The crypto space isn’t known for its bleeding hearts. Most traders are too busy thinking about lambos to worry about universal health care, and they’re more likely to vote for Ron Paul than Bernie Sanders. But a leading crypto investment platform is launching a project that might combine cryptocurrency with a radical social experiment: Universal Basic Income.
At a Web Summit presentation earlier this week, Yoni Assia, CEO of eToro, unveiled the GoodDollar: a project to reduce wealth inequality with cryptocurrency. According to a later press release, the project is hoping to establish “a cryptocurrency that pays social interest to those who have less, and is continuously distributed to any verified participant for free, creating a global, open, universal basic income.”
Although billed as an “experiment,” the project has already secured $1 million in funding from eToro, which urges other companies and individuals to contribute as well.
“We believe that we can create a mass-market cryptocurrency that is engineered to reduce inequality and provide a universal basic income,” Mr. Assia said in a statement. “Engineers, product designers and economists are currently developing the prototype.”
UBI: Not Your Parents Socialism
For those who aren’t recent college graduates, Universal Basic Income (UBI) represents the latest effort to produce a market-friendly welfare state.
The trouble with most social programs, according to economists, is the freerider problem, which is why grandpa keeps complaining about food stamps every Thanksgiving.
The solution, according to some forward-thinking economists, is to give every citizen an unconditional stipend, regardless of their income. Since there is no danger of losing this “basic income,” and since it is not based on one’s social standing, recipients continue to have all the same incentives for hard work and success.
Socialism by Smart Contract?
However, solving poverty might take a little bit more than a smart contract. While GoodDollar and eToro have outlined most of the framework for a crypto UBI system—including social interest, governance and identities—it’s not quite clear how the new currency will establish its value proposition.
GoodDollar is not the first cryptocurrency to be distributed on the principles of Basic Income. There have already been several tokens launched on similar premises—such as Manna, Decentralized UBI, and People’s Currency. Although none of them have been successful at bootstrapping their value, they also had a lot less publicity—and funding— than the GoodDollar project.
The author is not invested in any digital asset mentioned in this article.