Creating a UBI (Universal Basic Income) system using Blockchain — Part 1

“Wiping every tear from every eye” — Mahatma Gandhi

UBI, or Universal Basic Income, has always been a hotly debated topic. UBI could have quite a few benefits that could bring about more social equality and a more even distribution of wealth. Great thinkers such as Thomas Paine called for something known as the “Citizens dividend” which is UBI that would be paid from tax taken from landowners. The great economist Milton Friedman endorsed Basic income since 1962. Dr. Martin Luther King Jr called for a basic income in his book “Where do we go from here”. All UBI trials done till now have been done with government backing or by charities or as a trial with a private institute. I will not go into details of the history of this concept, as there is great literature on the same available on the internet. The objective of this article is to highlight the possibility of creating an UBI system on a decentralized platform.

UBI seems to be gaining more and more mainsteam attention.

Bitcoin was introduced as “peer to peer electronic cash” in 2009. Bitcoin brilliantly solved the double spend problem existing with transacting on the internet, and enabled people to trade a financial asset entirely peer to peer without any central authority (read “central bank”) confirming the transaction. Due to the limited supply of Bitcoin, the proof of work model that enables you to earn Bitcoin, the fungibility and divisibility of Bitcoin, it is fast becoming a store of value as well as a unit of currency.

Cryptocurrencies could change the way we think about “money” and “value”.

For a UBI system, the problem to solve is not that of removing the middleman, but of creating enough value such that it can be distributed evenly to all. Decentralizaton helps since even distribution can be ensured, value can be created through the nature of cryptocurrency.

On another note, tech — especially software, seems to flow from the top down; there are a privileged few who use those products initially before it finds it’s way to the not so privileged.

Understandably most large companies are formed this way as it’s potentially easier to sell something for $100 to someone who can pay for it, rather than sell something that’s $1 to a 100 people. UBI, especially when pegged to a Blockchain asset, can potentially disrupt this trend because it is by definition available to everyone equally.

The creation of money through the seigniorage reform is disrupted by mining on a Blockchain, and the distribution of money can now be disrupted through id management on Blockchain + distribution of cryptocurrency through fast payment mechanisms such as lightning network. Printing of new money cannot be changed on a Blockchain, but a part of the newly printed money can be used to make UBI payments through an upgrade to an existing Blockchain protocol. This would also be positive to miners as more people use cryptocurrency and this could increase value or at the least keep the same price.

The growth of decentralized currencies, with the right governance and incentives in place, could create a completely trustless way to create and distribute money evenly to people around the world.

The rapid advancement in decentralized technologies along the verticals of governance, consensus mechanisms, data and transaction privacy, storage, computing, data transfer gives the ability for the economic model for an UBI to be translated into computer code that cannot be controlled by a single party or a group of parties. The economic model is evolving fast, but so is the technology. There needs to be a way for both to upgrade simultaneously without breaking the trust in the UBI currency.

For trustless, decentralized, uniform distribution of value among everybody, on a network that cannot be disrupted or changed, we are considering using the Tezos Blockchain protocol to enable this. More about this in part 2 of the article and on

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