[Bitcoin-development] Fwd: The "pay it forward approach" to crypto currencies

Melvin Carvalho melvincarvalho at gmail.com
Wed Jun 12 17:46:13 UTC 2013

FYI: some musings on how crypto currencies might be combined with social
good ...

---------- Forwarded message ----------
From: Melvin Carvalho <melvincarvalho at gmail.com>
Date: 12 June 2013 19:39
Subject: The "pay it forward approach" to crypto currencies
To: building-a-distributed-decentralized-internet at googlegroups.com

Crypto currencies are doing quite well, but they have yet to make a
meaningful impact on any economy, nor have they achieved much in the way of
social good, however there is a tangible excitement about ways that it can
modernize the way we live our lives

We live in a world where 10,000 children under the age of five die every
day, which can be prevented by simple, affordable interventions ... why do
we let this happen?

Turning he question on its head, what interventions do crypto currencies
enable us to perform, that could help solve this problem

Well certainly crypto currencies have opened pandora's box in terms of
technology being able to create money, let it float, and let it appreciate
in value ... something that the alchemists of old (whose number include
Aristotle, Newton and Keynes) would have been proud.  Well done Satoshi,
now what shall we do with this gift?

The optimal principle should be that we beam new money to the people that
need it most, on a relatively uniform basis.  Something of a harder
problem, and one with no perfect solution.  But we could make some
approximations ... perhaps.

Suppose you were to credit 10,000 new coins to every person on the planet.
Then let it float on the free market (a la bitcoin).  Initially worth zero,
the coins would potentially rise in value to become a consensus driven
global dividend.  Certainly if it went higher it could do a lot to
alleviate many problems for poorer people.

Unfortunately we dont have a huge database of every person on the planet in
the public domain, so this strategy is problematic.  However we roughly do
have good statistics that most people have a mobile phone, so we could beam
coins to every mobile phone.  (technically you can do this using the tel:
URI scheme such that you get one phone, one share).

Phones are now banks, and also have the ability to send money via SMS.

The problem with this approach is that it favours people with multiple
phones, who are probably correlated to relatively wealthy people.  Not
great, but it's a start.

How about we then do it country by country and beam coins to the poorest
countries, say in proportion to GNP per capita.  Perhaps better.

Again, it's possible to systematically game the system, to an extent.  So
one way to reduce the risk would be to allocate coins on a lottery basis,
where a random number generator selects 'lucky' winners.  The net effect
will be generally positive, while preventing major systemic risk.

Little by little, we can bring people out of poverty using crypto coins and
make a better world.

Now, I know what you're thinking.  Money for nothing, that makes no sense.
Why would these coins ever be worth anything.

There is where the "pay it forward" concept comes in.  All coin recipients
are encouraged to "pay it forward" ... do good for the sake of good, and
allow that karma to flow back to you.  Eventually this can take the form of
rebuying the coins that saved your life when you were young, and enabled
you to become a successful businessman.

As the value, liquidity, trust, and importantly, social good of the system
build.  So it becomes easier for people to maintain societies, for
economies to thrive, and for governments to balance their budgets.

It becomes an ever increasing virtuous circle, that can transform the

I've left out a few gaps and technical details, but I'm sure it's possible
to join the dots and incrementally move towards an optimal solution.  I
think bitcoin and the internet have paved the way for "pay it forward"
crypto currencies.

And hopefully it can one day become "an idea worth spending".  :)
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