The Emergence of Circles UBI: Learnings and Lessons
On the 16th of October, something very peculiar happened. That evening a small team of artists, hackers and activists from all over the world gave birth to Circles, a Universal Basic Income (UBI) system on the blockchain: based on trust, powered by communities. What started as an outdoor event for the Berlin community became a planetary fear-of-missing-out (FOMO) race to enter the system.
So what happened?
According to the Basic Income Earth Network (BIEN), a UBI is an amount of money given to all people, without means testing or work requirements. It is meant to be both unconditional and universal. Circles aims to do just that.
Many ethnographies could be written about the history and making of Circles UBI. In this article, we will explore our learnings and lessons post-launch: the critical reality of what it actually takes to build, organize and maintain a decentralized basic income system that people can use. In other posts, we explore more technical aspects of the system, like how to help in funding the relayer, and community organizing-related questions.
October 16th — 5pm:
Beginning of the Circles launch at a community center in the east side of Berlin. We gathered at Moos, a place where many different people representing local Berlin producers, merchants, supermarket cooperatives, cooperatively ran delivery bike fleets and many more came together to celebrate the start of perhaps the first community supported basic income system in the world.
Despite the social distancing due to COVID-19 measurements, the event was a success, making a lot of people understand for the first time how the system works and how it could benefit them: by creating Commercial Credit Circles (CCC) between them and support the local economy.
October 16th — 9pm:
Twitter found out. The flood began. Our servers, located in Iceland, started to melt over the overwhelming amount of requests we started receiving from all corners of the planet. People in Berlin started facing hurdles entering the system, giving and receiving their trust and sending money through the network to buy food and drinks at the local event. One of our computer programmers, who was supposed to make it to the release party, broke down and started crying in front of the computer. Imagine so much responsibility falling on one or two people?
If a basic income is to be created in a decentralized manner, how to make sure there are enough people tending to the code who are themselves supported, caring that people on the other side can access and create their own money smoothly? We must go beyond the idea of decentralization which in the crypto-world is taken to mean nobody can control or change the system, implicitly delegating responsibility to the machines, while real power remains in the hands of those who hold the most tokens, despite their good intentions. For more on decentralization and it’s discontents, check out Sarah Friend’s talk on the matter:
October 17th — 5pm:
Checking late back into the computer. The work of building Circles requires both technical and social work, which we like to value equally, to avoid hierarchies between “tech” and “non-tech” work. The current working team was hoping for a small break after the launch. A lot of us had been working almost non-stop for the past years to make Circles a reality, almost unseen.
Suddenly, our expectations met reality. There were about eight thousand new messages on Telegram chats, e-mails and Twitter, with a lot of amazing people eager to join, sharing their stories of how Circles might help their local economy.
Inside the crypto-world, we had become the FOMO of the moment, with sketchy news articles coming out saying Circles was giving out “free crypto”. And to be fair, in a way, we are doing that, just not the type of crypto you are used to.
One thing that is different about Circles is its monetary design. For starters, the system is not based on creating artificial scarcity via an amount of promissory-tokens to be issued at any given point in time (i.e. 21 million, as is the case with Bitcoin). We say that Circles is a basic income system because money is issued periodically, unconditionally and equally to all users within any given Web of Trust (WoT — more on this later). For the geeks interested, Circles is not based on commodity theories of money: we do not believe money has any intrinsic value. As economic anthropologists would say, money is a set of promises we make to one another, a sort of IOU. Where there is trust, there is credit!
By issuing an unconditional income, Circles is re-approaching the promises we make to each other and to the world. By rethinking money itself, by making money abundant, Circles is creating a set of initial conditions for people to democratize the economy around them, and bring about a basic income from the bottom-up without a central authority.
October 23st — 8pm:
After a week had passed, we had twenty thousand new accounts deployed, as well as new servers to deal with the traffic, with many people reaching out to support us. Circles became the most used app on the xDAI side chain, with the hotspot in China, followed by the US.
This was a moment to reflect upon the hard reality of what would it actually mean to run a real basic income system. For example, how many people are needed on call to make sure the system doesn’t crash and runs smoothly? What are the resources needed to maintain the technological infrastructure, plus the equally important (often made invisible in the space) social work needed to communicate and organize the real economy with other people.
How to support this in a way that is both rooted in the local but also coordinated at a planetary level?
October 30th — 12am:
Because we are trying to create an unconditional basic income system, we need to be critical about our own efforts. Many critical voices are correct to point out that private attempts at creating a basic income run the peril of lack of scalability and reach but more importantly, are vulnerable to be turned into private profit-seeking enterprises.
At the same time, there remains the reality of making sure the people who build, maintain, improve and expand the system are supported (aka for revenues to cover costs); that is, until everyone has a basic income and people can choose to support the project without having to worry about not making ends meet. Otherwise, it would just be an elitist fantasy.
As people all over the planet joined, we wondered this along with many other questions about how to facilitate others to democratically embed the economy around them with Circles, beyond Berlin.
If we are really serious about building Circles, we concluded, we must go beyond the outdated Venture Capitalist and Angel Investor model, whereby money is given as a centralized investment, often meaning an interest-bearing debt for a share in the private property of the product.
We know the social dilemma is very real. How could anybody in their right mind trust the system if there’s an anonymous private investor who gets to extract transaction fees on peoples’ basic income down the line? We need to be both critical and serious about these issues and create the conditions for these systems to emerge without exploiting people.
This does not only apply to Circles but to the blockchain universe as a whole, which today largely resembles feudalism’s mode of production in it’s political-economic organization and its corresponding hierarchies of power. In other posts, we will be focusing on the political-economy of crypto, to critically asses it’s problems and potentialities.
As our friends at Commons Stack would say, the point of technologies like blockchains are to build resilient public goods where the end users have a stake and decision making power in the infrastructure they give life to. How can we create and manage these technologies as a commons? One of Circles’s aims is to make money itself a commons. Private property is, after all, at the root of a lot of the problems society faces today.
Imagine a Circles system where the transactions fees are paid in circles’ personal currencies, which are then used for the maintenance of the infrastructure and its overall social reproduction. Because Circles is meant to embed itself in the real economy, and not as a speculative asset, programmers and people at large could accept it as co-payment for what they bring. This process will take time, but it’s our long term goal.
November 6 –18:17 pm:
How it started. How it's going. pic.twitter.com/QwT2e8k7ZB— Sarah Friend (@isthisanart_) October 16, 2020
If we look at the history of how new technologies and industries emerged, we see that it was through various forms of protectionist policies, with government subsidies, tariffs and nurturing incentive-mechanisms to support emergent technological innovation. We find this from 18th century Britain, to 21st century China.
For example, in the second half of the 20th century, the government of South Korea developed the country’s steel industry without having even the raw materials for it, now being one of the largest producers and exporters of steel in the world. This type of industrial policy, known as infant industry protection, flies right in the face of neoclassical free market economics (and it’s cryptoeconomic cousins), who believe market competition, comparative advantage and free trade are what makes people and countries rich. If you don’t believe us, check out Development Economist and Economic Historian at Cambridge Univeristy, Ha Joon Chang, explaining this in detail:
Because we are not a state (nor we want to make a new one), the question is:
How to rethink industrial policy without a nation-state? Universal Basic Income is a paradigm shift in our civilizational system of value, which allows for new social forms to emerge. How to support the social and technological infrastructures that can make basic income come about? How to go, even, beyond industrialism as the main form of arranging technology in society?
From its monetary design to the politics of a basic income beyond nation-states, the consequences that systems like Circles will bear on the future of the world is a a question of practice. Up to this point, the social and technological work that brought Circles into being was paid for by Martin Köppelmann, who promised 1 million Euros to the project, which was enough to launch the system (after 7 years since the idea came about).
As the team who did the work of bringing Circles into being, we think it’s important to diversify the funding sources to decentralize power while making the Circles Commons infrastructure sustainable in the long term. Martin of course agrees with this. One of our goals is to make it easier for anyone to join and, if they want, to run their own instance of Circles in their own community, in order to nurture the regional economy and rebuild trust. We just transitioned our infrastructure to Digital Ocean, which should allow us to better with the huge amounts of traffic in the network.
Having to be constrained for money when we just gave birth to a Baby Phoenix (one name we use to call the code-base) creates upward pressures which only hurt the roughly 165,000 registered people from all over the planet who just want to be able to spend the circles currency in their communities of trust. We need long term planning to overcome the challenges of our time.
If we are truly serious about creating the foundations for a world where power is decentralized, we need to make sure these emergent technologies are nurtured, protected and maintained for the long term. Our main goal is to provide the social and technical infrastructure that allows people to have the basic dignity to afford the things they need in their daily life. Otherwise, it’s just business as usual.
If you would like to support us, please don’t hesitate to get in touch with us firstname.lastname@example.org and help us in building this journey!
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