Employing double spending to eradictate poverty forever
Until now, we’ve been considering double spending as a problem rather than a potential solution to something.
Before moving on, I’d like to write a short note on what double spending is for ones who’ve never heard of it.
Double spending
Double spending is a problem which is unique with digital currencies that occurs when a person X transfers $100 to Y yet X has the same copy of $100 in his bank account.
This occurs when X somehow reverses the transaction leaving a token or uses a token or a replica for $100 itself to make the transaction.
This is the case which especially occurs with digital currencies like Bitcoin and Ethereum as digital info or data can be easily replicated unlike physical currencies.
Well, this problem have been solved using Blockchain technology which is basically a distributed ledger timestamping all the ongoing transactions and uses hash functions to make the transactions secure.
Now, we are going to resurface that problem except for a good cause.
Poverty and charity
As we all know, poverty is basically lack of money or consistent basic income in some form. Eventhough people living in poverty lack other basic necessities like sanitation and food, money is the underlying root cause for poverty.
Here are the top reasons why people aren’t donating much to the charities. This is a survey done by Wikipedia on their non-profit organization Wikimedia.
One can see that the major reason why people aren’t donating much is due to the fact that they don’t have enough money to afford a donation.
Considering this as a fact, we’re going to arrive at a solution for this problem.
Double spending in a controlled environment
We have double spending on one hand and poverty on the other. Ring any bells?!
The solution which I’m suggesting is going to be a platform where double spending is made to occur in a controlled environment where people can come and exchange their money into tokens of same value.
For example, a platform where I can go and exchange my $100 with an equivalent token worth the same value. Let’s call it 100 Arcs maybe.
Let’s call our currency the Arc.
The organization/entity which makes this possible is basically going to identify and utilize the collected $100 inorder to help people and eventually lift people out of poverty.
As simple as that! That’s the main goal here.
What it takes to create a new currency?
Just our collective consideration.
What gives value to USD, EURO, YUAN or RUPEES?
It’s just people’s consideration that it has some value which makes trade possible all over the world.
At the end of 2016, India announced that it’s 500 and 1000 Rupee currency notes aren’t worth anything inorder to fight dark market trading and black money — Demonetisation.
Until that point, it was people’s consideration that gave value to it and from that point people stopped trading those denominations as they considered them having a zero value.
Reiterating, it is people’s collective consideration all over the history, time and place that make currencies worth the value that it possess.
This way a genuine entity, in this case not the government but a startup can create a currency.
Implementation
So, we have now created a currency and it’s worth something which in this case, $1=1Arc.
At first, no single person is going to come and exchange their dollars for Arcs which they can’t trade with anywhere. Well, why should they?
But I suppose, those who are already donating charity to the poor can be bypassed using this platform. If that’s not going to be possible, we have a better way which we’ll explore below.
Creating a community or a marketplace with buyers and sellers where people can trade only using Arcs is one way where people can come and exchange their dollars yet they can buy goods for the same value that they brought in.
This way people who can’t afford to make a donation can actually make a donation and benefit out of it.
And we can pull huge influx of donation amount to charity yet both sides win, motivating people to donate more, buy more again, again and again which ultimately leads to lifting people out of poverty faster and easier instead of expecting government policies and reforms.
Managing the funds that the entity received is a whole another chapter.
Practical difficulties and ways to overcome it
There are two problems with respect to this model.
- Increase in inflation rate
- Double spending problem
- Government regulations
Increase in Inflation rate
On a large scale, this is going to increase the Inflation rate. That’s obvious!
Inflation at a basic level, occurs when more money is chasing over the same number of goods.
In our case, basically money is being doubled each time a person initiates an exchange.
So, what to do about it?
For example, if person X has $100 and he’s willing to buy a product Z worth $100, then he can buy it at $100 without any competition from other buyers.
If person X has $100 and simultaneously other person Y also has $100 who’s competing for the product Z, then obviously selling price of Z is going to increase unless and until, one other Z unit is produced, satisfying both the buyers.
But, what if we employ the charity that we are funding to do basic works to come up with basic goods and products like homemade soap, chocolates, vegetables or some other stuff such that equivalent number of goods are being produced with respect to money exchanged?
In theory, goods produced which are equivalent to the currency exchanged will nullify the effect of inflation.
Well, in a complete utopian world, it’s possible but hey! On a positive note, it reduces inflation rate to a significant percentage caused by the impact of introducing new money into the economy.
Double spending problem
Again, this is always a problem when it comes to digital currencies.
But voila! You don’t need to reinvent the wheel again as we have this new technology called Blockchain.
One can make use of blockchain in this case to avoid any form of double spending.
Government regulations
Since this is going to be a non-fiat currency, Government would fed up and may stop the operations or even stop from iniating the operations until legalized or systems are put in place to monitor the currency.
Their reason is valid since it’d be against one of the government intented policies like fight against financing terrorism but blockchain by itself is capable of tracking where the funds goes.
Apart from all these difficulties, this concept can only be applied to economies which are developing yet have a significant number of population under poverty.
For example, India, Brazil, Indonesia, Phillipines, Argentina and many others.
Justification for this is developing economies have significant amount of disposable income which can be leveraged to exchange.
The Genesis
We all have the potential in this world to eradicate poverty completely yet we aren’t, since power is focused on hands of very few men who control all the wealth.
But, I really do believe that times are changing for better and this new era is ours. The era of baby-boomers are long gone and it’s us, the millenials to whom the baton has been handed over.
Holding the baton, it’s our responsibility to solve all problems with respect to climate change, unemployment, corruption, energy and in this case, poverty.
The real tragedy of the poor is the poverty of their aspirations — Adam Smith
The whole point of this article was to convey a message that each and every problem that we think is impossible to solve, can be easily solved by collective synergy.
Expecting the government to solve every problem on the planet is next to impossible and it’s nothing but a path to dystopia.
Let’s not give it a chance and start acting inorder to make the next generation thrive and flourish.
I’d summarize this article in one sentence which is,
Take action. It’s our world folks!
I’m really excited on implementing this model yet I’m not sure of all the difficulties and complications which I’d be facing. It’d be great if you can share your insights below whatever it is.
