How does inflation work in the Circles system?

Inflation is everywhere and always a process of redistribution. In the current money system, which is based on debt, the creditor classes accumulate the debts of those who owe them money: the debtor classes. As prices for different goods increase, wages remain the same. Therefore, inflation currently benefits those who have the power to issue debt (like the banks).

Circles is a unique type of basic income because it’s not necessarily for saving. Instead, it creates money from the perspective of the people, and not from the perspective of the banks (or other governing bodies). This means Circles creates money (Circles tokens – CRC) for its community.

 

Circles’ money supply is inflationary, with a fixed 7% yearly increase in the supply of CRC. In the first year of the system, you receive 8 CRC every 24h. After a year, you will receive 8 CRC x 7% or 8.56 CRC every 24h.

 

If you join Circles early on, the relative difference between your CRC balance and those who join later will decrease relative to each other over time, while the absolute numbers remain the same. Therefore, the inflationary aspects of CRC are there to ensure that, over time, there is a convergence between those who have less and those who have more CRC.

 

In other words, at Circles, no one is left behind.

 

The goal of this is to increase the velocity of spending, so that you and your network are motivated to spend and redeem CRC for things of value, instead of sitting on them. This supports a flowing, vital economic system instead of a stagnant one. That’s why it’s called Circles. It’s built for circulating. Just like a healthy body needs healthy blood circulation.