The Utopian Experiment of “Universal Basic Income”: Why is Circles not suitable for speculation?

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A few days ago, the mysterious project CirclesUBI, led by Gnosis founder Martin Köppelmann for 7 years, surfaced. Once launched, the project was well-known in the blockchain industry such as Ethereum co-founder Vitalik Buterin and Uniswap founder Hayden Adams KOL’s forwarding support, what is the charm of CirclesUBI?

According to the white paper, CirclesUBI is based on personalized encrypted tokens and the trust social graph constructed between these tokens. The purpose of this currency system is to distribute money in a fair way, and as time goes by, finally realize wealth Equalization, and works like the universally available concept of “Universal Basic Income” (UBI, also known as Unconditional Basic Income).

But I want to say that this is actually just a very interesting social experiment, but not suitable for speculation.

So what is the universal basic income (UBI)?

Universal Basic Income (UBI) is one of the most cross-culturally attractive political movements in contemporary times. It has attracted the support of thinkers from all backgrounds, including Thomas Paine and Martin Luther King Jr. Celebrities such as Stephen Hawking, Guy Standing, Milton Friedman and David Graeber have all discussed this concept. This concept is also regarded as utopian, it is believed to release the creative potential of all people, and it is also the pinnacle of humanistic ideals for centuries.

In recent years, with the intensification of global wealth inequality, the topic of universal basic income (UBI) has rapidly heated up globally. The public support rate for the UBI concept has reached a new level, but the progress of the implementation plan has been extremely slow. It seems that the UBI system has been labeled as “too big to be implemented”.

The introduction of the global blockchain network has brought the possibility of experimenting with the concept of UBI.

What is Circles UBI

According to the official statement, Circles is a network built on trust. It is not a “get rich quick plan”. There have been accounts that try to deceive others. Please don’t trust fake accounts and people you don’t know.

In addition, Circles is not listed on Uniswap. Do not trade’Circles’ tokens on it (that is a scam). In fact, there is no single Circles token, which is not a common fungible asset. Also because of its design, it may never become a speculative asset.

Here are some common questions and answers about Circles:

Question 1: How to verify my account?

Answer: In order to verify your account, you must make three new users trust you and help you verify it. Please note that people should not verify each other if they don’t know each other.

If someone can gain the trust of strangers on the Internet, they can easily attack the Internet. You will lose your Circles tokens because of a fake account.

Question 2: How to receive basic income through Circles?

Answer: After creating a new wallet, you will need 3 incoming trust connections to verify your account. You can request trust by sharing the link of your personal data, or let others scan your personal data QR code.

During the testing phase of Circles, the project team will hold regular meetings in Berlin, where you can meet with team members and contact other Circles users in person. Once three people trust your personal data, the app will automatically deploy two smart contracts for you: one is your Safe and the other is your Circles token. You will receive 100 Circles as the initial payment and continue to receive regular UBI income.

Question 3: What is Circles Safe?

Answer: Your Circles Safe is a smart contract, which is responsible for holding your account key. You can add multiple devices (such as computers or mobile phones) to your Circles Safe. If you lose your mnemonic phrase, adding the device to your Safe can help restore your account.

Question 4: What blockchain does Circles use?

Answer: For the public test phase, Circles uses the Kovan testnet of Ethereum. For the official release later this year, it will use the xDai network.

Question 5: How are my Circles tokens generated?

Circles tokens are automatically created by the Circles smart contract. Currently, Circles is generated at a rate of 14 per week, with an annual inflation of 7%. You don’t need to buy through fiat currency, and you don’t need to maintain the network like other cryptocurrencies to get it. You just need to be a part of the community and get this token every day.

Question 6: How does trust in the Circles network work?

You can send Circles to people who trust you. When you trust someone, you can also send Circles to people in their trust network without directly trusting these people yourself.

This is called transitive trust and makes the Circles network easier to develop.

Example: A wants to send 10 Circles tokens to B, and B does not trust A, but B trusts C, and A owns 10 C tokens, so A can send 10 C tokens to B. You can have multiple different Circles tokens. When sending Circles, you don’t necessarily just send the direct tokens to someone.

Why is Circles just a social experiment

Note: The following content only represents the author’s personal views, and is not enough as investment advice.

In fact, the concept of universal basic income (UBI) itself is very controversial. Although UBI can reduce the gap between the rich and the poor in theory, unconditional airdrops will undoubtedly encourage everyone to love and dislike work, because in any case, the rewards for each account They are all the same, and this is completely contrary to the concept of “more work, more money” in traditional blockchains such as Bitcoin, so UBI is also called the concept of utopia.

In addition, UBI also requires each person to have only one basic income. However, the characteristic of the blockchain is that it is easy to create false accounts. According to the current Circles rules, each person can create multiple devices and emails. A personal account to mint more Circles token rewards, which is actually in conflict with the concept of UBI.

From a speculative point of view, Circles is not a good target either. Firstly, it has an unlimited total amount. Secondly, its issuance rate will become faster and faster, and it does not require cost to obtain it. This economic model leads to Circles is not suitable for speculation, which is why the official reminder.

Of course, this does not mean that the existence of Circles is meaningless. If it can be effectively improved, it may prove whether the concept of universal basic income (UBI) is feasible. This will be a very interesting social experiment, but please Remember, don’t invest your money for this.