Whenever the topic of Universal Basic Income is breached in conversation, the number one question that gets asked by skeptics is “muh free money, how will we pay for it?”. It is a valid problem but one that is easily solvable with current technology and infrastructure.

My theory of a Global Universal Basic Income originates from time before I even knew that UBI was a concept. I never thought of a UBI as money, but rather as an income of resources, specifically food. I, as a cyberneticist, imagined a world where a basic goods such as food was automated out of the market system entirely via 0 marginal cost production. A decentralized automated garden system was my first conceptualization of a universal basic income and it remained, in my opinion, the most viable solution to absolute poverty for many years, including for several years after learning about proper UBI schemes.

It was only until after I discovered Andrew Yang that I began to give credence to the idea of a monetary UBI as opposed to a resource UBI (of 0 marginal cost food). Yang’s solution to the funding problem is a value added tax and while this idea is OK, I think we can come up with something much better.

In honor of the man who turned me towards thinking about the viability of a financial UBI, I now present the white paper for a UBI cryptocurrency: YangCoin.

YangCoin is a hypothetical crypto currency of constant positive inflation. For every YangCoin that is mined, a percentage of that coin is distributed among a constant number of YangCoin wallets that will have always existed since the origin of the YangCoin network. In all cryptocurrency schemes I know of, users can create wallets on demand. In YangCoin, where every wallet is constantly receiving money, currency scarcity is maintained by enforcing that every citizen only has 1 wallet. Ideally, a 1 to 1 relationship between citizen and wallet would be implemented by converting an iris or fingerprint scan into a private key that can be used to sign transactions. Practically, this is an nonviable solution in the short term for obvious reasons. More realistically, state governments would provide each citizen with a wallet at the age of 18 through some secure and authenticated key exchange that ensures that every citizen only receives 1 wallet.

Like previously mentioned: for every block mined, a little bit of Yangcoin is deposited into every wallet in existence. If a fixed number of wallets exist at the creation of the Yangcoin (say ~100 billion to account for possible population explosions), then inflation and relative buying power of citizens will be extraordinarily predictable.

#coins_generated/wallet/block * #wallets

+ miner_reward_generated/block

= inflation/block

One of the major problems with inflation is the unpredictability of prices. In most hyperinflation situations, the inflation rate is not just high, but is actually increasing wildly. This means that merchants do not know how to predict future prices. Yangcoin’s inflation is of a different kind. The rate is static, so prices can change linear-ally with respect to time. This predictability means that merchants will know how to price goods. They could even construct a meta-price that is inflation adjusted, because they will know that exact rate of inflation at all times. Current inflation statistics have a collection time lag due to their changing nature, but Yangcoin inflation statistics will be known instantaneously. This provides stability for an economy running on the currency.

The second problem with inflation is that it increases money velocity. A Yangcoin saved now will be worth less in the future, so there is less incentive to save it. Many economists actually value positive inflation because of this effect; a deflationary currency incentivizes hoarding (see bitcoin speculation and “hodl”).

Fundamentally, a Yangcoin UBI would be backed by real value (not just value extraction via taxes). The value that Yangcoin is backed by is the value of the miner network. A computational hashing network is close to 0 marginal cost per hash given a relative abundance of solar panels. For this reason, it seems that Yangcoin is better suited to distributing a sustainable UBI than even an automated food production based UBI would be.