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Can UBI be tested with Digital Currency?

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This article on the discrepancy between consumers' lifestyle and deteriorating workers' rights has sparked a prodigiously long discussion on the …

This article on the discrepancy between consumers' lifestyle and deteriorating workers' rights has sparked a prodigiously long discussion on the Futurology subreddit (where the usual median length of the discussion is somewhere around 10 comments). Such topics now regularly venture into discussing the merits of Universal basic income (UBI), which as an idea was practically non-existent in the mindset of two or so years ago.

An offhand comment mentioning "digital credits" got me thinking about Auroracoins: in short, Auroracoin is extremely similar to BitCoin, with the distinction that it is given away freely to any citizen of Iceland. In a very real and non-vapourware sense, it is almost what UBI wants to be.

Imagine if:

  • A cryptocurrency is created not with a fixed total amount like BitCoin, but with a "long tail" of small amounts being periodically generated like Dogecoin (this idea introduces both the initiative to "get rich by mining" and covers the "disappearing" money in lost wallets, forgotten wallets, etc)
  • It is pre-mined by this central authority to the point equivalent to Doge's "long tail", where it is no longer attractive to mine huge amounts of coins simply by having better hardware
  • It is distributed to everyone fairly and periodically. Of course, this is the hardest problem since it requires that everyone gets his share, that fraud is prevented and that everyone who participates in such a system has access to computers and the Internet to even use it. Auroracoin, unless I'm mistaken, stops short of the "periodically" part.

Implementing something like that would allow the principles of UBI to tested in real-life. With the prevalance of smart-phones, it's easy to imagine that people would actually use it, firstly for low-value transactions (or even favours - like "would you cut my lawn for 100 coins?") and it would sort of test the premise of UBI in a very low-impact way.

Of course, it's harder than it seems. For one, there's the problem of the 51% attack which basically means that if a single entity controls more than 50% of mining, it can do absolutely anything with the currency, including creating money out of thin air instead of mining it the "proper" way (and there is less incentive in mining if the currency is largerly pre-mined). For the other, it would mean that ultimately there is more and more coins in fluctuation and that there's the dangers of both it losing value and there being less money to distribute later on.

In addition to those, there's the whole other issue of legality and taxability. Since cryptocurrency "wallets" (which approximately translate to "bank accounts" in conventional banking) can be created by anyone, indiscriminantly, in any number they choose to do, and coins can flow freely between the accounts, there is no practical way of actually tracking and taxing it. It's literally like having untracable digital cash.

A patchwork "solution" to this may be a mandate that everyone has "official" cryptocurrency wallets which are registered with some authority ("natural", though probably the worst, such authorities are the current banks), and that all "official" transactions (e.g. paychecks, other income) must pass through these wallets, but as with cash - there will always be an incentive to go around official bank accounts.

I'm sure there are many more practical problems (like, what would happen to the economy now that fractional reserve banking is not technically possible?), but it's a start. It's the kind of experiment I would like to participate in.

That said...

I don't think post-scarcity utopias are achievable. Not because I'd be opposed to living in one but because I fear every such society will "auto-collapse" mostly due to boredom. It is because of certain indisputable traits of the human nature. I would not call those traits positive or negative, since we, as animals, have evolved to those traits by living in an environment of scarcity, and as mammals in social groups. Given the choice, people tend to think in short-term gains and in the short-term, people would likely to choose boredom over work, while at the same time they seek to be viewed positively by their social group. Money today has no physical worth in itself but is valued as a number in a computer which translates to how much you can do with it, how much indirect influence in your surroundings you can have. The "ultra-rich" use money mostly as a measure of power, not as something necessary for their bare lives. A similar mechanism is in action with everyone who bought a nicer house or a beautiful car to impress their social circles.

It would really take a serious change in the way we think, much faster than the physical evolution itself can bring us, to, e.g. not feel bored and/or depressed and/or resentful when nothing challenges us. What are we going to do with our free time? Write poetry about how nice it is to have free time? The "hard-driven" CEO-s of mega-companies do not go to work to earn for their living expenses, they go to work because they are challenged by it, and the amount of return for their activities, the measure of their satisfaction is conveniently expressed as money. In absence of a social structure which would measure activities which benefit the society as a whole and are long-term over activities which show short-term success, it is an understandable state of affairs.

And of course there are still the issues of who cleans the toilets in Star Trek and who will fix the machines when they fail. It's not completely impossible, but something major needs to change.

It is clear that something needs to be done, and UBI is a thing, so maybe UBI should be done. One of the non-utopistic versions of UBI is not to practically eliminate money by giving everyone a large amount of what will ultimately be a worthless number in a computer, but by giving everyone "just enough to make ends meet," leaving the option of earning more available to those who want to and have the capacity for it (as it is now - though having luck is still better than being actually capable). Those people would not be hungry, they would have a roof over their heads, but they could still be resentful about the "better" lives they see from those with more money. This may coax them to join the rat race, or they can live contently with what they have and lead creative, artistic lives - what do you think is more likely to happen?

Side-note: Dogecoin and The idea of Whuffie

Whuffie is a sort of currency from Cory Doctorow's Down and out in the Magic Kingdom, where it is gained as "reputation points" to individuals for their actions. Almost every person has a Whuffie counter and can give and receive Whuffie freely to/from others. As Wikipedia says:

Whuffie has replaced money, providing an esteem- & admiration-rewarding motivation for people to do useful and creative things. A person's Whuffie is a general measurement of his or her overall reputation and is gained (or lost) according to a person's favorable (or unfavorable) actions. Public opinion determines which actions are favorable or unfavorable. The Whuffie of one who rudely pushes past others may suffer, as she falls within the disapprobation of those pushed, or witnesses of the event. A much-loved symphony, on the other hand, continues to earn the composer Whuffie as more people enjoy it.

To me, this sounds awfully similar to how Dogecoin works right now, with "tipping" people for good ideas, good posts, or just when you feel like it because you feel good about tipping. It's the closest thing to reputation currency currently active on the Internet (especially since its "convertible" value is fairly low).

Of course the original idea of using it in a completely post-scarcity system (read the book! it's interesting! and it's free!) is very very far-fetched, but again, it's one way things can end up.

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