Universal basic income (UBI) has become a hot topic in recent years, with many viewing it as a potential solution to automation-driven job losses, rising inequality, and economic precarity. The core premise is that all citizens receive regular, livable cash payments to cover basic needs – no strings attached.
Advocates argue UBI promotes freedom, dignity, and entrepreneurship by providing a safety net. Critics counter that it could decrease work incentives and prove fiscally ruinous. Pilot studies have been highly limited in scope so far.
But in our rapidly advancing digital economy, could cryptocurrency and blockchain technology enable a truly functional, decentralized universal basic income? That is the ambitious vision behind Good Dollar.
The Elusive Dream of Universal Basic Income
On the surface, universal basic income seems simple – just give people money. Yet developing a sustainable model has proven incredibly complex.
The idea dates back centuries. Thomas Paine proposed a "national fund" to pay all citizens a lump sum at age 21 in 1797. Bertrand Russell, Martin Luther King Jr., Milton Friedman, and 1200 economists endorsed versions of UBI in the 1900s.
But beyond limited experiments, no government has implemented a long-term nationwide UBI. Challenges abound:
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Cost: Providing a $1,000 monthly UBI to all 328 million Americans would cost nearly $4 trillion per year – over 90% of the entire federal budget. Tax increases required may paradoxically decrease economic output.
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Incentives: Some critics argue UBI could discourage work, reducing economic productivity and tax revenues further. However, studies on work incentives are mixed thus far.
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Transition: Eliminating all current welfare programs to fund UBI would be extremely disruptive. But not eliminating them makes UBI far less affordable. Hybrid approaches may be required.
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Inflation: If people have more buying power, prices could theoretically increase across the board, eroding the value of UBI payments. However, many economists dispute that UBI would significantly affect inflation.
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Political Support: A massive new public program requiring substantial tax hikes faces major hurdles gaining support from politicians and higher income citizens.
Despite these challenges, small-scale UBI pilot studies continue across the world:
- Canada experimented with a basic income program for 4,000 low-income participants from 2017-2018.
- The nonprofit GiveDirectly has run basic income trials in Kenya using mobile money transfers.
- The city of Compton, California recently launched a 2-year UBI program to give 800 low-income residents $600 monthly payments.
Initial results are mixed, but limited in scope and duration. A true nationwide UBI remains elusive.
Enter Good Dollar – UBI on the Blockchain
In 2019, an ambitious new contender arrived aiming to harness blockchain technology to power a global, decentralized universal basic income cryptocurrency.
Good Dollar is the brainchild of eToro, an Israel-based social trading and multi-asset brokerage company. It launched as a non-profit initiative separate from eToro‘s commercial enterprise.
The mission of Good Dollar is to "empower society by giving economic power back to the people." Its core innovation is distributing a digital currency called Good Dollars (G$) as basic income for participants worldwide.
Here‘s how it aims to work:
- Anyone can download the Good Dollar app and receive a digital wallet to start claiming a basic income in G$.
- The initial supply of Good Dollars comes from "supporters" who donate other cryptocurrency assets into a community pool called the Good Reserve.
- These reserve assets generate yield through interest-bearing protocols, like lending, which help grow the reserves over time.
- Software algorithms mint new Good Dollars proportional to the size of reserves and number of recipients. This maintains a target reserve ratio.
- By design, new Good Dollars are minted and distributed evenly to all individual wallets that make daily claims.
- Users can spend G$ peer-to-peer, save, donate, or exchange into fiat currency or crypto. The goal is to create a circular economy.
On paper, it‘s a creative approach to leveraging decentralized finance and Web3 infrastructure to provide a self-funding, perpetually runing digital UBI. But does reality match the vision yet?
Analyzing Good Dollar‘s Traction and Value Generation
Good Dollar deserves praise for its bold experiment to apply blockchain technology to a grand socioeconomic vision like universal basic income. However, current adoption and usage data reveals a project still struggling to gain traction.
Some key statistics on the Good Dollar economy today:
| Metric | Value |
|---|---|
| Total G$ Supply | 66 million |
| Market Capitalization | No reliable price data (not on major exchanges) |
| Monthly Active Users | Unknown public data |
| Registered Users | ~223,000 via app |
| Average Daily Income | < $0.01 per person |
| Merchant Acceptance | Extremely limited |
Comparing this to leading cryptocurrencies underscores Good Dollar‘s minimal real-world usage:
| Currency | Users | Market Cap |
|---|---|---|
| Bitcoin | 120 million | $700 billion |
| Ethereum | 20 million | $250 billion |
| Good Dollar | 223,000 | No data |
For context, even obscure meme coin Dogecoin has a market cap of $9 billion and processes $10 million of transactions daily.
Good Dollar‘s benefits currently equate to little more than pocket change for most users. The network would need to scale 100,000x to provide a livable income comparable to UBI proposals of $1,000 per month.
Without fundamental growth, it functions more akin to a loyalty points program than monetary system transforming society. This is not surprising given blockchain‘s notorious challenges achieving mass adoption.
Barriers to Mainstream Traction
Creating a new global digital currency from scratch and overhauling economic distribution is obviously an enormously difficult undertaking.
Based on my decade of experience in cryptocurrency, I see three primary obstacles currently facing Good Dollar:
1. Lack of funding and reserves
To mint meaningful quantities of G$ requires massive collateral backing it. But philanthropic contributions to the Good Reserve have not gained much momentum. For context, the entire supply of G$ was valued around $250,000 as of late 2021 – a small fraction of leading crypto projects.
2. Minimal exchange integration
Without listings on major exchanges like Binance and Coinbase, Good Dollar lacks critical infrastructure for tradability and price discovery. This inhibits its circulation and utility.
3. Missing ecosystem
Users need places to spend G$ on goods, services, apps, and experiences. But few merchants currently accept it, limiting incentives to earn and hold. This results in a supply glut and free riders over engaged communities.
Solutions to these challenges exist but require substantial time and resources to execute. For instance:
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Recruit high-net-worth crypto donors to expand reserves 100x or more. Make contributing compelling and impactful.
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Get listed on top exchanges to trade G$ and establish real market value. This will likely require major volume, adoption, and promotional efforts first.
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Build partnerships with charities, gaming platforms, social networks, major retailers and more to integrate Good Dollar payments.
Without leveling up substantially across these areas, Good Dollar appears likely to fail or stagnate. But it remains an ambitious and thoughtful experiment advancing the dialogue.
An Audacious Moonshot, but Current Reality Underwhelming
Good Dollar deserves praise for its bold attempt to apply cryptocurrency design to universal basic income. This visionary thinking pushes boundaries on how technology could transform society.
However, based on its minimal traction and utility so far, Good Dollar has yet to demonstrate evidence it can viably deliver a functional, livable digital UBI. The gap between its grand ambitions and current reality remains enormous.
Still, it offers an intriguing proof-of-concept and continues evolving. With vastly increased funding, adoption and integration, perhaps its model could someday lead to more widespread automated welfare systems. But much foundational work remains.
For now, approach Good Dollar with tempered expectations and a healthy skepticism of hype. But pay attention to where its experimental road leads in coming years. This service could offer society valuable lessons at the intersection of blockchains and UBI – even if its success appears a distant moonshot today.