A Social Crypto

I’ve often wondered what would be the catalyst for the next major recession.  As cryptocurrencies went mainstream, it occurred to me that one way in which we could shift wealth would be through the adoption of a new currency.  How amusing would it be for the 99% to develop a currency to use among themselves, while the top 1% ended up with monopoly money.  As fun as that sounds, it’s not quite that easy.  But something about this crypto.. maybe there’s something here.

Bare with me on this… what if we introduced a cryptocurrency with a built-in distribution algorithm?

Fundamentally, the first things we’d have to decide on is a fundamental stance on how we should distribute resources.  My vote would be for a simple mandate that more resources should be awarded to those who contribute more.  If we can all agree on this (which should be rather easy), then we would just have to decide on how exactly that distribution would play out.  A while back, a Harvard professor asked what people thought was an fair distribution of wealth among Americans.  The top 20% looked to occupy about 35% of the country’s wealthy while the bottom 20% occupied about 10% of the country’s wealth.  The middle 60% occupied about 55%.  Sure, why not.

Or maybe there’s a way to tie the bottom 20% to cost of living?  If you were constantly tracking accurate statistics on cost of living, you could always make sure that the bottom 20% was a certain margin above the cost of living, ensuring that those at the lowest run of society were always afforded an opportunity to get ahead.  From there, perhaps you could let the currency do as it may.

Either way, the idea here is that through poor governance, we’ve found ways to systematically shift wealth from the many to the few.  Beyond the ethics of it, this actually creates a great deal of economic hardship.  Whether it’s going to school, starting a family, buying your own house, or starting a business, it all costs money.  Once upon a time, you could comfortably provide for a family on a single middle-class income.  Where I live, the cost of a middle-class lifestyle is about $300,000 a year.  So people maybe don’t go to school.  People maybe don’t start a family.  People maybe don’t start a business.  And maybe we all take a step backwards.

I can’t help but think that the pursuit of power is a human instinct.  If so, the pursuit of power will always be an element within governance.  If true, government will always be susceptible to corruption because as we all remember, power corrupts.  So if government can’t be trusted to maintain a fair distribution of wealth, how do you address this?  You build it right into the currency.

So how do you go about getting people to adopt a currency like this?  Imagine being the person who brings 10 million dollars to the currency, only to end up with 5 million because half was redistributed to all the people who signed up with way less?  What would keep you from signing up with a single dollar, keeping the rest of your assets elsewhere as you accumulated ‘equality’.  As soon as I thought I was on to a genius idea, I realized this was a rather daunting hurdle.  But not an unsolvable one.

There’s something here… but I’m not quite there.

Analogies: Capitalism

a long time ago, someone designed a car.  It was beautifully engineered and truly revolutionary.  It was so well designed that it was pretty much built to last forever.

While the car was a something for the history books, the drivers were inconsistent.  Some understood the mechanics and drove respectfully.  Some showed less regard for the car and drove as it suited their agenda.

Along the way, drivers began allowing for more passengers.  Some for altruistic reasons, some because they paid, and some for the sake of personal relationships.

The car was built well enough to handle a few extra passengers, but as passengers increased and time wore on, key parts of the car started to wear down.  All the added weight was creating excessive pressure, leading to wear on parts that the car couldn’t function without.

Some of the older passengers are looking out the window saying the car looks just fine.  They can tell that the ride is bumpier but it’s hard to notice in a cushy seat.  They know that car was built to last and they know it’s gotten them this far.

Those who are more familiar see that the car is unsustainable.  If we maintain this rate of passengers, the car will fail.  If we want to reduce the amount of passengers, we can keep the car on the road.

Ironically, we’re so focused on the survival of old reliable, that we haven’t given any thought to the new models.  Technology changes everything.  As great as that car was, modern technology has changed how we get from point A to point B and it’s important to appreciate those changes.  There are ideas which we didn’t have the technology to pull off before but could be more viable today.

It’s dangerous assuming there’s no room for improvement.  Might be a good time to look at some options.  Even better, why don’t we look at what we need from our car, learn from our peers, and build something new and inspiring from the ground up.