Imagine if, once a month, everyone received a baseline amount of money regardless of wealth or income. And this baseline amount was “hardcoded” into everyone’s account, meaning it has no dependence on partisan politics and was very difficult to change without a broad consensus. It would be an automatically executing transfer, or origination, of funds that everyone receives seamlessly at the same time. And it would be done securely without a chance of fraud.
If you think this sounds like a perfect task for smart contracts, then we might be on the same page.
We are quickly transitioning to, and in many ways have already arrived at, a cashless society. For the most part, funds are transferred between network-connected devices directly, and the digital transfer functions as an exchange of digital currency backed by bank deposits. But these bank deposits are again simply digital representations of the amount of cash that our central banking system has agreed is in circulation. “Cash” as we used to know is a more of an archaic relic and its convertibility into pieces of papers just a formality.
What if everyone had a secure wallet address, assigned by the federal government in a similar way to a social security number? Or some other centralized entity. Everyone could use this unique identity to engage in transactions with government entities. It would be your “official” wallet address. These addresses would be connected to a publicly maintained blockchain system where all of these transactions would be recorded and stored.
If done on a platform similar to Ethereum, with smart contract functionality, the possibilities get interesting. For each wallet on this platform, we could mandate an automated payment of digital currency that occurs on a monthly or weekly basis, or any other time frame. And the wallet could be linked to a bank account or other financial instrument at the discretion of the wallet owner. In this way, everyone would start with a baseline amount of funds regardless of wealth, income, or background. It would be a ratification of one of the famous four freedoms outlined by Franklin D. Roosevelt: the freedom from want.
Where would the funds for the transfer come from? There are many potential sources, but the most seamless one would be large companies in the digital space, specifically ones that leverage our personal data and the value we create for these companies by using their platforms. These would include Facebook, Amazon, and other digital platforms. Other means could include a wealth tax on passive financial instruments. The idea is to take reliably value-producing assets that draw on the contributions of every American, and then redistributing it so that we all benefit.
Executing such a wealth transfer automatically, using secure wallets and accounting on a blockchain, has three main advantages:
It's not subject to political whims
These payments would continue automatically, as the government only acts a guarantor and is not directly involved in the distribution of funds. A hardcoded smart contract would withdraw funds from wallets associated with large companies in the digital space and passive financial instruments automatically. It would hold these funds in escrow, and then deposit them in each citizen’s wallet, automatically. This would occur regardless of government shutdowns, or the inability of Congress to make decisions. It would take such decisions out of the hands of flawed political systems.
It's not discriminatory
The government, or anyone viewing the UBI blockchain, would only see wallet addresses. They would have no knowledge of the recipients, or their age, ethnic background, income, criminal history, or any other piece of information. All they would know is they are citizens, equally entitled to the benefits of being a citizen. It would remove the ability of governments to control the distribution of a UBI to favor certain groups and discriminate against others.
It's efficient and reliable
This type of system would not be difficult to implement; the coding for the fund distributions would be much simpler than many smart contract applications. An automated digital transfer would be a major improvement of current government systems to manage entitlement program administration. It would occur mostly without direct intervention, nearly instantaneously. The process would likely follow these three steps:
→ Funds withdrawn to a gov. backed “holding” wallet
→ Monitors would verify a sufficient balance
→ Funds would be distributed to individual wallets
A blockchain-backed system to distribute a digital universal basic income would be a major improvement, but it is only in the conceptual stage. This is a very broad outline of what such a system could look like, and the details would likely be much more complex then this simple conceptual description can account for. But it's important for us and our elected officials to start thinking about how to adapt new technologies to solve our most intractable political problems. And to ensure equality of opportunity for all citizens of all backgrounds.
Disclaimer: The views expressed in this post are those of the author only and do not necessarily represent the views of Decentralized Web Technologies, Inc (DWT) or of any persons or entities associated with DWT and its affiliates.