Calling it an “open invitation for the world to “rethink the existing economic framework,” eToro co-founder and CEO Yoni Assia today announced the launching of GoodDollar, a blockchain-powered, non-speculative crypto project which is geared towards a global distribution on the principles of the universal basic income. The launch has the backing and blessing of eToro, with $1 million in funding from the trading platform to start things off.
Using Blockchain to Distribute a Universal Basic Income
The universal basic income (UBI) is a concept that has been explored by blockchain enthusiasts and technologists for some years as the divide between the technorati and non-technological workers deepens. The advent of artificial intelligence has hastened concerns for displaced workers. Several UBI experiments have been conducted or are ongoing, with varying results. The concept of the UBI is simple: everyone in a given group is given a guaranteed subsidy with no strings attached. People are still free to work or pursue entrepreneurial goals.
In the case of GoodDollar, according to a press release, from eToro:
“The experiment will research implementing 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 (UBI).”
The concept of social interest is explained a bit more in the primer. It is defined as “a monetary inflation mechanism designed to benefit the poor by allocating them most of the newly minted currencies.”
Yoni Assia has long been a proponent of acting in ways that have a positive impact on wealth disparities. He first described the Good Dollar nearly ten years ago in a blog post.
“Once all money is transparent, we believe that the invisible hand will become the visible hand, and the philanthropy bank could actually direct the economy to create more value. […]
“The most important intrinsic value are of individuals, since we believe that human life has value, meaning that individuals should get better interest rates than any other entities, hence a better world for all individuals. As for other entities, the value should be derived from their added value to the world in a democratic way. Academic institutions, for example, should have higher intrinsic value than corporations, and should receive higher interest rates. Culture and education have added more value to the world than can/should be derived as direct payment.
“Assuming that eventually all money is transparent and all his funds are in the system, an individual who has only $100 should receive higher interest rate since he needs more support to maintain his basic life necessities, while an individual that has $1M in deposit should receive a lower interest rate since he can add more value to the world through investments.”
The design of the GoodDollar system is such that simply amassing wealth does nothing to create more wealth, whereas using it to benefit those individuals perceived to need such investment will benefit both parties. (We suggest the reader check out the blog posts on the subject for a deeper understanding.)
GoodDollars will be available to anyone who undergoes social verification, and every person will, therefore, be assigned a value on the blockchain such that the algorithm will allocate them a share of the funds.
Interview: Yoni Assia on GoodDollar
We asked a few questions of Assia and garnered the following responses, which have been lightly edited for clarity.
CCN: Is there a particular incentive for blockchain companies to tackle issues like wealth inequality?
Assia: Even though wealth inequality is an expected outcome of free markets, good actors should care about helping those on the extreme end of poverty. Due to the decentralized nature of blockchain, blockchain can help wealth building in economies plagued with corruption and instability since bad actors can’t manipulate the value and records. In 2017, just 1% of the world’s population owned more than 50% of the wealth, and a lot of the individual members of the 1% have had the opportunity to accumulate wealth thanks to environments where the rule of law determines how things are run. In the world of digital assets, 0.7% of cryptocurrency wallets holding as much as 87% of total Bitcoins in supply. However, it might very well be that those 0.7% live in very unstable environments and this is how they manage to protect and build their wealth. Expanding adoption and use of crypto in undeveloped countries, war zones, or other areas where people can’t protect and build their wealth can therefore help those on the extreme ends of poverty close some of the gap with the wealthier population in developed ones, and help the poor in developed countries have a much more sophisticated mechanism to deal with impending technology unemployment, where menial jobs will be replaced by robotics. A voluntary universal basic income run on a blockchain may help those with less money break the cycle of struggling to fulfill their most basic needs and provide them with the ability to pursue their purpose.
CCN: How important is liquidity in the GoodDollar ecosystem?
Assia: Liquidity is certainly important in the GoodDollar ecosystem. A universal basic income is only valuable if the cryptocurrency is liquid with real purchasing power. GoodDollar aims to create a non-speculative cryptocurrency that will not be volatile in value and will be minted and freely distributed to any person, based on social identity verification on the blockchain.
CCN: What are some ways that everyday cryptocurrency users can help?
Assia: When the cryptocurrency will launch, individuals will be incentivized to hold their assets, receiving interest based on the respective individuals wealth. Until then, we ask the everyday crypto user to continue utilizing this ground-breaking technology.
CCN: Is the $1 million investment the last of eToro’s investments in the project?
Assia: eToro’s investment into the GoodDollar experiment will assist further development, deep research, economic modelling, product design, community outreach, and building partnerships with relevant tech companies, foundations/NGOs, and more. Currently, we don’t have further plans for investment but we are passionate about this project and will support this experiment with the resources we have on hand.
CCN: What kind of results are expected?
Assia: We’re still in the process of finalizing the mechanics of GoodDollar and are actively looking for experts in crypto and economics to provide the proper incentives to the GoodDollar framework. Once the details have been solidified, we can circle back for further conversation.
Images from Finextra/YouTube
Follow us on Telegram or subscribe to our newsletter here.