The worlds of cryptocurrency and socialism collide?
Socialism. It's a scary word to many people. We tend to over-simplify it in our minds and envision propaganda imagery of a communist revolt or a government "big brother" seizing our hard-earned property.
But socialism is really a much broader term. Building and maintaining roads for everyone to use is a socialist concept. Schooling for all children is a socialist concept. Rushing to aid citizens with ambulances and firefighters is a socialist concept. Of course, socialism can turn ugly and become problematic, but in reality, all economies have some socialist elements to them, even the most capitalistic societies. We all live in mixed economies with varying degrees of socialism and capitalism.
I've been contemplating the future implications of a world where the economy is run via cryptocurrency. Most cryptocurrency now runs as "proof-of-work" - that is, in a nutshell, a miner proves the work of "solving" a puzzle of sorts, and proves the work through the solution. "Proof-of-stake", however, is being implemented in a number of cryptos and might be soon implemented, for example, in Ethereum, as well. It's essentially the idea that the "stake" - the ownership of the coin, entitles one to a share of the mining in proportion to one's stake.
I wondered, what would happen if, say, in the future, a government were to purchase a sum of a cryptocurrency and distribute it to its citizens? At this point, it would be evenly distributed, enabling each citizen a stake. A basic income - enough to live on, theoretically, could be generated by this stake.
That's not to say a person could not do more to make a greater income. It would simply be a minimal income - a starting point - enough to cover basic needs. Beyond this, it would be up to the individual to improve their economic standing through their own endeavours.
The plus side of this would be a much lower cost to social programs. Many social programs are borne out of the problems created by poverty. By reducing poverty, the need for such programs would diminish. Take a simple example. How much does it cost to run the food stamps program (SNAP) in the United States? Estimates from this source say around $70 billion was spent on just the food stamps program in a single year in the United States in 2016. Additionally, housing and cash for social assistance cost about $700 billion in a year. This is not including the costs of social security and Medicare, which are more than a trillion dollars annually!
What if, instead, governments of the future bought "stakes" in a cryptocurrency that used proof of stake, and then issued a proportionate amount to citizens in these programs? Say they purchased a trillion dollars worth of a particular proof of stake currency, for example. Each citizen in the program would then receive their portion of this stake in income. Even after a single year, this would be cheaper than the current system. Not only that, a tremendous amount of money could be saved that wouldn't be wasted on the massive bureaucracy of the social welfare system.
Now, I'm no genius when it comes to how proof of stake would work, I'm just trying to think of a creative solution to a big problem here. Is this theoretically possible? Please, educate me and share your opinions in the replies!
sources:
https://en.wikipedia.org/wiki/Supplemental_Nutrition_Assistance_Progras
www.randomstringofwords.com/images/2016/socialism.png
yes! automation will reduce the number of jobs over the next 15 years or so. in the past labour saving tech has changed the nature of jobs but increased the number. a limit however has now been reached. a minimal basic income will be needed but it need not disincentivise people: rather it will unleash creativity. when welfare is attached to onerous conditions and has a punitive character, even though capitalaism needs a 'reserver army of labour', then the government is making serfs / slaves of people. [the case in the UK at present.] they do this anyway through money [see antonopoulos on this matter on youtube]. a cashless society which still has banks under the current style of regulation will be a society of total surveillance and we are heading fast towards it. a universally accepted crypto-currency which functions efficiently has the power to over come this. a universal basic income in a people's crypto will have value if it is used for exchange.
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A very interesting idea.
However, there is even a better one...a cryptocurrency designed specifically to be given away to anyone who signs up...distribution is done on a monthly basis, perhaps even moving to a weekly basis.
This is in the works...actually reworks since it had been released.
Simply give the currency away and not involved the government at all.
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Huh...interesting. What's the name of the currency?
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If something is given away, does it have any value?
If something has no intrinsic value and is given away, does it have even less of a value.
If, instead of giving everyone a basic income, what if they were given the actual food and housing to be the basic income. By giving them the basic income, the cost of those items will always continue to increase and therefor the basic income will increase.
The perfect example of this is college. College tuition has outpaced inflation. But, it is now easier to get into college and easier to get loans to pay for college. By giving more people access to college, it didn't lower the cost of college, because colleges didn't have an incentive to do so. Knowing that they would be paid, whether or not the student loan was paid off, colleges increased tuition fees and lowered entrance standards to accept more students. The final end result, we have 40% of current college graduates living at home because they can't find a job with a useless college degree.
I don't believe that a universal basic income would do anything but create slaves to the government. I think that there should be a "safety trampoline" for people. You run into trouble and the government gives you a boost to get back on your feet, not a hammock to make a lifestyle out of.
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Old age pensions are "given away". Lots of social programs and public services are "given away" (really, they're paid for via taxes, of course).
I would think it would need to be an already-existing currency that has market value and is bought by the government on the free market. Then, payees would own a part of a larger entity. Say, for example, that Ethereum moves to proof of stake. What if, in 10 years, the government invested in Ethereum and distributed this to its citizens? Ethereum would have value on the open market, so it would not cause it to diminish in value. In fact, it would likely boost the value, if anything.
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Public Services aren't "given away" by the people who actually pay the taxes on them. Pensions, while a flawed method of retirement savings, were worked for by the person who received them.
The underlining issue of a basic income is that it doesn't fix the problem. People not encouraged to work and be productive will not be. Competition drives innovation. So, it doesn't matter if they were handing out gold as the basic income, because soon it would devalue gold. Those still being producers would have to work harder to make sure the gold they had still met their needs to keep them above the basic income level.
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See, but there will always be those who either can not be productive for one reason or another, or simply won't be productive. The current system does not fix this problem either.
My point is that a basic income would alleviate symptoms of poverty by raising the very bottom to a level closer to sustainability. It would also provide for needs that could then be saved by cutting unnecessary social programs that cost far more because of the fact they need to be operated by a bureaucracy. To provide food for someone in a food program costs much more than the food itself costs because of staffing and documentation. If instead, a basic income was paid out to those users, it would be far, far cheaper for them to just go out and buy the food without all the extra bureaucratic costs.
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