Circles Universal Basic Income

What is money?

„Money can be defined as an agreement, within a community, to use something as a medium of exchange. As an agreement, money lives in the same space as other social constructs like marriage or lease agreements. These constructs are real, even if they only exist in people’s minds. The money agreement can be made formally or informally, freely or by coercion, consciously or unconsciously.“

„Our money and monetary system are, therefore, not de facto realities like air or water, but are choices, like social contracts or business agreements.“

Prof. Bernard Lietaer

Why a Basic Income?

• The most unbureaucratic way to establish social welfare

• Automation dividend • we should not conserve work (places) - we should get

work done • Maximize the cake vs. maximize AND make sure

everyone participates

• Trickle up vs. trickle down

Why Circles?

• Implementing the basic income on the most basic level

• A fair currency

• Creating value on the (Ethereum) blockchain

Problems to solve

• Giving the currency value

• Solving the Sybil attack problem

Circles at its core (1/4)

1. Everyone can create a new account

2. An account will constantly generate an income (about 1,000.00 units per week)

3. The rate at which the income is generated will increase by g=2% per year

4. A new account starts with the income that will be generated in the next 3 months

5. One month of income is for the account owner – the other two are reserved for people who trust this account, it is called the trustee reward.

Circles at its core (2/4)

6. Accounts can trust another. This will allow both accounts holders to exchange their coins 1:1

7. Trust can be revoked by both parties.

8. If an account trusts another account it is credited with 10% of the remaining trustee reward.

Circles at its core (3/4)

Circles at its core (4/4)

9. Arbitrary groups can be created.

10. Groups can add accounts as members.

11. Groups can exclude accounts as members.

12. All members can convert their private money into group money (1:1 exchange rate). This exchange is irreversible.

Regular transactions - Transitivity

A B C

A Circles: 300 B Circles: 100

A Circles: 50 B Circles: 350 B Circles: 350

C Circles: 600

Regular transactions - Transitivity

A B C

A Circles: 300 -100 B Circles: 100

A Circles: 50 + 100 B Circles: 350 - 100 B Circles: 350 + 100

C Circles: 600

Sybil attack

A B C

Sybil 1

Sybil 2

Regular transactions - Groups

A B C

Silicon Valley Ethereum meetup group

Ethereum early adopters

Regular transactions - Groups

Palo Alto Residents

Bay Area Residents

United States Residents

World Residents

Value of Money

• Personal Money

• max(val(group1), val(group2), … groupN, val(liquid_connection1), … val(liquid_connection1))

• Group Money

• min(all members: persons and groups)

Groups

• Web of trust rules • At least connected to x% • Maximum distance = y • Mean shortest distance

• Any kind of voting mechanism • >50%, 66%, …

• Centralized with regular passport • Employee of a business • ….

The growth rate g

The growth rate g

The growth rate g

• market cap = f(g) (and a lot of other parameters)

• maximize g*f(g)

What is Circles

• Ripple + UBI = Circles

• Money (creation) that serves the people

• The debt doesn’t need to be payed back

• Credit is not approved based on rating of banks but fixed per person

• No (forced) debt union – more resilience

• A steady growth rate of money – more stable economy

Debt is not repaid

Elinor Ostroms design principles for Common Pool Resource• Clearly defined boundaries (clear definition of the contents of the common pool

resource and effective exclusion of external un-entitled parties)

• Rules regarding the appropriation and provision of common resources that are adapted to local conditions;

• Collective-choice arrangements that allow most resource appropriators to participate in the decision-making process;

• Effective monitoring by monitors who are part of or accountable to the appropriators;

• A scale of graduated sanctions for resource appropriators who violate community rules;

• Mechanisms of conflict resolution that are cheap and of easy access;

• Self-determination of the community recognized by higher-level authorities;

• In the case of larger common-pool resources, organization in the form of multiple layers of nested enterprises, with small local CPRs at the base level.

Don’t donate - invest!

The „Berlin BGE Späti“ (UBI - shop)