A cryptographic currency with universal dividend in the works

[JBitD]

I'm curious what other anarcho-capitalists and Austrian economists make of this.

 

There is a platform called uCoin which will allow people to create their own "group currency". There is currently one test currency and a working client, but there are plenty of bugs as it's very beta.

 

The concept is that everyone has a wallet which is tied to a real person or company. You need to be "certified" by at least 3 other people to have member status, which allows your node to mine coins instead of only being a mirror. Both certifications and memberships expire and have to be renewed every month. Unlike Bitcoin where the miner which completed the block gets a reward, instead everyone who has a wallet gets a monthly 'universal dividend' which is equal for all and based on the average value of currency in people's wallets.

 

It's based on the Relative Theory of Money, which has a Wikipedia article marked for deletion because it seems to only be based on a book by a French author, it seems the whole book is also a webpage but trying to understand new abstract concepts through Google translate is not easy. Their grievance with currencies like Bitcoin is that the first to mine them get most of the money, and then when no more currency is being printed people would have to work for those with Bitcoin to get any. 

 

So this makes me wonder, the conventional arguments against inflation is that it devalues everyone else's money in the bank and who wants a loaf of bread to cost thousands of dollars in a few decades. BUT if everyone is being paid the money being printed, like a QE for everyone, then who cares if prices go up because the dividend can be indexed to inflation so it doesn't have much of an effect on your purchasing power. Although any money stored does become worth less and would have to be invested properly. And who cares how many digits something costs when we will be using secure hardware wallets in the future, it's not like we'll be pushing around wheel-barrels full of cash. (It hides the problem like our 46 million people long bread lines we call food stamps are hidden by ebt cards.)

 

I suppose the third argument that long-term inflation is okay is that there will be a super intelligence around 2045 which will discover a system of universal ethics and come up with the best monetary system, as well as the cure for every disease so we don't even need a long term plan, how about one that just gets everyone out of poverty now and can last a few decades. Do you have an argument against a new currency people voluntarily join which prints money every month indexed to the average value of individual's wealth which is a reason that trumps it ending poverty? Even applied to the current system which is not voluntary and then that would be an argument from effect, how else is inflation bad which I haven't thought of? This Relative Theory of Money seems to be too new for anyone else to have commented on it or even fully explained it, which is why I find it hard to form any opinions on it, but it's very interesting.

[Frosty]

I don't think it's a fair grievance, it takes a lot of electricity and hardware and time to mine cryptocurrency, those people who mined it first are people who took huge risks in investing into a currency they had no idea would increase in value, in fact most of the millionaires who came out of bitcoin were about 3 years into mining before they saw significant returns, and the bottom could have fallen out of the market at any time.

 

If it was a sure bet then you'd have seen a great many big investors dump a very large amount of money into mining, but they didn't, so it's risk vs reward system, those who take the risk early and invest the most get the most reward, it's really not unlikely any other investment except the risk was exceptional at the time because no one had any idea if crypto currency would take off.

 

Your discussion of inflation is kinda pointless, if you print more money but it goes to everyone so that no ones % share changes, then you're just wasting your time mining it, no one is going to mine currency which cost money only to maintain the same share of the currency, bitcoin is already hugely divisible so it's not necessary to continue to mine it just to pump the numbers up. QE is used to rob/tax everyone who holds savings or assets in a specific currency in order to give that money to someone else to spend at the current value.

 

If the currency is voluntary then of course there's no argument against it by libertarians/anarchists, but encouraging people to use it when it represents some automatic loss in value to them over time is a hard sell, remember that if you're giving money to other people in any way by inflating the total supply you're devaluing everyone else's savings, there's no way around that, even in principle.