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What is UBI?
Imagine a world where every adult receives a regular sum of money to cover basic needs and pursue their dreams. This is the promise of UBI, a concept that’s been buzzing in economic circles for centuries, from Thomas More’s Utopia in 1516 to Andrew Yang’s 2020 US presidential campaign for a US$1,000 monthly “Freedom Dividend.” As automation and AI reshape job markets, UBI is gaining traction as a potential safety net. But how do we make it happen? Enter crypto, a decentralised, blockchain-based technology that could be the key to turning this utopian dream into reality.
UBI is a government program that provides every adult citizen with a fixed, regular payment. Unlike traditional welfare, which often involves complex eligibility criteria and bureaucratic oversight, UBI is universal, unconditional, and periodic. Its core aims are to eradicate poverty, simplify social safety nets, and provide financial security, especially in an era where automation threatens jobs.
Research suggests UBI can improve physical and mental health, boost financial stability, and stimulate economies through increased consumer spending. Yet, UBI also raises valid concerns when it comes to the cost, at around US$12,000 per person annually. Very possibly, UBI will also reduce the incentive to work, driving up unemployment; though others argue modest sums such as US$1,000 a month still necessitate employment for most.
Is UBI happening anytime soon?
The idea of UBI has gained momentum, particularly post-COVID, when governments worldwide issued direct cash payments to citizens. Pilot programs, like the Stockton Economic Empowerment Demonstration (SEED) program, gives $500 monthly grants to 125 residents. This programme demonstrated tangible benefits such as better job prospects, reduced financial volatility, and improved mental health. Though not directly referencing UBI, Singapore’s Community Development Council (CDC) has also rolled out a scheme which distributes vouchers to every Singaporean household to help with daily expenses.
However, scaling UBI faces significant hurdles, with the biggest being the cost. For instance, Andrew Yang’s US$1,000/month plan was estimated at US$2.8 trillion annually, only partially offset by proposed taxes and program cuts. Political opposition is fierce, with a 2020 Pew survey showing a narrow majority of Americans oppose UBI, though support is higher among younger, lower-income, and minority groups. Critics also argue it could exacerbate poverty if it replaces targeted welfare. Despite these challenges, societal trends such as rising income inequality, automation’s impact, and successful pilots suggest that UBI is gaining ground. It may not arrive tomorrow, but it’s looking more and more inevitable.
The opportunity for Worldcoin
Worldcoin is a project co-founded by Sam Altman which aims to create a global identity and financial network. Worldcoin uses iris-scanning orbs to verify unique human identities, ensuring that each person has a unique decentralised identity (DID). Verified users receive $WLD tokens every two weeks as emissions, with over 11 million users claiming more than 112 million $WLD tokens since its inception in July 2023.
Worldcoin’s aims to be a universal identity system to distinguish humans from AI bots, coupled with regular token grants which is similar to UBI in some sense. With over 11 million users and integrations by platforms like Reddit and Discord, its rate of adoption is not to be scoffed at. $WLD is also a governance token for World Chain, their native a layer-2 blockchain. As society progresses towards UBI, it is possible that World Coin will play a pivotal role by providing DIDs as well as the financial infrastructural rails for UBI distribution as well as other financial services via World Chain.
UBI & Possible Unemployment - Where Does This Leave Us?
If UBI becomes a reality, people may have more disposable income and time. The line between unemployment and retirement may start to blur. Assuming that UBI will cause unemployment to increase, we can draw a parallel between the actions of the unemployed in the UBI future to the retirees of today. A recent survey showed that 57% of Americans aged 59-77 gambled in the last 12 months. Their participation remains high, with up to 85.6% of older adults gambling annually in some regions. In the age of UBI, we might see similar behaviours, except that the gambling would be brought on-chain in conjunction with Worldcoin’s DID.
Concluding Thoughts
The intersection of UBI and crypto is but a glimpse into the future as we navigate the age of artificial intelligence (AI) and robotics . Worldcoin shows how crypto can bypass traditional barriers, offering a scalable, transparent UBI framework. As automation reshapes economies, such innovations could bridge gaps in wealth distribution, empowering individuals globally.
Yet, with great power comes great responsibility. Increased disposable income from UBI could drive ean uptick in irresponsible behaviour, raising concerns about gambling addictions and unproductivity, necessitating robust regulations and support systems. As we stand at this crossroads, one thing is clear, crypto might just be the harbinger of a new economic era. What role will you play in shaping it?
*Disclosure: The information provided on this newsletter is for general informational purposes only and does not constitute professional nor investment advice.
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