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Bitcoin: A Creative Solution For Universal Basic Income

by Pragati Shrivastava
Bitcoin: A Creative Solution For Universal Basic Income

Though just a hypothetical, this article will touch on the idea that Bitcoin (BTC) is a creative solution for Universal Basic Income (UBI). You may have heard Democratic presidential candidate, Andrew Yang, talking about Universal Basic Income on the campaign trail, but exactly what is UBI? The quick answer is that it is the notion that every person, irrespective of their employment status, should be guaranteed a regular income. Some people are captivated by this idea; others scoff. The ones in favor of UBI believe it will encourage entrepreneurship and rescue people from the extinction of jobs caused by automation and artificial intelligence.

Regardless of the arguments for and against UBI, low estimates for $1000 for every American a month, and some groups think every week, in this economy, could lead to at least $3.8 Trillion in debt; that’s four times the current amount being spent on government welfare programs. Despite this, discussions about UBI have been ongoing for a long time, but back then, no one was thinking about Universal Basic Income in the form of cryptocurrency.

Bitcoin could be distributed as UBI. Holders would be allowed to trade their UBI tokens and exchange them for fiat currencies or hold them as assets for possible future gains. Some UBI-based cryptocurrency projects like SwiftDemand, Mannabase, Circles, and Solidar are still in its early stages of development and distribution, but they exist. Crypto as UBI can be used to support institutional sustainability and growth and UBI tokens can also be distributed to charities and small businesses.

Several cities in the Netherlands already provide basic monthly income for test groups; Finland has just embarked on a historic journey with Finnish Parliament passing the act authorizing a basic income trial. For two years, a random sample of 2,000 individuals drawn from current working-age beneficiaries of unemployment benefits will be receiving an unconditional payment of 560 Euros, but will replacing fiat with cryptocurrency work?

Using cryptocurrencies for providing Universal Basic Income could save the government a significant amount of your tax dollars from independent welfare programs by substituting crypto payments. This could lead to significant savings for safety net programs, which cost the federal government $366 Billion in 2016 alone – this does not include Medicaid and Medicare. While it has pros, there are a few potential disadvantages too. Bitcoin is popular for its volatility and for someone relying on a fixed income, a sudden cryptocurrency market correction could result in loss of value to their holdings. Using a stablecoin instead of Bitcoin could address the issue of volatility.

Another key issue is identity management and it would be a challenge to provide cryptographic key security for every participant. Additionally, there would need to be an efficient way to handle the revocation of compromised keys and re-issuance of new private keys to citizens who’ve lost or somehow compromised it. Though cryptocurrencies are seeing rapid adoption, they cannot be a real alternative for fiat money due to the limited amount of service providers accepting cryptocurrency.

Bitcoin-based UBI is still unproven however it is a creative solution to address economic security and provide an assured income to all social causes. By thinking outside of the current financial box, we may be able to provide UBI using cryptocurrency in a few years from now.

What are your thoughts? Is Bitcoin – or other altcoins – the route to Universal Basic Income?

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