Is Crypto the Missing Ingredient for Universal Basic Income?
Is Crypto the Missing Ingredient for Universal Basic Income?
Over the past few decades, a growing suite of technologies and advances in artificial intelligence (AI) has given rise to a significant trend toward automation in almost every industry imaginable. Depending on who you ask, though, that trend is either going to lead to a future filled with leisure and comfort, or one where 40% of today’s workforce finds themselves displaced and unable to find work. Like most complex subjects, though, the truth is probably somewhere in between the two extremes.
While it is undoubtedly true that automation will introduce efficiencies that lower the prices of consumer goods and the daily necessities of life, there are also no guarantees that displaced workers will be able to navigate the shift from their current careers into a new one within the revamped high-tech economy. In truth, it’s a virtual certainty that many people won’t be able to make that shift – after all, not everybody has what it takes to be a programmer or to understand the deep complexities of artificial intelligence.
It’s also possible that the expected displacement of workers will be just a preview of what’s to come later, as AI makes further advances and becomes capable of eliminating even more jobs. That possibility has caused endless debate in political and social circles around the world, as decision-makers grapple with finding a solution to the coming jobs apocalypse.
Preparing For Economic Upheaval
For some, the answer is a simple one: provide each and every person with a guaranteed income that they’re free to spend in any way they wish. It’s a concept known as universal basic income (UBI), and it’s already being tested in various places around the world.
Proponents of the scheme claim that by guaranteeing every person an income that’s sufficient to cover their basic needs, they’ll be free to pursue whatever activities they choose, be it the new world of leisure that automation cheerleaders foresee, a retraining program to reenter the workforce, or something else altogether – like becoming an artist or starting a business of their own.
On the other hand, opponents of UBI insist that it will become little more than a giveaway that encourages people to be wasteful; to live off of the fruits of others’ labor. They claim that the disincentives to work created by UBI mean that it will create a more severe shortage of the kinds of labor that machines still can’t replace, like sanitation workers, police officers, electricians and the like – basically the blue-collar workers not yet under threat of automation.
On top of that, they argue that any UBI scheme will cause a cascade of escalating tax rates on whoever is still participating in the workforce, and as more people flee the higher taxes, the pressure to raise them more to maintain benefit levels will grow exponentially.
A Solution Hiding in Plain Sight
It’s easy to understand, and agree with, both sides of the UBI debate. It makes sense that providing an income stream for displaced workers would alleviate some of the problems created by automation. It also makes sense that it’s going to be challenging to create a revenue stream large and stable enough to pay for it without damaging the broader underlying economy. What if, however, there was a way to create a UBI scheme that didn’t require taxation or a government-provided revenue stream?
As it turns out, the broader technological revolution that’s been underway for the past few decades may have created a solution: data. If you look at today’s most successful businesses, like Google, Amazon, and Facebook, you’ll find that their public-facing product lines and technological innovations aren’t what is fueling their bottom lines. Instead, they’re all making billions of dollars collecting, exploiting, or selling data – vast quantities of it – all harvested from their billions of users worldwide.
If the individuals generating all of that data had some way to maintain control of it and monetize it instead of ceding control of their data to corporate ownership, that would create instant, individual revenue streams that could underwrite a wide-scale implementation of UBI. The only problem is coming up with a system capable of managing such an enormous global flow of information and maintaining secure data rights management without spending more than the scheme itself would yield.
Now it seems there may already be a solution for that, too.
Enter the Blockchain
While the cryptocurrency craze that spread throughout the world in recent years has abated, the technology that made it all possible is still developing and being adapted for countless other uses. That technology, known as the blockchain, is an encrypted, decentralized digital ledger system capable of storing data of all kinds and authenticating access and changes to that data at an enormous scale. It’s exactly the kind of thing you’d need to manage a secure global data marketplace to create the type of UBI system mentioned above.
There is one critical flaw in most blockchain implementations that prevent it from being used for an application as sprawling as managing all user-created data on the internet in real time – transaction speed and cost. Since the beginnings of Bitcoin, most blockchain solutions have struggled to scale up, experiencing huge transaction processing backlogs that drove up the fees associated with processing those transactions. That happened because the original versions of blockchain required every single transaction to go through a distributed validation process, which requires massive computing power and time.
Scaling up the Blockchain
To deal with that problem, various refinements to the original blockchain have been proposed, such as the lightning network, which functions as a peer-to-peer side channel that helps keep transactions between parties off of the leading network until it’s time to reconcile the users’ accounts. That kind of setup does help, but not enough to operate a global data marketplace that would demand constant high-volume micro-transactions that may involve hundreds of thousands of parties at once.
Another potential solution to blockchain’s scaling problem is the use of sharding, which, as the name suggests, involves splitting up the stored data into much smaller pieces so that no single node has to maintain a complete copy of the blockchain. The current implementations of this technique, however, still require that every node preserves a record of completed transactions, limiting the total possible transaction throughput.
A Solution Made for UBI
Now, however, there appears to be a blockchain implementation that’s tailor-made for uses as a global UBI system. The system, known as Harmony, takes sharding one step further – allowing just the nodes with the appropriate shards of data to handle each transaction, rather than involving the whole network. The process, which they’ve named “Deep Sharding”, would allow their blockchain network to conduct multiple simultaneous transactions without any bottleneck. With such a system, the only limitation on throughput would be network speed and the number of participating nodes.
In the case of a global data marketplace that would fund a true UBI program, every participant could theoretically operate a node to lower the overall transaction cost. Doing so would make it possible to operate a data marketplace that was efficient enough to process the transaction volume needed while leaving enough profit left over for the participants to draw a stable income – and all of it without raising taxes on anyone.
The Way Forward
Now that the technology needed to create a global UBI system that allows every individual to reap the profits generated by their own data exists, the only remaining hurdle is to construct a legal framework that guarantees each individual ownership of their own data. It’s a change that won’t happen quickly since it’s that same data that feeds the bottom lines of today’s biggest companies, but it’s one that makes perfect sense.
There’s already been a movement toward the rights of individuals to control their own data. The recent General Data Protection Regulation (GDPR) passed by the European Union already contains provisions that have begun a shift towards personal ownership and control of data. Right now, that means that European citizens can exercise control over how and when their data is collected and used, but they still lack the means to monetize the process.
As time goes on, there’s a good chance that the GDPR will have a ripple effect in the rest of the world, accelerating the pace of legislation meant to put individuals in control of what should, by all accounts, be their private property. Once that happens, and indeed if the political will exists to go a little further – granting complete and unassailable ownership of data to the individuals that generate it – it’s easy to foresee a day when the technology that kicked off the crypto craze will serve as the medium through which real, universal basic income may be achieved. When that day comes, the whole of humanity will be able to embrace the AI and automation revolution, free from economic insecurity and ready to go forward into a future where everyone has a share of the profits they so rightfully deserve.
The post Is Crypto the Missing Ingredient for Universal Basic Income? appeared first on ReadWrite.