The wait has finally come to an end with Circles UBI launched in the marketplace. It is an ambitious crypto project which enables to earn a blockchain universal income. The project is based on the Ethereum blockchain. The basic concept behind universal basic income is that users receive a regular, unconditional income irrespective of their background. Initiator Martin Koppelmann said in a tweet that it took seven years for the idea to be instituted. He called universal basic income on the blockchain- or just "better money" went live today!
Other UBI projects in the market
UBI and blockchain may seem an unusual concept but it is not new to the cryptoworld. UBI has attracted renewed interest this year. eToro officially announced Gooddollars in 2018 as corporate social responsibility (CSR) initiative to deliver basic income on blockchain. GoodDollar aims to reduce global wealth inequality through blockchain technology and universal basic income (UBI) principles GoodDollar is a global basic income coin (G$) and reserve-based token. Another initiative Project Greshm is a government-independent basic income system that use Greshm (XGD) currency. Main feature of Greshm is the term of maturity period. XGD matures into USD from the reserves after a time period of 30 days.
Project that did not have the same fate
Similar project based on UBI like Project UBU recently saw instability and moved towards liquidation. The project was entirely funded through the sale of ERC-20 Ethereum tokens, an entire Initial Coin Offering (ICO) process which was managed by the SovTech team. Unfortunately, the concept could not survive pertaining to the current economic climate and will undergo an orderly liquidation anytime soon.
What is Circles?
Circles is a voluntary basic income scheme without the need of a state. It will require at least three others to validate your identity. It is a money system based on individualized cryptocurrencies and mutual factor of trust within these currencies. It aims at distributing money in a way that will lead towards equalization of wealth and function like a globally accessible Universal Basic Income. It is one of its kind unique project aims to create a financial application easily provided to anyone on the internet. The system will introduce an annual inflation schedule. Tokens will be issued at a consistent rate and paid out per second.
The UBI model
To earn, some money has to be invested. The UBI model is sustained by supporters who deposit underlying assets onto the platform and then on supported decentralized finance (DeFi) protocols.
How it works?
When a new user joins Circles, it acts as a node. A new cryptocurrency is created via a smart contract. The currency assigned will be individual to them. Each personal currency continuously mints new coins and rewards are distributed. The amount of coins minting is inflating every year. This is the only way money is generated in Circles and forms the basis of its UBI approach. One of the other features provided by Circles is the rate of minting. All currencies in Circles mint new coins at the same rate and new money is distributed equally to all members in the system at all times.
Rate of inflation
Right now, circles are paid out at a rate of about 14 per week, inflating 7% per year. This is to ensure consequence of newly minted currency in comparison to already existing currency.
How trust works in Circles?
Trust is important to create useful money. It facilitates exchange in the system. When a user trusts a currency, they tell the system that it is equivalent to any other Circles currencies that they already have. This means that anyone with this trusted currency can automatically trade it for one of your Circles currencies at a one-to-one exchange rate. Explaining trust, for money to work, it has to be both personal and impersonal. If I want to exchange my circles to buy bread at the local bakery but I don't know the baker, I could potentially still spend circles with her -through- my friends who do. Hence the importance of trust!
A unique system to prevent Sybil attack
Every platform faces the problem of fake accounts and Sybil attack. Circles has developed its own built-in resistance to face accounts. The approach is based upon a decentralized solution. This allows a user to sign-up on the platform without seeking permission from anyone. Circles Money System is designed with a view to implement affordable blockchain technology as a key catalyst that makes a UBI achievable.
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