A digital currency with built-in universal income, minimal energy requirements, and a bias towards equality.
If you were designing a digital currency that could actually promote justice and equality, would would it look like? Here’s one approach. It is rather different. The main objection is likely to be that, in order to benefit all people equally, it embraces verifiable human identity, and therefore discards anonymity from the start.
Principles First
The goal of this design is a currency that:
- Promotes justice and equality — by treating all participants equally rather than favoring founders or those who are already wealthy
- Uses minimal energy — rather than requiring expensive and ongoing proof-of-work
- Encourages economic activity — rather than rewarding buying and holding
- Is stable and reliable — not subject to uncontrolled swings in valuation
| Principle | Desired | BitCoin | Ethereum |
| Justice & Equality | Participants all equal | Reward proportional to hashing power | Reward proportional to stake |
| Energy | Minimal | High Energy | Minimal (proof-of- stake) |
| Encourage Activity | Inflationary | Deflationary | Deflationary |
| Stable | Regulated & Tunable | Unregulated & Fixed | Unregulated & Fixed |
Design: Proof-of-Identity
Proof-of-identity can help with all of these desirable traits.
- Each participant receives an equal increment of currency, at every time step.
- Each participant has an identity verified by an external authority, determined by the currency administrators.
That’s it. That’s the basis of the currency’s operation. It has many implications:
- It relies on verifiable identity, which is normally the province of governments and large institutions.
- These regular increments of currency are uniform supplemental income for all people participating.
- No proof-of-work is required, which reduces the energy needed. Its energy requirements are expected to be similar to Proof-of-Stake currencies.
- Founders and early adopters do not necessarily receive a disproportionate share of initial currency. It could be designed that way, but that would defeat the purpose.
- Inflation can be either a predetermined constant, or adjusted by a central authority based on live policy goals (for grass-roots quantitative easing).
Questions and Parameters
Storage: Immutable or Mutable?
- Immutable (for example blockchain): Decentralized, redundant, and minimal trust, aside from the identity authority
- Mutable (for example a traditional database): Faster but vulnerable to loss & attacks
Income / Inflation: Fixed or dynamic? It can be:
- Fixed: Income and inflation are a predetermined portion of the total monetary supply or a fixed quantity per participant — a rate built into the currency’s code
- Set dynamically as a fiscal policy — which would require a second authority, in addition to identity. A policy authority.
Identity: Can be a single external authority or one determined by a democratic process involving all registered participants.
Voting
It quickly becomes apparent that this is not just a currency, but has the potential for making decisions democratically. That will have to be a future subject.