You may be asking yourself: what does UBI mean in a people powered system?
With Circles, people claim the right to a basic income by issuing money into being. Understanding money as a set of promises we make to one another, Circles gives people the equal and unconditional power to issue promises into the world and claim resources. In Circles, people exercise the power to create money, thereby democratising it’s creation.
Circles is a form of electronic money, which people have the power to issue on a periodic, individual basis, without means-test or work requirement. In order to become an unconditional basic income, to claim enough wealth and be free of wage labor, covering one's basic needs, political and economic organization is needed. People therefore take the responsibility of issuing promises to one another, without the need to repay it back to a bank or a state. The only prerequisite is access to the internet and that other people in your community trust you in order to enter the system (See section on Trust).
In the current protocol, there is an embedded inflation rate to the Circles system. Inflation is always a process of redistribution. Under the current debt system, this redistribution happens from debtors (those who owe money) to creditors (those who lend money), creating a widening wealth inequality - from the 99% to the 1% -. In contrast, In Circles, inflation is a process or redistribution that equalizes wealth relatively between different individuals. For example, if somebody joins early and exercises her power to issue money more than those who join later, this differential amount decreases relatively over time. The share of the monetary mass will constantly increase as every person starts to claim their basic income by issuing promises to others, thereby fostering circulation. In Circles, people have the equal and constant right to issue a portion of the money supply as an unconditional income or dividend.
The Circles system is therefore a material and symbolic infrastructure for the distribution of value. The Circles system acknowledges relationships between people as the necessary bedrock for social forms to emerge that more accurately reflect the needs of the community. For now, that universality is limited by access to an internet connected browser, and depends on infrastructure that is not sensitive to the relationships between the members of any given community. We do not support digital colonialism. We expect that the system will become more inclusive as more people get involved and start to organize their own local economies. For now, we use the means available to us to co-create alternatives - acknowledging it’s contradictions - and contesting them in practice.
Today, we use one money to manage health, education, local and international trade, agriculture, and many other aspects of life. This "one size fits all" mode of exchange is like a pine forest. In such a forest, decaying pine needles acidify the soil and prevent certain types of plants from growing. The simplicity involved has its advantages and it might be efficient, but the thing about monocultures is that when something goes wrong, like a fire, or an invasive parasite, or a recession, it becomes a threat to all participants collectively.
The monetary design for Circles, by contrast, resembles a jungle. In the jungle, success requires a healthy arrangement of relationships with your neighbors. There are no bankers dictating which strategies are permitted. The system is open to a wider diversity of strategies. Unlike life in a monoculture, if something goes wrong in the Jungle, the parts of the system that are unrelated to the problem either adapt to the changes or remain intact. This means that individual failures are less likely to threaten the whole interconnectivity of the support network. By providing this kind of resiliency, Circles aims to make it less risky to explore new ways of supporting your community.
With Circles, when a new person joins, they exercise the power to issue credit to others. Alone, these are called personal currencies, but together these form a network of mutual currencies. As personal currencies only start to circulate once somebody else trusts them —the structure of that network depends on the ecology of trust people have with each other. Currents of trust are like different rivers finding their way from the mountain, through the jungle and to the ocean. The more trust exists in a community, the easier wealth will flow and circulate between them, creating ecologies where different social relations can thrive.
You might wonder: Why is Trust needed? You need to understand what trust is if you want to use Circles properly. Trust has a dual meaning in the Circles system: one social, one technical.
From a social perspective, it means the ability to issue credit to others. Trust flows the same way as goods and resources. Trusting somebody else's Circles means that you are willing to accept their IOUs (I owe yous) as payment in exchange for something of value. You can pay people you do not know through what we call transitive exchange. You can think about transitive exchange as the 6 degrees of separation which connect all human beings on Earth. Credit therefore ripples, flowing the opposite way of stuff. See more in the white paper.
From a technical perspective, trust means that you acknowledge somebody is a real person, that they are who they say they are. In the initial iteration of Circles, in order to enter the system you need 3 people to trust you. Trust is there to avoid people making fake accounts, pretending to be someone who they are not and claiming, unfairly, 2 basic incomes for themselves. The point of it is not to replace the trust between people with a faceless technology, but to create new social and political institutions with the infrastructure this technology provides, by trusting one another.
The more people trust each other’s Circles as a reliable means of payment, the more Circles currencies will be positioned socially as money. From a design perspective, trust is needed to make sure that people are who they say they are without the need for creepy biometrics and surveillance capitalism dystopias. In other words, trust in the Circles system means both the ability to spend and that you believe other people are real, trustworthy peers in your community.
Ideally, the people who trust you to enter the system are already in your communities, exchanging with one another the things they need in their lives, forming what we call a Web of Trust (WoT - see more in the whitepaper), where the different currencies circulate. As Circles evolves, we expect different Webs of Trust emerging in different local areas, with their own rules about how people can join.