UBI is here again, a full analysis of the suddenly popular Circles design logic
Original author: Azuma
Original source: Planet Daily
「Hey! Check out my Circles profile!」 ;
If you are in various cryptocurrency communities on a daily basis, you will most likely see the above sentence in the past two days (usually followed by Link). What's new? Is Circle launching any new products? Can you stud?
In fact, the above sentence is a forwarding language that comes with the system when the account is activated for a new project called Circles. Circles is not affiliated with Circle, and its founder is Martin Köppelmann, who is also the founder of the prediction market platform Gnosis.
Circles was officially launched yesterday, and on the first day, it won People) and other big V attention and discussion. What exactly does this project do? What is its magic? Check it out with the Daily Planet.
Let’s first try to define Circles by ourselves, let’s call it “Social UBI Currency Network” temporarily, and make the offline “trust Relationship" import chain is the core logic of this project.
UBI
Before understanding what is Circles, let's review what UBI is. The full English name of UBI is Universal Basic Income, also known as the "Universal Basic Income Plan". To explain UBI in the simplest terms, it is that the government sends money to residents, and each resident gets the same amount, and no qualifications or conditions are required to get this money.
The concept of UBI was born a long time ago. In modern history, many well-known figures such as Martin Luther King and Hawking are supporters of UBI . Today, UBI is becoming increasingly popular as the global gap between rich and poor widens, reducing the purchasing power of inflation-adjusted income. Although many countries have tried UBI, and even during the epidemic this year, the US government also tried "sprinkling money for the whole people". But for now, it is difficult for UBI to break the national concept, and the lack of international cooperation prevents UBI from becoming a global plan.
Because of the fairness and transparency of the blockchain, there have been many UBI projects in the currency circle that have received attention before, such as Humanity Dao, which was also awarded V Highly recommended by God, including the ENU avocado, which was once called the "No. 1 Airdrop in the Currency Circle" project and died heroically.
These visionary projects have encountered many problems in the implementation and have not been able to really work, but about the advantages and disadvantages of UBI, there are already some on the Internet There is a lot of discussion, we will not expand it in this article, but mainly focus on whether the unique design proposed by Circles can support its vision of establishing UBI on the chain.
Currency Network
With the development of blockchain and smart contract technology, human history For the first time, the world has the technical conditions to create a global, decentralized financial application. Bitcoin proves that money doesn't need to be issued by a central government, and what Circles wants to prove is that UBI doesn't need to be run by a government either.
As mentioned in the definition above, Circles is a currency network consisting of many different currencies. No permission is required, everyone can join Circles using a blockchain account. When a user joins Circles , the Circles smart contract will create and assign a personal currency to that user. For example:
Alice joins Circles, she will get Alice coin representing herself;
Bob also joins Circles, You will also get your own Bob coin.
The creation, distribution and issuance of all personal currencies will be executed according to the same rules.
Each independent user will continue to obtain the corresponding personal currency, that is, each personal currency will maintain a certain inflation rate, which is also the basis for creating new currency supply the only way. Different users acquire new currency at exactly the same speed, which means that new currency will always be consistent in issuance and will be evenly distributed to all members in the system.
Continue to give an example:
Assume that the current increase rate of Circles is 1 Coins/minute (only hypothetical data, the current actual data is 8 coins/day, and the annual inflation rate is 7%).
Alice joined Circles and created AliceCoin;
Five minutes later, Alice will have 5 Alice Coins, at this time, Bob joined the system and created Bob Coin ;
After another five minutes, Alice will have 10 Alice Coins, and Bob will have 5 Bob Coins.
Alice saw that her friend's wallet balance was too low, so she gave Bob her 5 Alice Coins.
After another five minutes, Alice will have 10 Alice Coins, Bob will have 10 Bob Coins and 5 Alice Coins.
At this time, someone may ask, UBI requires everyone to get the same amount, if Alice does not transfer money to Bob, will Bob always be better than Alice? The amount of currency obtained is less?
In terms of absolute numbers, this may indeed be the case, but in fact, the relative difference between Alice and Bob’s assets has been shrinking. If Alice does not transfer money to Bob, then Now Alice will have 15 Alice Coins, and Bob will have 10 Bob Coins, 10:15=2:3, which is closer to 1:2 (5:10) five minutes ago. As the timeline elongates, the relative difference in the amount of currency obtained by the two will become smaller and smaller.
From the perspective of wealth distribution, this also means that the total amount of wealth obtained by each person will be getting closer and closer.
Social attributes
One of the most essential functions of money is a medium of exchange.
Circles wants to do this socially. In order to give each personal currency its usefulness, it must not become a useless number. Circles introduces the concept of "Trust", where users can choose to trust each other's personal currencies to facilitate transactions. When a user clicks "Trust" and chooses to trust another person's personal currency, it is tantamount to telling the system that the selected personal currency is equivalent to any other currency they already own. This means that anyone who owns this trusted currency can trade it against their own currency (not necessarily their own) at a 1:1 exchange rate.
Another example:
Bob believes Alice, Alice believes Carol;
Carol needs to pay 5 personal coins to Bob;
Carol can use 5 Carol Coins to exchange 5 Alice Coins in Alice's hand, and then pay to Bob.
"Trust" can be revoked, once it is revoked, it means that you choose not to accept others to use this personal currency to exchange your own currency, but at the same time , these currencies whose trust has been revoked in their own hands can still be traded with other people who trust this currency.
Continue to give an example:
After the above transaction happened, Bob and Alice broke up. Trust Alice again;
At this time, Bob still has 5 received Alice Coins.
Other people can no longer use Alice Coin to exchange Bob Coin in Bob's hand, but Bob can use Alice Coin in his own hand to trade with other people who trust Alice, Exchange it back to other currencies you want to hold.
Due to the transitivity of social networks, the usability of personal currency will increase with the continuous expansion of social networks. Within the Circles network, and being able to establish a large number of mutual trust relationships with other users, its personal currency can better serve as a medium of exchange.
Circles mentioned the theory of Six Degrees of Separation (Six Degrees of Separation) - each person can know any stranger in the world through at most five people. This is also the theoretical basis for Circles to realize the transformation from a social network to a transaction network. As more and more users join and more and more mutual trust relationships are established, Circles will become a real currency transaction network.
Risk Response
Speculators are never absent.
In the real world, if the government decides to implement UBI, one of the big problems it will solve is how to avoid impersonation.
In the virtual world, this problem is even more serious, because everyone is free to create a large number of blockchain accounts, and Circles uses accounts to To distinguish between identities, if this problem is not solved, then theoretically one person can obtain a large number of different personal tokens, and fairness cannot be discussed. In fact, the social attributes of Circles can perfectly solve this problem, because currency transactions must be transmitted through social networks. Let's continue with the example:
Bob trusts Alice, that is, he accepts all Alice Coins;
Alice secretly creates a fake
Alice now has 10 Alice Coins, but in fact there are 10 counterfeit coins secretly;
Alice ;I want to buy some goods worth 10 currency units from Bob;
No matter which account Alice uses, when she finally buys goods, she must pay Alice Coin, and counterfeit coins cannot complete the transaction.
This example proves that if Alice wants to complete the transaction, she can only pay other users in the currency they choose to trust. Even if Alice opens 100 fake accounts and makes them trust each other, she will never be able to spend more currency than she has Alice Coin , because Alice Coin is the only currency other users trust. This is why users need to be cautious about all mutual trust relationships, because a wrong trust establishment may cause all your funds (currency) to be lost.
Of course... If you are energetic and play ten roles per person, and each builds their own social network, then pretend I didn't say... ..
How to get involved
Currently, people can Circles official website to register (Sign Up) , the specific process can be completed according to the official guidance. It should be noted that two specific conditions are currently required to activate an account: 1. The trust of three friends is required (some users reported that this step is no longer required for new registration); 2. A small amount of xDAI is required.
Currently, many users are "seeking mutual trust" on major social media platforms in order to quickly complete account activation, but as mentioned above, a wrong trust establishment , it may cause all your funds (currency) to be lost, so users must be cautious; as for why xDAI is needed, it is because Circles is built on the xDAI network, and users who need xDAI can go to faucet address self-claim (October 18 shares seem to have been applied for, users eager to activate can use other addresses to transfer xDAI to the registered address).
After the activation is successful, the prompt is as follows:
Hayden believes that Circles’ login method that requires entering the private key in the browser is not secure enough. Habit. In addition, perhaps due to the high user participation, a large number of users reported this afternoon that the Circles server was obviously unable to do what it wanted—"Try it for 10 minutes, and it was loading in 9 and a half minutes." Odaily Planet Daily did feel after the trial that the slow web page response speed and congested network seriously affected the user experience.
Technology is only one of the challenges that Circles faces. As mentioned above, there have been many projects that tried UBI on the blockchain before Circles. But in the end, they failed to mature due to various problems. DeFi has been cold in the short term, and today’s blockchain industry is eagerly waiting for hot hype. Circles has taken the first step to gain attention, and UBI will probably be discussed again. However, what will happen to the project in the future still needs to wait for the test of time.
Original link
Welcome to join the official BlockBeats community:
Telegram Subscription Group: https://t.me/theblockbeats
Telegram Discussion Group: https://t.me/BlockBeats_App
Official Twitter Account: https://twitter.com/BlockBeatsAsia
Related Articles
