10.2. Economic start-up

The economic startup of Software Democracy involves the launch of several projects: launching the currency, implementing the first rules for collecting and disbursing Universal Basic Income.

The currency

The global reserve currency

The best current candidate for a global currency is undoubtedly the Bitcoin, but its highly unequal initial distribution poses a problem. One could then imagine that a large part of the funds allocated to international institutions would gradually be used to buy Bitcoin at market price, which would weigh on the resources of the Software Democracy.

Another option is to fork a reliable blockchain, such as Bitcoin or Decred, to start the distribution from scratch. In any case, this cryptocurrency must have a mechanism to adjust the monetary issuance according to economic activity.

Mining the global reserve currency is decentralized. Everyone can mine the global reserve currency, and it is accepted worldwide by professionals and individuals who wish to use it. States participate in mining and limit the risk of attack. Private mining is allowed, as long as miners agree to comply with the decisions of the software democracy, which will impose a certain distribution of mining products.

The global reserve currency deliberately has technical limitations (lack of flexibility, transaction costs) that are the counterpart of its absolute search for security and robustness. This limits its use to specific cases and encourages the use of national currencies on a daily basis.

National currencies

Each country is free to use the blockchain technology it wishes for its national currency and is sovereign in the rules for issuing its currency.

The currency can be fully or partially backed by the global reserve currency or freely convertible.

Using a single global currency?

The question of a global currency can be raised, where a level 2 (like Lightning for Bitcoin) would allow for processing a massive volume of transactions.

The main obstacle is that the economy of the Démocratie Numérique programs the currency to implement its national policies (tax collection, taxes...). This would impose on level 2 a complexity incompatible with its primary mission of security and robustness.

Moreover, it would not allow national currencies to fluctuate among themselves, which enables an adjustment of economic competitiveness between countries.

It is probably preferable to maintain two levels of monetary hierarchy. Can a global level 2 then coexist with national currencies? Probably yes, but its use should then be discouraged in the face of national currencies, for example by heavily taxing transactions or reserving them for certain types of entities (States, international companies...).

Exchange platforms

Exchange platforms allow the exchange of national cryptocurrencies or their conversion into global reserve currency. Transaction fees apply (0.05% for national currencies, 0.1% for the global reserve currency) to limit speculation and finance the technical infrastructure of the Software Democracy.

They also enable the exchange of system currencies (USD, EUR) or current cryptocurrencies into currencies of the software democracy. In this case, the incoming conversion is free, but the outgoing transaction is taxed at 5% of the amount exchanged. This amount contributes to the financing of the software democracy.

Launching the Economy

Payment Wallets

Wallets allow for the start of the economic life of Software Democracy. As a reminder, everyone has at least one "current account" wallet associated with their digital identity. They receive their Universal Basic Income there and will use it for transactions that need to be identified.

However, everyone can create as many wallets as they wish to manage their accounts or anonymize their transactions, knowing that the transactions themselves can be anonymized.

An application allows for the management of wallets, transactions, and more generally financial services (loans, etc.).

Automating Direct Debits

The economy of Software Democracy automates the collection of taxes and fees, and the redistribution of income as much as possible. It is programmed in the Code of the Software Democracy and applies to everyone in a perfectly equitable way.

Collection of taxes and fees

All these taxes can be collected in real-time on transactions, without declaration or additional formalities. The rates are adjusted as votes progress.

Similarly, the distribution of the Universal Basic Income will be automated according to the allocation voted by the citizens.

NFT Wallets

They allow everyone to confirm ownership of an asset in the economic system of Software Democracy.

NFTs can be freely bought or sold, with this transaction materializing the transfer of ownership of the asset.

Different types of NFTs for each type of asset allow for the collection of appropriate taxes and fees.

Corporate Status

In order to quickly offer goods and services paid for through the economy of the Software Democracy, a prototype of a company model is created:

Universal Basic Income

The Universal Basic Income is a key element of the Software Democracy. Starting from the proposal that 50% of the state's income is redistributed as Universal Basic Income, the system can be set up as soon as the state has its first revenues.

This will trigger a virtuous circle, attracting newcomers who wish to benefit from it. They will then begin, in turn, to carry out transactions and contribute to the economy of the Software Democracy, which will ultimately lead them to become interested in the governance of the society and the status of citizen.

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