, an area of concern is a creating a viable marketplace for this cryptocurrency to be used and exchanged. In Circles case, networks created by validators allow a natural marketplace to take shape but still come across a clear hurdle in crypto adoption specifically for users interacting with traditional businesses.
If there is a marketplace for someone to use their crypto to purchase goods and services, free money or not, you’re going to need an easy and accessible off-ramp for those businesses that still need fiat currency to pay bills. An alternative would be putting a cap on how much personal cryptocurrency you would accept a month based on the number of goods and services within that network you could purchase yourself. As the network expands, you could increase your cap.
A more forward-thinking option would be to create a payment gateway within the Circles platform that converts personal cryptocurrency to rent and utility payments for landlords and bill collectors. Companies like ManageGo and Living Room Of Satoshi have already begun implementing this in the U.S. and Australia.
Using a cryptocurrency based universal basic income may be hard to visualize. Open-source and charitable giving platform Giveth shared an in-depth presentation about the basics of Circles and the benefits of using it as an option:
“The reason this seems scary is because a lot of problems haven’t been solved yet. You’re imagining today and how easy it is to hack things and then assuming it would be that easy to hack things in the future.”
While the Circles team is hard at work looking to solve technical problems and fill the gaps that would lead to implementation, this presentation highlights two important points that speak to the apprehension of using a blockchain based universal basic income:
- Code and Operational Safety — Just like a flight crew checks a plane 3 times before take off to ensure all mechanical and avionic programs are working properly, code and operational safety needs to be applied vigorously when creating a cooperative database. From basic usability features like delegated trust to larger threats like fake accounts and identity validation, a culture of ensuring safety and security is key.
- Data — While platforms typically sale, leak, license, or lose some of our most vital data, one of Circles potential objectives is to help validators optimize data to plug holes where community help is needed. Using data to create career pathways in underserved communities could be wildly beneficial, incentivizing education and community engagement.
One of the most dynamic aspects of crypto is the strong incentives baked into the core of most communities and protocols. I see a future where a project like Circles could be used as a complementary cryptocurrency alongside a base government currency. It would continually generate a personal cryptocurrency on your behalf but you would have to complete specific tasks within your community to claim it. That personal currency could then be used at specific vendors in your community that have clear and easy options to convert back to fiat if needed.
Taking it a step further you could survey user hobbies and passions then match tasks with their personal areas of interest. This could improve community conditions and heighten the perceived and residual benefit of working within your community.
All communities start because of a common interest. People build bonds in communities when those common interests turn into shared values. Those shared values lead to trust. That trust leads to help or being comfortable asking for a need to be met.
Cryptocurrency motivates community members to move from the “common interest” stage to the “help/fulfill a need” stage, quickly.
Imagine a Circles backed version of Task Rabbit where members of a validator’s network can request tasks to be filled by other users within the network. Or a validator that releases requests for community tasks to be filled (i.e. beach clean up, math tutors, mural painting etc.) and allows users to fill those tasks to claim additional personal cryptocurrency.
This encourages people to invest their time within the network. That desire increases when the task falls within an area of interest for the user. Blockchain technology allows the space for trust and cryptocurrency creates the drive for engagement.
This win/win relationship helps unite communities around fulfilling work and transforms universal basic income into a multipurpose tool that can strengthen disadvantaged but striving communities.
