What is the democratic.money project?

And what the hell is a “virtual currency”?

So what exactly is the specific, actual, concrete web application that is going to run at http://democratic.money ?

It will be a centralized game server. And what is the game?

The game is a simulation of Democratic Money. More specifically, of a Democratic Income, which, in turn, is an implementation strategy of the Universal Basic Income ideal. (Yep, it is political! AKA “revolutionary.”)

Democratic Money, Democratic Income and Universal Basic Income

What is Democratic Money? Well, that label, that concept has already been used elsewhere (or so Google tells me). I use it to mean a very specific thing: it is a monetary system in which a quantity of money M, after it is created (injected into the system), is immediately distributed directly to all existing (known, reachable) persons P, such that every person receives a deposit of (M/P) units of money. It is illegal — a violation of the system’s contract — to issue money in any fashion other than an absolutely equal one.

What is a Democratic Income? It is a generalization of Basic Income. It means that all existing (known, reachable) people are regularly, constantly and unconditionally paid the same sum of money. A Democratic monetary system, therefore enacts, supplies a Democratic Income if it creates money regularly.

It is possible for a Democratic Monetary System to exist without regular, Democratic Income payments. That is more or less what is proposed by Positive Money. A Democratic Money by itself merely implements Quantitative Easing for the People, as any time there is an inflation of the monetary supply, that inflation must be distributed to all (instead of being handed out to a private banking cartel, which is essentially what the current debt-based monetary systems do).

Basic Income is a “real world,” “real economics” endeavor, wherein a machinery of political economy such as that of a country has its economists measure what is a “basic amount” that people in general need to survive over some specific area of the planet. Currently, the Basic Income movement has two main fronts of struggle:

  • The political struggle within the global framework of states: to convince the debt-based, scarcity-based monetary systems of our states that their so-called “budgets” are sufficient to cover for people’s basics, and
  • The cultural struggle: to have each nation’s culture come to an agreement about what “basic amount” of the nation’s specific state currency people should be unconditionally and regularly paid, if any.

A Democratic Income is a much simpler affair, both within the existing, dominant framework of debt and within the new framework of Democratic Monetary Systems we propose. A Democratic Income can start at $1/month for all, and even the most strict “budget” of a debt-based monetary system can afford that.

The concept of a Democratic Income reveals that the Basic Income movement is mostly struggling against culture. It is struggling against the effects, the toxic, “capitalist” culture generated by people living under a debt-based monetary system, and not by the “budget” mechanics and other aspects of the debt-based monetary system itself. The US, for example, could pay a Basic Income of $12,000/year to all of its citizens, out of its existing “budget,” with near-zero practical difficulty, if there were any significant amount of cultural and political will to do so. Here is the math.

In a Democratic Income system, the measurement, the discussion of whether a proposed amount is less or more than “basic,” whether it is too much or too little, is supplied by an external system. Whoever controls a Democratic Monetary System (i.e. a democratic currency) merely decides that it will create money regularly (e.g., every month, or every day) and, before a regular payment is issued, they have the chance to change it and try out a new amount.

Instead of endlessly debating about what a “basic” amount is, and hyper-ventilating about the possibilities of:

  • Paying “too little” and just “throwing money away” at people, without having them e.g. “work more” to “make the economy stronger”, or
  • Paying “too much” and just “spoiling people,” or “erasing the meritocracy,” or “punishing the successful people.”

… a Democratic Income system realizes that what we need to do is experiment in the “live system.” Basic Income “pilots” are indistinguishable from Basic Income “real payments.” We do not need to “pilot” Basic Income. We just need to implement it with a random amount, and then use our existing political processes to let people decide, directly or indirectly, whether the amount is to be lowered or raised, quickly or slowly.

Coupled with real Direct Democracy, a Democratic Income system is completely automatic. Citizens use on-line, official (government-backed) Direct Democracy platforms to control whether the government should raise or lower its budget for the next monthly, national Democratic Income payment. What the citizens decide is a government decision, and it has to happen. No discussion. No need to turn on the TV to see if “representatives” are obeying the will of the public or not. And, perhaps more to the point, no more “Basic Income pilots” needed ever again to discover “the right amount.” We are all adults and we can figure it out by ourselves, thank you!

Instead of wasting two more decades trying to convince a global society careening into Fascism of “magic specific amounts” of regular money payments to all in costly, draining referendums on each and every state of the world, we should just immediately start a Democratic Income on every monetary economy, and just set the default payment amount at $1/month. Fund and develop the technology, the legal frameworks, and execute it. For real, right now, in all existing “official” states and “real” currencies. If we had done that in the 1970’s, perhaps by now we would not have Trumps rising all over the world, and each national society, each culture would discover their own limits of unconditional solidarity, trust and love as expressed through the gift the “economic” social-organizational game of “money.”

Okay, but what about the democratic.income game server?

Sorry, that was long! But I assume the underlying concepts, the underlying philosophy of the project is fully laid out now. So it will be easier to explain the little thing I’m doing to further the agendas of Democratic Money and Democratic Income, since I am no government.

As I explained in the previous article, we can probably implement a real currency, a real, secure, effective form of Democratic Money if we build a decentralized system to identify people and pay them. The difference between a “virtual money,” a “game” a “simulation” of money and a “real form of money” is twofold:

  • Whether the monetary game is resistant to attempts to shut it down (i.e. a Denial-of-Service, the service is literally denied because the system is physically destroyed);
  • Whether the monetary game is cheat-resistant (i.e. whether one or more parties can break the game’s rules — AKA it’s contract).

Both the US Dollar and Bitcoin, as examples, are “real” forms of money because both are resistant to shutdown and cheating. The US Dollar can be stopped from operating if you e.g. invade the United States and depose the government, and Bitcoin can be stopped if you can somehow manage to locate and destroy every copy of the existing Bitcoin network “main-net” ledger. The US Dollar can be cheated if you can beat all the conterfeiting-resistance of the system, and Bitcoin’s current contract (a simple one of fixed supply that imitates a supply of a certain type of trade-able physical matter available to earthlings) can only be cheated if you break Elliptic Curve Cryptography.

Similarly, I argued in the above linked article that if we can operate a (socially) decentralized system of identification and payment, that we can achieve a Democratic Monetary System that features sufficient resistance to shutdown and cheating.

And that is the ultimate, long-term goal of the democratic.money project. To develop the technology, and a network of human organizations, that can operate a real democratic currency: a currency capable of paying an actual, “real world” Democratic Income to all real persons on Earth. And when such a currency system is replicated everywhere by other networks and organizations, similarly to how the original Bitcoin currency exploded in a thousand different currencies using the same Bitcoin codebase, then perhaps we will be able to provide a “Basic” amount of money to all persons, every day, for as long as we want to keep organizing through the use of money.

You said you were going to explain the currency I will actually be able to play with soon… and why that currency is “not real.”

Sorry! Now I can finally get to it.

The democratic.money domain will run a web application that is a “virtual currency.” It is virtual, and not “real,” precisely because it is centralized. It is trivial to shut the server down, and it is trivial for me as the game operator to cheat the game. I won’t cheat, but you can’t know that, so you cannot treat that currency as a “real currency.” That would be bad for both you and me, and I think you can understand why.

Other than the risks of cheating and of shutdown of a “simulated” or “virtual” currency, a simulation of a currency has zero technical difference to a real currency. It is a “simulation” in a social sense, not a technical one. You could argue that a single server cannot provide a global currency, but with 2017 technology that is simply not true. Facebook is a centralized service, and they provide something much more complex, much more data-intensive than a glorified integer counter, to 2 billion people. The software that I have already written can service a million people out of a $5/month cloud server.

So, by running this “simulation,” I can further the project in the following ways (off the top of my head — there are probably more reasons still):

  • I will be able to develop and pilot one or several solutions to the identification problem. To pay a Democratic Income, you have to know which people exist, and you have to avoid paying an income to fake personal profiles;
  • I will be able to develop the concept and the message; I will allow others to see what I see, to experience what a democratic monetary system would feel like;
  • I hope it will advance discussions and general insight into the stupidity of debt-based, scarcity-based monetary economics;
  • I hope it will help people experience what a Basic Income would feel like. The metaphor of a monetary sum being credited unconditionally to you, as a “player” of a “simulated currency,” is something that I suspect will be a powerful psychological experience. I expect many players of this “game” will have “aha!” moments;
  • I hope it will be useful for other projects as a reusable hashcash token;
  • I hope it will spawn at least a few satellite games and other kinds of experiments that use the server as their provider of “in-app currency”;
  • And last, but not least, I will pilot the concept of Democratic Income plus Demurrage (negative interest) in a Democratic Monetary System: as the Democratic Income constantly inflates the money supply, the demurrage mechanism deflates it perfectly, seamlessly, democratically, thus achieving a constant money supply (for a given number of fixed users) and therefore, the culturally-treasured “price stability” property.

By realizing the project as a centralized “simulation” of a democratic currency, and if everything works out fine in Phase I, I will then be able to properly set the stage for Phase II, where I will “simply” decentralize the service, and therefore turn it into a “real currency” technology that can be replicated and applied by all organizations, societies, tribes and nations that decide to use it. Phase I should pilot and solve all problems of the project with the exception of the technical problem of service decentralization which, by itself, is a lot of work and has to be done separately.

I hope you will soon join me in having a blast with being able to play with a democratic currency paying a democratic income!

Now let me get back to the code…