What is universal basic income—and what do cryptocurrencies have to do with it?

What is universal basic income?

Universal basic income (UBI) is a guaranteed minimum payment to every member of society, regardless of an individual’s social standing or status.

This is what distinguishes it from other social benefits: funds are distributed to all groups without exception and without reference to a citizen’s wealth.

Scholars typically trace the first mention of the social concept of guaranteed income to the English humanist philosopher Thomas More’s Utopia (1516). In the late 18th century Thomas Paine—one of America’s founding fathers—proposed revisiting the idea.

How could the idea be implemented?

Advocates of broad UBI adoption say guaranteed payments would free people to realise their creative potential. Instead of constantly seeking the means to survive, people could spend time creating intangible value, improving their own lives and developing society as a whole.

Potential sources of funding include higher taxes, reallocating money from other social programmes such as unemployment benefits, and introducing environmental and land levies. Supporters also propose cutting the cost of maintaining the bureaucracy, and advancing automation and artificial-intelligence technologies.

The main obstacle is implementation. Fair distribution, record-keeping, analysis and adjustment would require an expensive system of interaction among all participants and components. Large financial costs would also accompany any large-scale rollout of UBI.

Is there interest in universal basic income?

Debate around the concept has drawn in not only economists, philosophers and commentators but also major political figures and venture firms. In 2016 US president Barack Obama suggested that advances in AI in the coming years would raise UBI’s popularity.

Andrew Yang, a candidate in the 2020 US presidential election, made universal basic income the centrepiece of his campaign. He also founded the Humanity Forward fund, which received $5m from Block chief Jack Dorsey.

In 2016 the Y Combinator business incubator, then led by Sam Altman, cofounder of OpenAI and Worldcoin, launched a UBI pilot in Uganda. One hundred families took part.

The topic became especially salient during the coronavirus pandemic. Governments worldwide had to support citizens with special payments. The execution of these programmes exposed a number of inefficiencies, including corruption, financial costs, inflation and misuse of funds.

In theory, universal basic income could eliminate all these problems, as well as remove the need for additional cash payments to the population.