A tiny cryptocurrency project called Manna has just announced that they have taken on what they call a “major-party candidate for president” as an adviser for their project. Manna is a cryptocurrency that aims to offer what’s known as a universal basic income, or UBI, to anyone, using cryptocurrency as the method of distribution.
The Trouble with a UBI
The term universal basic income has been in the news recently, but what is it exactly? The idea behind it is that all citizens of a country that has a UBI should receive a monthly stipend of sorts that can be used for anything. The idea according to its creators is to get rid of specific entitlement programs like welfare and replace them instead with a flat wealth disbursement that benefits everyone.
While no specific numbers have been set in stone, many proponents of the idea such as Andrew Yang, the Democratic presidential candidate for 2020 who is now an adviser for Manna, will be running for a platform that includes a $1000 per month universal basic income.
For those that live in the USA, you’ll know that $1000 a month is certainly not going to buy you a lavish lifestyle. Instead, it would be enough to rent humble accommodations and buy some basic necessities like food for a very small family each month.
Proponents of the program often argue that entitlement programs like welfare actually discourage people from working because if they become sufficiently employed, they will lose their benefits. In many cases, the amount of money that can be earned from welfare exceeds that of being gainfully employed with a full-time job.
Better than Welfare?
Under a UBI scheme, everyone, rich or poor, would receive the disbursement regardless of their employment status. This, experts claim, offers protection from job loss, and means that even those who just have minimum wage work would be able to support themselves without needing to rely further on the government with entitlement programs.
UBI is not without its detractors, however. Primarily, those who are against UBI claim that it is communism in its purest form. That being, taxes are collected and that money is then redistributed to those who did not necessarily earn it.
Further, in order to pay for such a program, governments may need to print more money or give out the money as loans to central banks which could devalue the currency or negatively affect the economy. One final major argument against the program is that if UBI were to happen, prices for everything including basic necessities could increase quite significantly because suddenly all households would have more spending money available. In a sense, detractors argue that a UBI would devalue a currency and manipulate the economy in potentially harmful ways.
Finland attempted its own UBI experiment and later cancelled the program, leading many detractors to claim that this is proof that the system is inherently flawed.
Today, the Manna cryptocurrency sits at $0.0033 each and has a market cap of about $250,000.
Once the program is operational, anyone can sign up for Manna disbursements and then periodically receive the cryptocurrency based on a set schedule. This is designed to emulate a national UBI program but instead be one that is borderless and not nation specific so that those who live in areas without a UBI could still potentially benefit from one.
There are a few clear problems with this model.
First and foremost, where will Manna get its value if it’s only purpose is to be received for free and then sold in an attempt to get a more valuable currency like bitcoin or dollars?
Cryptocurrencies like bitcoin have a value not just because people want them and they are in demand, but that they are not easy to get. Mining bitcoin is incredibly costly and difficult, and this gives it some inherent value simply because it’s not easy to get.
Think of it this way. If you hold Ethereum, you likely receive all sorts of strange airdrop tokens in your wallet that you didn’t ask for. Most of those tokens are worth nothing. This is because they are from tiny projects that gave away millions or even billions of tokens in exchange for nothing. While some legitimate projects with real business models do airdrops, typically each person will only receive a very small amount and this is mostly done as a means of marketing.
It is our suspicion that unless Manna comes up with a real use case besides just something that is given out for free in exchange for nothing, then it to stands a great risk of being worth nothing. While the group claims they will support the currency by buying it off of exchanges using tax-deductible donations, will this be enough to prop up the entire market cap?
In the Andrew Yang announcement, the group asked its followers to “buy Manna to help capitalize the currency so that the distributions to our UBI recipients will be more significant”.
Andrew Yang 2020
Aside from his dreams of a $1000 monthly UBI for Americans, who is Andrew Yang?
Image via yang2020.com
According to his official campaign website, Andrew Yang is the founder of a group called Venture for America which is a group that creates jobs in economically troubled American cities like Detroit and Baltimore.
In April of this year, Yang released a book called “The War on Normal People” in which he lays out his argument for why he believes that UBI will be a central issue once automation does away with a multitude of jobs and could leave many unemployed.
Yang does not appear to have any previous political experience. He is the son of highly educated and wealthy Taiwanese immigrants. He will also not be the only person with ties to crypto running for president.