The Cryptocurrency-Based Projects That Would Pay Everyone Just for Being Alive
by Nathan Schneider  /  May 29, 2015

“The idea that every body should receive a paycheck simply for being alive is fast becoming a darling of several factions: tech investors who expect millions of jobs to be automated out of existence, libertarians who see it as a way to avoid the inefficiencies of the traditional welfare state, and certain lefties who have embraced it as part of a way to separate government benefits from work. Dylan Matthews of Vox has produced a string of primers on the subject, and The Atlantic recently profiled a Reddit-famous basic income advocate. Yet the idea goes against everything Republicans are supposed to believe about no free rides, as well as Democrats’ preference for welfare programs designed from on high. Even if there were solid mainstream support for basic income, Congress can barely do anything these days, much less consider a wholesale redistribution of wealth. This may not be such a dead end for the concept as it seems. Over the past few months, basic income advocates tinkering with Bitcoin and other online currencies have created a series of experiments under the premise that we can start playing with basic income now, whether the government gets in on it or not.

Greg Slepak, for instance, is the sort of Bay Area software developer who reads the Yelp reviews of homeless shelters to learn about their conditions. “We cannot say with a straight face that we provide welfare to Americans,” he has concluded. “We don’t.” His response, of course, is software—in particular, Group Currency, a specification for online currency systems that provide basic income–like distributions of funds to all their users. He believes that the technology underlying Bitcoin—a database called a blockchain, shared among its users without need for central authority—makes this possible in ways that it wasn’t before. When based on a blockchain, money itself can be a shared resource. “For the first time in the internet’s history, mass ownership is possible,” Slepak says. “It gives individuals back their self-determination, back their dignity, back their freedom.” So far the two projects Slepak recognizes as fitting the Group Currency spec are uCoin, which gives every member of the system a “Universal Dividend,” and (possibly) Swarm, a cryptocurrency investment platform that refers to its payouts for all participants as a basic income. But there are other digital currencies being developed or discussed that include their own variants on the basic income idea, including the Kiwicoin in New Zealand, Cubecoin, Strangecoin, the Worldwide Globals Organization, and theBasic Income Project, LLC. The ones using cryptocurrency have their own subreddit.

In San Diego, Alex Goodwin has more than just a schematic. The initial implementation of his idea, FairShare, is already up and running—it uses a bot on Reddit to pass out portions from a stash of donated bitcoins. Payouts are still small, but they’re there for the taking. Slepak considers the FairShare specification “vague,” but Goodwin wants to develop the project through practice, not theory. He takes as his motto an utterance of Satoshi Nakamoto, the pseudonymous inventor of Bitcoin: “We shouldn’t delay forever until every possible feature is done.” Perhaps the most eyecatching digital basic income out there is the one associated with BitNation—”a collaborative platform for do-it-yourself governance” led by Susanne Tarkowski Tempelhof, a Swedish entrepreneur whose resume includes contracting stints in Afghanistan and Libya. The idea is to use blockchain technology to provide opt-in, state-like services free from the constraints of borders. Basic income is to be one of those services alongside pensions, marriage contracts, and “contract enforcement”—though the program has fallen short of its initial $20,000 crowdfunding goal. Tempelhof is outright opposed to a basic-income scheme coming from a government. “At Bitnation everything is done through voluntary means, rather than through forcing people through the use of—or threat of—violence,” she says. “We believe voluntary participation is the only morally defendable way of doing things.”

In principle, a DIY basic income scheme need not require cryptocurrency. For instance, one could set up a trust of some sort that would take donations and distribute dollars to, say, every active Social Security number. Of course, just the cost of cutting and mailing checks would cost hundreds of millions of dollars. And that’s one of the advantages of using cryptocurrency, which can be transferred at zero or negligible expense. Given the legal ambiguity of cryptocurrencies, too, they offer a means of bypassing the regulations and taxes that would come down on such a fund based in regular money. Another advantage of cryptocurrencies is that they can accrue value as they become more widely adopted. (The 10,000 bitcoins used to buy a pizza in 2010, when only a few people were on the network, are worth almost $2.4 million now.) When more people have them and use them to exchange with each other, they tend to become more valuable. Basic income, since it involves wide distribution, could be a very good way to make a cryptocurrency valuable. Already, similar kinds of giveaways have been used to create pump-and-dump schemes using Bitcoin clones, where a free giveaway ratchets up the value just long enough for the founders to sell off their coins and make the currency worthless again. Another downside of these pseudonymous blockchain systems is their vulnerability to what is called a “Sybil attack”: With no obvious way of confirming who is who, one person could claim the payouts for multiple accounts. This is a defining challenge for basic income schemes based on cryptocurrencies, and some have addressed it more convincingly than others.

For those wary of cryptocurrency, there are other ways to fund a basic income program that don’t require an act of Congress. UNICEF has been testing basic income payouts in India; the organization GiveDirectly turns donations into direct cash transfers in poor regions. Alaska already has a basic income–like program with its Permanent Fund, which pays out about $1,000 in dividends from the state’s oil revenues to every resident, every year. This is an idea that progressive businessman Peter Barnes adapted into his “Sky Trust” proposal, which would use carbon permits to curb emissions while putting the fees into a basic-income fund. Barnes calls for using such trusts to treat resources like clean air, intellectual property, and the electromagnetic spectrum as commons—from which we are entitled to “liberty and dividends for all.”

Barnes’s proposals, however, would require government intervention of one kind or another, such as California’s cap-and trade program. In lieu of that, a Citizen’s Permanent Fund might be seeded with voluntary contributions. Wealthy corporations and individuals could contribute to such a fund as part of their charitable portfolio. Activists could also target entities that take advantage of the commons—energy companies, internet giants, pharmaceutical firms profiting from publicly funded research—and hold sit-ins outside their doors until they pay into the fund. Finance hackers like Robin Hood Minor Asset Management could pitch in by co-opting financial markets. One way or another, creating a decent basic income system now, even if it had only a little money in it at first, would give every potential beneficiary an incentive to see it grow. We’d get creative, because the more creative we got, the more we’d get. And having such a system (or systems) in place would change the conversation from whether to consider basic income than the more interesting questions of how.

We’d also start to notice some of the things that can go wrong. Cryptocurrency schemes run the risk of leaving us with a system in which you’d get your check only if you play by the founders’ rules. Many of us would also want to make sure that the redistribution goes the right way—from the top down. Imagine, for instance, that a small group of investors holds half of the tokens in a cryptocurrency, and then distributes the other half to the whole world as a basic income. The value rises as people use the currency, and everyone gets money for nothing—but the investors get a whole lot more, and their behavior could have seismic effects on the currency’s value. Another issue with blockchain-based basic income is that the people who need the money most may be the ones least likely to have the gizmos or knowhow needed to become fluent with digital currencies; as with the Bitcoin economy itself, the beneficiaries are likely to be white, male, and affluent. At the same time, a universal payout to everyone on Earth could do much to reverse global inequality—in regions with low costs of living and high rates of poverty, what seems like a little in the United States could mean a lot. For people without the necessary technology, funds could be held in escrow until they find a way to access them. All this is just speculation, however. It’s difficult to know what the strengths and weaknesses of various plans are until we try them out—and this new wave of digital experiments are an opportunity to do just that.

[Nathan Schneider is the author of God in Proof and Thank You, Anarchy. His website is, and he tweets here.]

If we no longer force people to work to meet their basic needs, won’t they stop working?
by Scott Santens  /  Feb 19 2015

What underlies a question like this is that it’s okay to force people to work by withholding what they need to live, in order to force them to work for us. And at the same time, because they are forced, we don’t even pay them enough to meet their basic needs that we are withholding to force them to work.

Now, what if we no longer withheld access to basic resources to meet fundamental shared basic needs? What if work in the labor market was then fully voluntary? What if we could no longer force people to work for low wages? Maybe wages would go up? Maybe productivity would go up? Maybe the automation of human labor with technology would be accelerated? We could find the answers to these questions. We already know from experiments what they are likely to be. Until universal basic income is policy though, we won’t know for sure, and we will continue forcing each other to work by withholding food and shelter from each other. So what’s one belief that seems to be a major stumbling block in keeping people from more readily accepting the idea of paying everyone a basic income, in addition to the importance of it?

We all have three choices: 1. Work for others. 2. Work for ourselves. 3. Do zero work. If you believe option 2 exists, you might believe there’s no need for basic income and that it’ll only enable option 3. I don’t believe option 2 actually exists yet, but that it needs to, and can with basic income. Why don’t I believe option 2 exists? Can everyone actually just work for themselves? Doesn’t this require some form of starting capital? What if none exists? What if the education doesn’t exist? What if there are barriers to entry? What if competition at the top actively prevents this? What’s the percentage of the population that actually has option 2 in practice and not just in theory?

Regarding option 3, is this truly an option as well? Let’s take being homeless for example. Let’s say someone chooses to be homeless because they don’t want to do any work. They sleep under bridges and eat out of dumpsters in order to avoid any work. Is there really no work involved here? This seems like it can involve a lot of work. Finding food in dumpsters can take hours of work, and finding places to sleep can take hours of work, and also involve moving frequently from place to place. It seems to me that homelessness can be exhausting. Then there are the laws. Here in my town, we like to tear down homeless camps. This happens in lots of other places too. Being homeless is not allowed. There also exist laws against dumpster diving and companies even will do stuff to tossed food to actively prevent people from being able to eat it. We put up homeless spikes, and toss homeless people in jails. I think the best example though is this one, where a guy was not even allowed to exist on his own in the middle of nowhere. He was shot and killed. So no, I just don’t think we really allow any options except for option 1.

We are a one option society. Work for others, or else. That is our system as constructed. Those who can work for themselves must first work enough for others, and those who wish to do no work must first work for others, or be born to parents that make it and option 2 possible without any working for others. How can we make it possible for option 2 to actually exist? My favorite story is Garrison Frazier. It’s a story I first learned about from Karl Widerquist, and included in this article. He was a freed slave and chosen as the spokesperson for other freed slaves. He was asked about slavery and how he could be truly free from ever being enslaved again.

Slavery is, receiving by irresistible power the work of another man, and not by his consent. The freedom, as I understand it, promised by the proclamation, is taking us from under the yoke of bondage, and placing us where we could reap the fruit of our own labor, take care of ourselves and assist the Government in maintaining our freedom… The way we can best take care of ourselves is to have land, and turn it and till it by our own labor…”

This is to say that without owning a minimum amount of land, it is not possible to truly live by your own labor. One must have this ability in order to not be forced to work for others. If you can’t grow your own food or build your own house, you can’t live by your own hands. This option must exist. But does it make any sense in this day and age to give everyone land? How would we even accomplish this? How would it be universal and equal in quantity and quality? What if some land didn’t grow food? How would this work in cities where our markets have created the dense populations of labor required for them to exist?

Universal basic income is how we can accomplish what universal land would accomplish, in a far more efficient, flexible, and equitable way. By giving everyone enough cash to purchase food and shelter, we meet the requirements needed for option 2 to exist. And yes, we also then meet the requirements for option 3 to exist. But really how different is it from option 2 anyway? If everyone got enough land to be free, and they refused to work for others, they would have to either work it or die. In the same way, if someone gets a basic income and refuses to use it to buy food and shelter, they will die. But seriously, how many people refuse to eat and don’t want shelter? Are we not deluding ourselves when we think that the only reason people eat right now, is because we are limiting their choices with food stamps, or that drug addicts somehow don’t eat? Everyone needs to eat. It’s a basic need. Meanwhile, this concern that people with their basic needs met don’t have other needs, is incorrect. We know we all have many more needs than our most basic ones.

Source: Maslow’s Hierarchy of Needs

We aren’t going to stop working to meet all our needs, just because we make it easier to meet some of them. Why do we pretend otherwise? I personally believe our collective belief so many of us feel, that we all really want to do nothing whatsoever, is due to our systematic devastation of intrinsic motivation from birth.

Source: The New Economics

We pummel intrinsic motivation into the goddamn ground, so that many of us feel extrinsic motivation is the only kind to exist. We look forward to vacations so that we can do nothing. We come home from work excited to do nothing. So when we think of actually enabling everyone to do nothing, we imagine a world of everyone doing absolutely nothing. We think this, because in our everyday experience, intrinsic motivation feels rare. It feels rare because we don’t see it. We don’t see it because we ignore it, and because we do everything we can to reduce it. Here’s an example of destroyed intrinsic motivation. Imagine you are a kid again. You enter a science fair because you love science. Lots of kids get ribbons for theirs and you don’t. Crushed, you decide you aren’t good at science after all. The core problem here is we gave anyone ribbons.

Another example. Again, you are a kid. You love learning. You’re an amazing visual learner. Your class involves little visual learning and you get Ds on your report card. Now you hate school and think you’re dumb, even though you’d get As if there was more visual learning in both teaching and testing. The problem here is we graded anyone at all. Not only are we good at destroying intrinsic motivation, we’re also great at ignoring it. Imagine your mother cooks you your favorite meal because she loves you, and after, to thank her, you put a $50 bill on the table. No one would ever actually do that, right? Why? Because her motivation for the meal was not extrinsic in motivation. Paying her might even lead to her never wanting to cook for you again. This seems to be our major problem. We have oriented ourselves so extrinsically, that we think no one would do anything for any other reason whatsoever, without cash as part of the equation. And yet at the same time, we know this flat out isn’t true.

We also know that our use of extrinsic rewards can actually be harmful, and as we automate the labor extrinsic rewards don’t hurt, we’re going to increase negative impacts on what work remains.

As for the science we have to confirm how little work is actually reduced when people are guaranteed basic incomes, we need only look to our own Income Maintenance Experiments in the 70s, Canada’s Mincome Experiment, basic income experiments in Namibia and India, and GiveDirectly’s unconditional cash experiments in Uganda and Kenya. This is not all the evidence we have. There’s more. There are cash transfer programs in place all over the world.

From all of this we know that when people are given money to live, on one extreme end some like students and mothers work a bit less, and on the other extreme end, people work even more because they are enabled to do so. The problem is that despite all of this data, we still have our various mental stumbling blocks. We think people have no intrinsic motivation. We think people can’t be motivated externally to work by something as simple as just paying them more. And we think option 2 exists, because it should and we want to believe it does because otherwise we’re left with supporting a system with only one option. And we really don’t want to believe that’s true, because that says something about us, we as a society really don’t want to face.

[If you want to go deeper down into this particular rabbit hole of our one and only current choice, I suggest reading the same book I have, Independence, Propertylessness, and Basic Income, whose author Karl Widerquist has kindly made available FREE in pre-published form. Chapters 1, 2, 3, 4, 5, 6, 7, 8, 9, 10.]




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