Category Archives: Crypto Currency

Universal Basic Income and cryptocurrency Manna – Scott Santens * Manna Whitepaper – People’s Currency Foundation.

We, the people of the world, recognize and declare that money is a social invention which can be changed by the people according to our values.

As we witness the growing scourge of inequality and its consequences, we see that the existing system is unjust and unsustainable. Recognizmg and accepting the moral obligation that arises from such knowledge, we stand united in the decision to create a better alternative, a currency of conscience designed to facilitate the emergence of a more just and sustainable global economic system.

Manna Mission Statement, People’s Currency Foundation

Scott Santens

Manna is the first publicly traded, block chain based currency to be distributed as a Universal Basic Income subsidy to anyone in the world who applies and is verified as a unique human being.

On January 29, 2018, The People’s Currency Foundation (a U. S. based 501(c)(3) nonprofit) published their white paper for Manna, a relaunching of the basic income cryptocurrency formerly known as Grantcoin, which was the first publicly traded blockchain currency to be distributed universally to all those verified as unique applicants.

Its first distribution occurred on June 30, 2016. Four more disbursements occurred on October 1, 2016, January 31, 2017, June 17, 2017, and August 9 2017.

Note: In the interest of full disclosure, I was a recipient of each of these disbursements.

Since the last disbursement in August of 2017, disbursements have been paused as Grantcoin began the transition to Manna. Disbursements are expected to begin again this month as Manna, and on a new weekly basis to all verified accounts, of which there now number over 6,000 from over 100 countries around the world.

Since May of 2017, Grantcoin (now Manna) has seen a significant increase in value, and as of this writing can be ‘ exchanged on the SouthXchange for $0.011 USD. As shown in the chart below, the market price approximately doubled in 2015, more than doubled, again in 2016, and increased more than 16-fold in 2017, for a total gain of over 8,000% through January 1, 2018.

(Note: The price has continued to increase, with another doubling already in 2018, not shown on this chart.)

Considering each disbursement was around 7,000 coins per recipient, that’ s an unconditional grant of about $75 per person per disbursement in today’s USD cash equivalent market value, and more for those receiving referral bonuses.

That may not sound like much to those in countries like the US, UK, and Canada, but for those in countries like Kenya, that’s a full basic income, sufficient to cover basic needs. In fact, to give some further context, the largest basic income experiment ever devised is going on in Kenya right now, where the NGO GiveDirect is providing monthly basic incomes of around 22 USD for the next 12 years.

With the above in mind, Manna appears therefore an entirely realistic way of immediately providing basic incomes anywhere in the world, given sufficient access to currently available technology. And over time, as the value of Manna increases, it could potentially reach sufficient value to be considered enough for securing of basic needs in countries like the United States, especially in more rural areas, and in turn be considered far, far more than basic in places like East Africa where hundreds of dollars a month would be sufficient to provide median-level incomes as a monthly starting point.

Manna is planned to be distributed on a weekly basis, and divided equally among all recipients. A desktop wallet is now available in beta form (for Windows and Linux with Mac coming soon), with a web-based wallet also expected to be released soon. A block explorer for Manna is also now available for use.

The Manna money supply is planned to increase at an annual rate of 3.5%, chosen because it’s close to the historical average inflation rate of the US. For comparison, the inflation rate on Steemit is around 3% right now.

The value of Manna is determined not only by the market exchange rate, but unlike most other cryptocurrencies, it is also backed by tax deductible donations to the 501(c)(3) People’s Currency Foundation. One future goal is to go even further with this model by pursuing something similar to Alaska’s‘ Permanent Fund, where a diverse portfolio of investments would further back the cryptocurrency.

A referral process is in place for Manna where those who sign up through a referral link (such as this one), will receive a 50% bonus for one year, and those who refer others with their own referral links will receive their own bonus as well. The referral system is however temporary as a means of accelerating adoption, like how PayPal started, with plans to phaseout in time.

Because recipients of Manna are all over the world, this provides a very interesting way to help others all over the world. Through the Mannabase platform, users will be able to send a chosen percentage of their own Manna to others by region, for example, a place like Puerto Rico because of a hurricane, or a handful of countries based on their lower GDPs, or even a percentage of their weekly UBI to all other Manna UBI accounts.

Furthermore, with the addition of profiles on Mannabase, it will be possible to send Manna to specific people based on specific criteria for those who choose to provide that information. For example, someone may wish to provide 10% of their weekly Manna UBI to those who are over 65, to help boost their incomes further.

Another interesting element is the ability to send Manna to those under the age of 18. Parents will be able to sign up their kids with sufficient proof of identity, but those under 18 will not be able to Withdraw their Manna until 18. This opens the potential for those turning 18 to receive potentially quite large unconditional capital grants along the lines of what Thomas Paine advocated in Agrarian Justice.

Last but not least, here’s the roadmap for Manna to see what the plan is over the next year. Notice the intention to provide entire communities with Manna to test full universality.

Learn more at Scott Santens .com

Universal Basic Income Cryptocurrencies Like Manna are Pioneering the Way Towards Decentralized Targeting

People’s Currency Foundation


Manna is the first publicly traded, block chain based currency to be distributed as a Universal Basic Income subsidy to anyone in the world who applies and is verified as a unique human being. Manna, originally called Grantcoin, is also the first cryptocurrency to be managed and distributed by a US. based tax-exempt nonprofit organization, and to be value backed not only by investors, but also by tax deductible donations which are used to buy back the token on markets where it trades.

If sufficiently capitalized in the future, Manna will also be backed by profits from a capital reserve fund, similar to the Alaska Permanent Fund which pays an annual dividend to all citizens of the US. state of Alaska and is the longest lasting and most successful UBI subsidy program in the world.

Since launching as Grantcoin in 2015, Manna has seen an 80 fold increase in price and has attained a circulating market cap of over $4 million USD as of January 1, 2018. (Note: This has continued to increase, more than doubling already in 2018.) There are more than 3,500 known stakeholders of Manna in at least 100 countries around the world. Through the end of 2017 over $250,000 USD had been given away as basic income in the former Grantcoin or Manna currency.

The Manna project aims to achieve three main goals:

1. Implement an economically impactful basic income on the blockchain, especially to help some of the world’s poorest people, children, and developing nations.

2. Enable targeted direct giving for highly efficient, effective altruism, utilizing the technological benefits of cryptocurrency and smart contracts.

3. Build a global network of socially conscious businesses, nonprofit organizations, and their customers and supporters, using the Manna currency as a tool to create a more equitable economy for a better future.

To achieve these goals, our diverse team of talented professionals and volunteers will raise capital; develop an online platform and associated apps and plugins for websites and smartphones; form partnerships with charities; reach out to businesses, financial institutions, governments, NGOs, and quasi governmental organizations; and spread the word about Manna through a book tour, speaking engagements, social media, videos and artistic creations, and personal and professional networks to continue to grow the user base exponentially.

Ultimately, we envision Manna becoming an alternative global reserve currency backed by a portfolio of assets held by a global NCO. This currency will be distributed into circulation as a UBI subsidy and children’s savings account program, to ensure food security for the world’s neediest people and increased economic opportunity for young people.

We believe this fiscally sound, socially responsible design will lead to Manna’s adoption by millions of users around the world.


Why Manna?

Manna is a globally distributed currency based on egalitarian principles.

As expressed in the Manna mission statement:

We, the people of the world, recognize and declare that money is a social invention which can be changed by the people according to our values.

As we Witness the growing scourge of inequality and its consequences, we see that the existing system is unjust and unsustainable. Recognizmg and accepting the moral obligation that arises from such knowledge, we stand united in the decision to create a better alternative, a currency of conscience designed to facilitate the emergence of a more just and sustainable global economic system.

Throughout history, human beings have dreamed of a world in which even the poorest and most unfortunate people among us will have their basic needs guaranteed. The principle of inherent human dignity and the hope of universal abundance have inspired some of humanity’s most beautiful legends, artistic creations, and moral philosophies.

Today, in a world filled with refugees, desperate poverty and extreme inequality, we have both the resources and technological means to ensure everyone’s survival and expand economic opportunity for the next generation, through the power of block chain technology and skillful design of a new monetary system based on the universal human right to a basic income.

The Problem

Only 62 people own more than half the wealth in the world today, while almost half the human population over three billion people are living on less than $2.50 a day. At least 80% of the world’s people live on less than $10 per day.

This extreme wealth inequality is a moral outrage. On a practical level, it is an utter failure of civilization to include most of the world’s people as full fledged participants in the global consumer economy. As such, it is a poor allocation of resources that could be more profitably distributed for the benefit of rich and poor alike.

There are many undesirable, even dangerous consequences for society resulting from widespread lack of access to money, among them:

Insufficient consumer demand to prevent economic stagnation and recession, as not enough people can afford to buy the products and services being produced by the economy.

Instability of the global financial system and danger of catastrophic collapse, resulting from too much money being held in too few hands and used for reckless financial speculation instead of investment into productive businesses in local communities.

Geopolitical conflict and terrorism arising from anger and apocalyptic fanaticism that are predictable results of extreme poverty, inequality, and lack of economic opportunity, especially among young people.

The global monetary system as it exists today exacerbates these problems by causing economic inequality to worsen. This is a direct result of a design flaw in the methodology of how major world currencies are issued into circulation. As noted in the Manna mission statement:

Currencies created as issuance of debt by banks, whose mission is to gain profit by charging interest on loans, favor the accumulation of wealth by already wealthy individuals, businesses, and nations, which are preferred for access to credit over those without as much capital.

Automation will make the problem worse as we approach the “technological singularity” generally predicted to arrive in the middle of the 21st century when robotics and artificial intelligence will surpass the abilities of human beings and thus eliminate the need for most human labor, rendering most people unnecessary for economic production and therefore unable to earn a living.

According to an Oxford University study, nearly half of all jobs in the United States are at risk of being lost to automation in the next 20 years, and up to 85% of jobs in the developing world, where poverty is already more severe.

Technological capital ownership, far from being widely distributed among the population, is highly concentrated into a small number of wealthy nations and leading businesses and their shareholders, who will reap most of the profits of the future fully automated economy.

The Solution

The People’s Currency Foundation offers a solution to the growing problem of wealth inequality and its consequences. We have developed an alternative currency called Manna which is issued into circulation as a universal human right, with equal access for all whenever new units of the currency are created and distributed. Inflation of the Manna money supply functions as a built in mechanism to counterbalance factors in the economy and society that tend to increase economic inequality, thus helping to reduce the dangers posed by this problem.

Unlike the currencies generally in use in the world today, which are issued primarily through the for profit banking system as discretionary loans, Manna uses a non discretionary system of monetary issuance, to prevent corruption and favoritism for access to the money supply.

Manna is distributed as a Universal Basic income subsidy that every person in the world is eligible to receive, for free, just because they are human and have the right to resources to help them survive according to the same principle that grants us the universal, inalienable right to freely breathe the air.

Money is an intangible representation of value that is necessary to live in a civilized world; and although the amount of inherent value of a human being, when measured in economic terms, is less than the amount of economic value they might acquire through productive work or investment of capital, a person’s inherent value is not nothing. The monetary system we use should reflect this principle.

Another part of the solution is to enable well off people who do not need a basic income to automatically transfer the currency they receive as UBl to people in need or to charitable organizations that are assisting such people. This can be done using a technology called smart contracts which will be implemented on Mannabase, a user friendly online platform for Manna recipients, givers, and users.

Furthermore, the Mannabase platform will function as a full scale solution for targeted direct giving of any amounts of money at any time to any number or complexity of user selected demographics, enabling effective altruism.

Freely distributing Manna UBI to authenticated recipients will enable the currency and platform to acquire a large user base, which can be sorted by various characteristics (geography, age, economic status, etc), so that givers will be able to micro target their charitable gifts directly to groups of people they believe are most in need or worthy of their support. Children will also be eligible for basic income distributions and charitable gifts into Mannabase wallets that they can unlock when they reach adulthood, thus providing increased economic opportunity for the next generation.

The success of Manna in helping give rise to a less severely unequal distribution of wealth among people and nations is not dependent on the success of any political movement, legislation, or international treaty or institution, The people of the world themselves, by supporting and using Manna as their preferred currency and the Mannabase platform for targeted direct giving, may bring about the desired effect and a positive effect will not be prevented if less than a majority of people decide to support it, as would be the case using political methods in democratic countries. Even if only a small minority of the world’s population decides to use Manna, it will still be able to exert a positive influence on the global economy in the direction of equality.

Having said this, the People‘s Currency Foundation, as a socially conscious global NGO, will attempt to reach out to governments throughout the world, especially in small developing nations, and encourage them to sign up their population either en masse or in carefully selected pilot programs for Manna basic incomes. We will also attempt to persuade governments to acquire and hold Manna in their asset portfolios.

The Manna currency network uses decentralized, open source, peer to peer technology, is legal in most countries, and cannot be easily shut down or blocked by authoritarian governments that may wish to prevent their citizens from using it. Manna empowers the people of the world, both in its technological and socioeconomic structure and effects. This new alternative currency can be an important piece in the puzzle for solving the problem of wealth inequality in the 21st century.


Legal Structure and Governance

The Manna project is managed by The People’s Currency Foundation, a United States based 501(c)(3) nonprofit organization, classified as a public charity by the US. Internal Revenue Service. Donations to the Foundation are therefore tax deductible in the United States.

The People’s Currency Foundation is investigating the possibility of establishing an international umbrella organization based in a country with a more favorable regulatory climate towards cryptocurrency, to over see national affiliates in countries around the world, including the organization already existing in the US.

The People’s Currency Foundation is governed democratically by a board of directors. Currently, board members are chosen by the board itself, but the governance process may be changed in the future so that people can become members of the Foundation and vote for its leaders. This would likely be a process of multitier elections at local, national and international levels, after the Manna economic network has grown into the millions of participants. Voting may be conducted on the blockchain using decentralized, secure solutions for community governance.


The People’s Currency Foundation was legally incorporated in March 2015, under the name The Grantcoin Foundation. The name was changed in January 2018 as part of a rebranding process. The Manna currency, originally called Grantcoin, was launched to the public in May 2015. The project was founded by three socially conscious executives with diverse experience in nonprofit management, project management, entrepreneurship and startups, charities and religious ministry, and the emerging field of alternative digital currencies.

From the beginning Crantcoin (now Manna) was envisioned as a currency that would be designed to help create a more egalitarian, democratic, and sustainable global economy. The specific economic model of the currency gradually came into focus through deliberation of the founders, consultation with other people of conscience, and experimentation with several types of grant programs for social good. Starting in May 2016, the Grantcoin Foundation implemented the current model of the currency being distributed through a simple, universally available program of basic income, which thus far has been popular and sustainable.

Mannabase, Inc.

In January 2018, the founders of Manna incorporated a company called Mannabase Inc. to oversee technological development of the Mannabase platform. The founders funded this company with a large portion of their own personal holdings of Manna.

The People’s Currency Foundation has an operating agreement with Mannabase Inc., and technical personnel overlap considerably between the two entities. The founders intend to donate the company to become a wholly owned subsidiary of the Foundation, likely within the next three years.


In 2015, the founders of Manna created a cryptocurrency called Grantcoin, which would be primarily distributed as charitable grants by a nonprofit organization and backed in part by tax deductible donations to that nonprofit. The founders capitalized the project with donations of over $10,000 from their own savings, and ran it as a voluntear-based pilot study to determine:

Whether there was sufficient interest among the cryptocurrency investor community and the general public in a block chain based currency with a philanthropic mission to create a more equitable and sustainable world economy.

The most viable strategies for growth and development of such a currency and to prove implementation and formulate a road map for a globally scalable project.

After two years of bootstrapped development and experimentation, the evidence showed several things:

1. That there was indeed enough interest and support for such a project to make it worth pursuing in a highly professional way.

2. That focusing on gaining a large base of holders of the currency was necessary before any other goals could realistically be achieved, such as adoption by businesses and charities for payments and donations.

3. That giving the currency away according to the principle of Universal Basic Income was the most effective way to acquire a large base of holders, and ultimately users, of the currency.

4. That a referral bonus program was highly effective in generating rapid growth of the number of recipients of Grantcoin basic income. We conducted five distributions of basic income and referral bonuses during a period of just over one year, as follows:

a. June 30, 2016, 255 people

b. October 1, 2016, 757 people

c. January 31, 2017, 1,132 people

d. June 17, 2017, 2,511 people

e. August 9, 2017, 2,922 people

Most participants in the program have been referred by other participants, who earned a reward for the referrals, which is a formula for ongoing exponential growth. By September 1, 2017, more than 400 additional people had signed up and been approved for the next distribution, which will be of the rebranded Manna currency in early 2018.

5. That the currency can hold its value and gain value, despite large amounts of it being given away with no strings attached. This has proved to be true both during periods when the Grantcoin Foundation actively supported the price and also during periods when the Foundation did not do so. The “network effect” that the value of a tool for communications or transactions increases as the number of participants in its network increases has easily overcome price inflation due to expansion of the Grantcoin money supply. The value added by backing the currency with charitable donations has also proved to be significant, but perhaps actually more important for its psychological effect on stakeholders than strictly the Foundation’s financial input into the market.

6. That a large degree of automation was necessary to scale up the project into the thousands of users and beyond.

7. That sophisticated fraud detection mechanisms are necessary to prevent cheating by bad actors attempting to sign up multiple times under pseudonyms.

8. That a user friendly web based platform for receiving and transacting the currency is important to convert passive recipients into active users even for minimal levels of activity by ordinary, non technically inclined holders of the currency.

We discovered that user friendliness and intuitiveness of the front end design of the platform is an essential prerequisite for positive engagement with the currency among all but the most technologically gifted and highly motivated supporters, and that poor design (by a third party platform we experimented in partnering with) created a negative user experience and an inefficient use of time by Foundation personnel in communication with confused users.

In the summer of 2017, we took these lessons and applied them to our plans for relaunch of the project under the Manna brand. In late January 2018 we completed the rebranding process by updating the Grantcoin codebase and releasing Manna branded wallets that are fully compatible with the existing blockchain. Holders of Grantcoin have an equal number of tokens, now called Manna, in the new wallet. At block 1,100,000 (expected to be reached in May 2018), the blockchain is scheduled to fork and the old Grantcoin wallets will become deprecated and incompatible with the new Manna network.

Price and Market Cap

As of January 1, 2018, approximately 493 million Crantcoin was in circulation, At the currency’s price on that date (1,000 CRT = $8.47), the market cap of all Grantcoin in circulation was approximately $4.2 million.

During its history, Grantcoin has traded on two different public cryptocurrency exchanges. The market price of Crantcoin approximately doubled in 2015, more than doubled again in 2016, and increased more than 16-fold in 2017 for a total gain of over 8,000% through January 1, 2018, (Note: The price has continued to increase, with another doubling already in 2018, not shown on this chart.)


As of January 1, 2018, there were approximately 3,500 known stakeholders, i.e. owners of Grantcoin (Manna) currency, in more than 100 countries around the world, There were likely at least a couple hundred more people who own some of the currency which they have mined or bought on exchanges, whose identities are unknown.

The three founders owned a combined 19% of the Manna in circulation, most of which they intend to use for charitable purposes. Each of the founders have donated thousands of dollars and thousands of hours of volunteer work to the Manna project.

The founders previously owned a much larger percentage of the currency, but decided to reduce their holdings by providing 36% of the float to Mannabase Inc., a technology development company. This Manna will be used to compensate developers, either directly in Manna or through sales of the currency, and to pay for other necessary expenses associated with maintaining and improving the Mannabase platform.

Contributing stakeholders, such as private investors, donors, and independent contractors who were paid in Grantcoin for their work for the project, accounted for another approximately 17% of the currency in circulation at the beginning of 2018. There are several dozen such stakeholders in countries including the United States, Saudi Arabia, Brazil, England, South Korea, Egypt, ltaly, Austria, and various others.

About 13% of the float has been donated to charities and nonprofit organizations which have agreed to hold it for the long term and use it for purposes compatible with the mission and values of the People’s Currency Foundation. Some of these Charities were established by the founders and others are outside organizations with a long track record of success in their charitable missions.

About 6% has been given away as basic income and referral bonuses to roughly 3,000 people. This percentage will grow much larger over time, and will ultimately surpass all other categories.

The remaining 9% of the float was mined into circulation and is held by various unknown stakeholders, which may include the miners themselves and others they may have sold it to on public exchanges or sent it to in other transactions. This percentage of the currency in circulation will decrease over time, as the mining reward rate is being reduced as part of the transition from Grantcoin to Manna. Ultimately, we expect that less than 0.25% of circulating Manna will be created through mining.

For the most part, the People’s Currency Foundation does not keep track of what people and institutions do with their Manna. and it is likely that some of the currency that has been distributed into circulation to known stakeholders has already passed to other stakeholders who are unknown, as a result of private transactions or anonymous public sales on exchanges. However, the Foundation does have a policy that any founder, director or staff member must publicly disclose any sales of over one million Manna in a period of one month.

Economic Model

Manna is distributed into circulation primarily as a Universal Basic Income subsidy for anyone in the world who signs up and successfully completes a verification process to prove that they are a unique human being, Corporate entities are not eligible to receive the UBl. Manna basic income is distributed weekly into web based wallets on the Mannabase platform. Each verified individual receives an equal share of the amount being distributed each week.

Distribution of Grantcoin in Circulation (though January 1, 2018)

The People’s Currency Foundation also gives referral bonuses of the currency to people and organizations that refer others to sign up and verify their account for Manna basic income distribution. Our referral program does not use multi level marketing; it is only a bonus for direct referrals. The purpose of this program is to encourage exponential growth of the Manna user base, as awareness of Manna spreads through people’s personal connections, nonprofit organizations, charitable networks, and businesses’ customers who might later be able to spend the currency at participating businesses.

The People’s Currency Foundation has set the annual rate of increase of the Manna money supply through basic income distributions at 3.5% of the current supply of Manna in circulation. This is close to the historical average annual inflation rate of the US. dollar, one of the world’s most successful currencies, and results in an approximate doubling of the money supply every 20 years. Distributed equally as Universal Basic income, the increase in money supply would cut in half the general level of economic inequality every generation within the Manna economic network, all other factors held constant.

Another 2 to 3% per year is currently being added through referral bonuses. The referral bonus program will be phased out after ten years.

The annual rate of issuance of Manna may be changed by the Foundation as deemed necessary to balance the goals of egalitarian monetary distribution and preserving the currency’s value. So far, during the Grantcoin pilot program, this rate of growth of the money supply has proved to be very sustainable without any threat to the ability of the currency to hold or even gain value relative to other currencies.

Under our current economic model, the value of the currency is primarily determined by the free market. Manna trades on SouthXchange, an online cryptocurrency exchange based in Argentina, where people can buy and sell Manna for either Bitcoin or US, dollars. The People’s Currency Foundation will pursue listing for the Manna token on larger exchanges as well.

One unique feature of our economic model is that the value of the currency is backed not only by investors in the market, but also by donations to the People’s Currency Foundation. Our organization sets aside a minimal administrative budget, only what is necessary to keep the organization in existence and the project functional, and we use all donations beyond that to support the price of Manna on markets where it trades, through gradual buybacks of the token.

In the future, after our project is sufficiently capitalized, we plan to establish a Capital Reserve Fund with a diverse portfolio of investments. The profits from this fund will be used as an additional value backing mechanism for the Manna token. The fund’s portfolio will consist of a balance of securities (stocks and bonds), commodities (precious metals, energy, agricultural, etc), and currencies (including criptocurrencies), and will be professionally managed according to policies and algorithms developed by the People’s Currency Foundation based on historical data and expert advice.

Grantcoin began with a premined reserve of 10 billion coins, most of which was intended to be gradually distributed into circulation as charitable grants, such as the basic income program, over a period of decades. In the transition to Manna, we have decided to destroy approximately 75% of those coins, and we will implement a software update within the next few years to enable the gradual creation of new units of Manna needed for UBI distributions. The Foundation is retaining enough Manna in reserve to fund the UBI for up to ten years, but some of this may also be destroyed if we transition to gradual creation of the tokens at an earlier date, as we expect is likely,

The total supply of Manna, including all tokens that are currently in circulation or are held in reserve by the People’s Currency Foundation for release during the next ten years, is broken down into categories as follows:


Grantcoin was created as a modification of Peercoin, a well vetted and popular offshoot of Bitcoin. Grantcoin was rebranded to Manna but retains the same blockchain, which is powered by SHA 256 proof of work mining. The proof of stake aspect of the Peercoin codebase is turned off in Manna, but has been retained in our codebase for possible future implementation, pending study of its impact on our economic model and ways that staking rewards could be used for charitable purposes.

In 2018, we intend to transition to a more advanced, feature rich codebase, perhaps by incorporating some of the functionalities of Ethereum into our own blockchain. Also under consideration is to build an API for using Ethereum’s technology in association with the Manna blockchain. Ethereum is the second largest cryptocurrency by market cap (about $72 billion to Bitcoin’s $230 billion USD as of January 1, 2018). Ethereum’s smart contracts technology allows tokens to be governed by algorithmic rules for issuance, distribution, and execution of complex transactions. These features are well suited for the needs of the Manna project.

Manna is distributed to UBI recipients on Mannabase, an online platform where users may store and spend their Manna or transfer it to other users or to external wallets. Manna can also be transacted on Twitter, through simple tweets to deposit, withdraw. and send the currency to other Twitter users.


User-Friendly and Accessible

Mannabase is a website based on a simple core concept:

That everyone, everywhere in the world, should be able to participate in the cryptocurrency movement by receiving a Universal Basic Income in the form of the Manna currency, distributed on a regular basis into easy to use web based wallets on our platform.

To make cryptocurrency accessible to the general public, Mannabase will not only provide the currency as a basic right to all people who choose to participate, but will provide an intuitive, user friendly interface for transacting the currency.

Simplicity and user friendliness are key to the Mannabase philosophy. Most people have not yet adopted cryptocurrency, in large part because it has not yet become easily understandable and usable for the average person with little or no technical knowledge. Mannabase will correct this problem and empower millions of people to become new users of cryptocurrency specifically, the Manna currency that they will receive as basic income to help them get started and to improve their economic condition.

By providing people with currency and a simple and attractive platform to spend it, Mannabase will serve as a gateway to the exciting world of cryptocurrency for vast numbers of new users. By making it instantly accessible and easy to use, Mannabase will ensure that Manna will attain a large and growing market share among blockchain based tokens.

Signup and Referral System

The Mannabase user experience begins with an extremely simple signup form: entering your email address. If the email entered is unique, the new user will be asked to confirm their ownership of the address via email and prompted to select a username and password.

Once confirmed, the user will be taken to a “dashboard” page where they will see that the balance in their Manna wallet is zero, and they will be invited to sign up for distributions of Manna basic income. They will also be given a referral link which they can share with friends, on social media or elsewhere. The dashboard will show a count of how many new users they have referred to Mannabase, how many have been approved for Manna basic income, and how much Manna the referrer is eligible to receive in referral bonuses if they, likewise, are approved for UBI distribution.

The new user will be prompted to go through a verification process to confirm that they are a unique human being and after being approved, they will begin receiving weekly deposits of Manna basic income into their Mannabase wallet, plus however much they have earned in referral bonuses.

Each user receives the same amount of Manna in referral bonuses as the amount they receive in basic income, for each approved UBI recipient they have referred to the program during the past year. For example, a user who has 5 approved referrals will receive 6 times the amount of Manna per week that a user would receive who has no referrals.

Furthermore, if a new user signs up with a valid referral link or referral code, they will receive a 50% bonus in addition to their basic income distribution. Bonuses are given only for one year after each referral or signup occurs, to limit the financial advantage of participating in the referral system.

In the Grantcoin pilot program, we found that this specific referral system succeeded in generating exponential growth of our user base, because people are strongly incentivized to make referrals, and people are also incentivized to use the referral system when they sign up, so that referrals will actually be counted.

Anti-Fraud Strategies and Methods

The primary technical concern of any Universal Basic Income program must be to develop a viable “Proof of Humanity” system to ensure that people who sign up for the UBI are real, unique human beings, rather than fraudulent signups by the same users repeatedly with multiple pseudonyms. Combatting this type of fraud, known as Sybil attacks, is essential to the success of Manna or any other non governmental basic income program, which cannot rely on forcing people to submit identification documents to prove that they are who they say they are.

During the Grantcoin pilot study, we offered people the option of verifying their signup for the program using either a mobile phone or a government issued photo ID. Very few people chose the ID option, and some expressed worries about potential identity theft by our organization.

Furthermore, manually verifying signups by having a human staff member look at a submitted photo ID to determine its likelihood of authenticity is much more labor intensive than technological methods of verifying new users. Therefore, it became a high priority for us to develop an automated system of verification by phone with a relatively low rate of fraud.

Our anti fraud strategy at this stage is based on two aspects:

1. Requiring a real mobile phone, rather than a VOIP or landline. Multiple VOIP numbers can be generated easily for free, and many people have more than one landline, such as at home and at work, but most people have only one mobile phone. Therefore, for the average person, verifying that they have submitted a real, unique mobile phone number is sufficient to prevent multiple signups.

2. Some people who wish to try to beat the system may purchase multiple SIM cards or disposable mobile phones, thus faking the existence of multiple people. This is unlikely to be a problem now, because of the relatively small amount of economic value being distributed to each person receiving Manna basic income. However, this is likely to become more of a problem in the future, as the value of Manna increases by orders of magnitude. Therefore, we have implemented secondary algorithmic methods to detect whether a mobile phone number submitted is likely to be associated with a phone that is actually used by the same person who bought it, rather than a mobile phone number used only to sign up for Manna.

Using these methodologies, our study of the data from the Grantcoin pilot program indicates that we may have had a fraudulent signup rate of no more than 5%. In the future, however, we plan to implement a third method to detect and reduce fraud:

3. An algorithmic web of trust system, in which Mannabase users will be scored on their likelihood of being a real, unique human being, based on how they interact with the platform and other users. Users whose scores are too low may be required to submit documentary or biometric proof of identification and go through a manual approval process to continue receiving Manna basic income. We will also explore using blockchain based identity verification tokens such as Civic. The details of our system will remain proprietary, to prevent people from trying to game the system.

Automated Basic Income Distribution

Every Mannabase user who has passed the verification process and been approved for Manna UBI distributions will receive Manna in their wallet on the platform once per week. Each distribution occurs at a random time, to prevent users from all logging into Mannabase at the same time to check their balance and thus overloading the server.

Distributions of Manna basic income are fully automated. Once a user is approved for the program, they will be added to the recipient count, and the appropriate amount of Manna an equal amount per person will be calculated and sent into their wallet every week thereafter.

The amount each individual user receives per week will decrease as the total amount being distributed is divided among a growing user base. Referral bonuses will also be calculated and sent automatically to each user on a weekly basis.

Users may choose to automatically reallocate some or all of their Manna basic income and referral bonuses to other verified participants, either to all of them generally, or to specific users or groups of users selected according to user determined criteria. This option is intended for economically secure people who do not need a basic income subsidy, and prefer instead that it be distributed to others who may need it more. For example, a well off user in the United States might decide to allocate 40% of their basic income to their fellow citizens in Puerto Rico after a disastrous hurricane, 30% to children in the 10 countries with the lowest GDP in the world, 20% to a basket of their favorite charities on the platform, and 10% to all UBI recipients except themselves.

Searchable and Sortable User Profiles

Each Mannabase user whether an individual, nonprofit organization, or business, will be able to enter information about themselves, which will be displayed on their profile page and will be searchable and sortable by other users. Mannabase will provide a robust toolset for searching and sorting data from the user database, to find individual users, groups of users, and types of users that meet desired criteria.

For example, a Mannabase user wishing to spend some Manna to buy food or clothing from a socially responsible business could search for companies that are registered on the site which sell those categories of products. Or, a user who would like to donate to an environmental charity, a human rights organization, etc. could search and find organizations that fit those descriptions on the site and click a button on their profile page to make a donation in Manna.

Similarly, users will be able to search for individual basic income recipients who meet specific criteria or sets of criteria, and a Manna wallet address will be automatically generated and displayed, representing all of those people collectively. Such wallet addresses can be used for automatic reallocation of one’s basic income or other forms of targeted direct giving,

Targeted Direct Giving

Mannabase will store both user provided profile data as well as demographic data about the economic status of nations, regions, and the average person living in specific localities. Users wishing to verify their age, gender, geographical location, occupation, etc, on their profile must have other users confirm the accuracy of the information they submit. to prevent fraud (e.g. we don’t want wealthy American adults pretending to be impoverished African children).

The People’s Currency Foundation will also partner with well established charities that are working on the ground with specific people whom they have verified as being legitimately in need. Those people will be added to Mannabase as users with a special “verified needy” seal of approval.

All of this data will enable Mannabase users wishing to give Manna to the less fortunate, or to worthy charities and nonprofit organizations, to create a “giving portfolio” and automatically make donations quickly and easily, either by reallocating their basic income on a recurring basis or by giving extra Manna that they have purchased or received as income from selling goods and services. Wallet addresses will be generated by the platform, as needed, to represent specific groups of recipients, or even in specific proportions, to empower givers to transfer funds to their intended charitable beneficiaries in a simple and highly efficient manner. Complex transfers of funds will occur on the back end, using smart contract technology, without users needing to construct the transactions themselves.

Mannabase will thus be a powerful platform for blockchain based charitable giving, incorporating both Universal Basic Income as well as user friendly tools for effective altruism to targeted recipients.


Target Audience and Sectors

From the time of its inception as Grantcoin, the Manna project has always been about more than just giving away money. Although our team strongly believes in Universal Basic Income as the foundation of a new, more humane and equitable monetary system, we also believe that Manna can become the premier alternative currency of socially responsible business and the nonprofit sector.

This is a vast and growing segment of the economy. According to a 2017 study, 66% of consumers overall, and 73% of millennials, are willing to spend more on a product if it comes from a sustainable brand. Another study showed that 81% of global consumers say they seek out socially responsible products whenever possible. Furthermore, philanthropic giving for sustainable development accounts for nearly $8 billion USD per year on average, a large pool of resources from which capital could flow into Manna as an innovative way to provide economic opportunity for impoverished people and communities.

There is a wide opening in the cryptocurrency space for a project that pursues this socially conscious, humanitarian image and audience. Indeed, a token that can come to be seen and used as the “cryptocurrency of conscience” could realistically become one of the leading blockchain based currencies alongside Bitcoin and Ethereum.

One of the biggest challenges that crypto currencies have faced, which has impeded their adoption by the general public, is their largely negative image in the minds of most people, who view them as being driven primarily by a get rich quick mentality and as playthings of geeks and speculators rather than as tools for long term, universally beneficial social change, Manna, with its charitable values and mission, is uniquely positioned as a counterpoint to this negative public perception -which means it has both a specific market niche and arguably a greater potential for mass adoption than Bitcoin itself.

A large and growing percentage of society is looking for alternatives to what they perceive as corrupt socioeconomic institutions. Some look to Bitcoin, but many others do not, because they see Bitcoin as insufficiently designed to remedy the imbalances in the economy and society that have been produced by existing mainstream systems. Such people tend to be aligned with the movement for socially responsible business, eco friendly products, natural and locally produced foods, alternative health and personal development, the progressive arts and music scene, and nonprofit organizations such as charities and spiritual communities. These interests and values would tend to make them more receptive to Manna than to most other cryptocurrencies.

Tools and Incentives

The Mannabase platform will link holders of Manna currency with businesses where they can spend it and nonprofit organizations to which they can donate it. Thus, Mannabase will function as a much needed clearing house of information for “conscious consumers” and “people of conscience” in general, about businesses and organizations that may be especially worthy of their support. The People’s Currency Foundation will promote acceptance of payments and donations in Manna as a mark of distinction, signifying that the accepting institution is especially humane, sustainable. socially responsible, or progressive in its values.

Being listed on Mannabase may in and of itself prove to be a significant incentive for adoption of the currency by corporate entities whose customer or donorbase fits with the target audience of the Manna network. Beyond that, other incentives may also be needed, such as partnership grants or coupon programs. Manna to be used to encourage adoption by businesses and charities will come from the People’s Currency Foundation’s reserve (tokens reserved for partners and miscellaneous).

Technological tools will be utilized or developed to encourage merchant adoption, such as ecommerce plugins and donation buttons that can be deployed on websites, including full compatibility with popular web development platforms such as WordPress and Drupal. We will also study the possibilities for development of point of sale solutions for spending Manna at brick and mortar stores and establishments, or partnerships with providers of such tools that are in existence or under development for other cryptocurrencies. Whenever possible, we will seek to integrate Manna into the most promising and widely used multi-currency transaction tools already available, rather than duplicating the efforts of such projects.

Children’s Savings Program

One of the most compelling aspects of the development of the Manna economic network is our children’s savings account program. People of all ages, starting at birth, are eligible for Manna basic income distributions. Parents or legal guardians may sign up their children to receive basic income, if they provide a government is sued ID such as a birth certificate of the child.

The People’s Currency Foundation will also partner with charities that help orphans, which may sign them up for this program and provide demographic and economic data about these children in need. For example, we are already in discussions with two well established charities, in Cuatemala and Malawi, to establish pilot programs for this purpose.

Until a child reaches the age of 18, they will not be allowed to send funds out of their Mannabase wallet, but anyone may send Manna into it. Upon reaching 18, the wallet may be unlocked by the formerly minor child who has reached the age of majority, after providing sufficient proof of identity.

Children who accumulate Manna basic income for many years in this way will thus be provided with a large “basic capital’ grant upon reaching maturity, money which they can use to get a good start in their adult life, such as for college education, starting a business, or any other personal needs. This program will therefore create a loyal user base for Manna in the next generation, and will add to the incentives for socially conscious businesses to accept the currency, especially businesses whose customers are likely to be young people.


Current Known Impact

As of January 1, 2018, over $250,000 in Grantcoin (Manna) currency had been distributed so far as basic income and referral bonuses, to nearly 3,000 people in more than 100 countries around the world. The average recipient received approxi mately $85 in value, and some people have received hundreds, or even thousands of dollars. A large percentage of this value has been distributed to people in developing countries many of whom benefit greatly from relatively small amounts of money.

Grantcoin (Manna) has already given hope to numerous people in need. The majority of recipients are saving it for the future rather than cashing it out for Bitcoin, dollars, or their local currency. They understand that if they save it, and its value increases by orders of magnitude over time, it could become a significant nest egg to increase their standard of living or that of their children.

Although this project is still in its infancy, it is already having a noticeable impact on people’s lives. Numerous people from around the world write to the People’s Currency Foundation, expressing their gratitude for our work to create a new monetary system promoting economic justice and sustainability. For example:

“My entire household has received the Universal Basic Income. When I showed it (on my wallet) to them, the rush of hope among everyone was palpable. ” Rafael DI Liacco lndonesia

” I am working, going around colleges and universities, schools, etc, teaching people how to sign up for Grantcoin basic income. Young people in Sierra Leone are happy for this program. ” Osman Mansaray, Sierra Leone

“Grantcoin has come a long way [already] and its humanitarian spirit will continue to sustain and drive its successes. Love always. ” Simon D Bognet, Nigeria

The Grantcoin pilot project attracted significant interest and support from the Basic Income movement and activist community. For example, Eric Stetson, the founder of the project, spoke at the North American Basic Income Guarantee conference in New York in 2017. Grantcoin received positive coverage by Basic Income News ( and other blogs and journalists in the field.

The People’s Currency Foundation has an email list of over 10,000 people with an average open rate of over 25% for our mass emails and a Twitter account (@MannaCurrency) with over 5,000 followers. These numbers have been gained with almost no systematic marketing efforts by our organization or any other organizations on our behalf, and thus represent purely organic interest in the Manna project that has emerged mainly through word of mouth.

Manna has established itself as the clear leader in blockchain based Universal Basic Income. This momentum and first mover advantage, especially considering that the project has been mostly self funded by its core team and has done no paid advertising so far, makes a compelling case for the continued success and potential for explosive growth of the project.

Future Potential Impacts

Manna will demonstrate a proof of concept that Universal Basic Income can be implemented to meaningfully reduce poverty without increasing the burden of taxation by government. Our project will prove that though a grassroots, bottom up quantitative easing approach to monetary policy “helicopter money”, as distributed by a people powered alternative currency with populist and progressive values it is not necessary for governments to take from the rich and give to the poor. Instead, the people themselves can create alternative economic institutions with a built in, systemic design that gradually reduces the inequality of wealth and lifts people out of poverty through equitable distribution of newly created currency.

Manna will give rise to a new generation that prefers people powered, people empowering cryptocurrencies over traditional, debt based currencies issued by the for profit banking system. This new generation of “monetary consumers” will use the power of their freedom of choice to make monetary monopolies (i.e. government imposed fiat currencies) obsolete.

Manna could eventually become one of the leading cryptocurrencies in the world. because it is distributed as a Universal human right, and thus has the potential to acquire a much larger user base than most other alternative currencies including the vast number of people who comprise the “global poor,” who could never afford to acquire a meaningful amount of other forms of money.

If enough people use it, and if it gains the endorsement of major international charitable NGOs, Manna may come to be seen as a viable “people’s reserve currency,” in an era when the global hegemony of the US. dollar is increasingly being questioned. Manna can distribute economic power more widely and equitably among the nations of the world and their people. Thus, national governments, especially of developing countries, might consider diversifying their currency reserves into alternative currencies such as Manna that are designed to be compatible with the spirit of a global, forward looking civilization and the rights and needs of human beings in a high tech future.


Tax-Deductible Donations

As a 501(c)(3) tax exempt nonprofit organization, the People’s Currency Foundation may receive tax deductible donations from contributors in the United States. Contributors outside the United States may also donate to our organization, but must follow the applicable tax laws of their own country,

In 2017, the Grantcoin Foundation (now the People’s Currency Foundation) raised approximately $11,000 in donations from more than 80 donors around the world. This does not count additional funds raised through sales of Grantcoin.

The People’s Currency Foundation will continue to seek funding from our user base through donations, and will attempt to convert first time donors into recurring donors. As our user base grows, we expect that the amount of money we raise from donations will continue to grow along with it.

According to our current policy to allocate only a minimal administrative budget and use all donations beyond that to help back the price of Manna on the market (excluding donations as part of specific crowdfunding campaigns or fundraising drives), we are pursuing other sources of funding as well, to meet our organization’s growing needs for personnel, technology, marketing, etc.

Grants and Endowments

The People’s Currency Foundation seeks grants by charitable organizations to fund program development and increase our working capital to run the Manna project in general.

We also welcome endowments from philanthropists and estates. Large amounts of capital can be provided with instructions to be held by the Foundation in a Capital Reserve Fund that we intend to establish. Income from these investments will be used to fund the Foundation’s operations and, if enough is available, to provide further backing of the value of Manna.

Grassroots Crowdfunding Campaign

In the first quarter of 2018, the People’s Currency Foundation will launch a crowd funding campaign. This campaign will be designed to reach large numbers of people with an inspirational message about the world transforming potential of the Manna project, and is intended to grow our donor base with a large number of new, mostly small donors.

Requested donation amounts will range from $10 to $250, with specific rewards for each level of financial support. Rewards will include Manna branded apparel, instructional videos and technical support packages for learning to use cryptocurrency, sample wallets with small amounts of Manna currency, and an introductory book by founder Eric Stetson.

Eric has an agreement with an award winning publishing company that specializes in books about personal development and progressive social change” His book about Manna, to be published in summer 2018, will weave a powerful story of the history of money and how this new currency can change people’s lives and empower us to create a better future. Eric will take the book on a speaking tour to fundraise, raise awareness of the Manna project, and stimulate rapid growth and support among influencers in the fields of progressive spirituality, health and wellness, education, technology, sustainable business and socially responsible investing.

This campaign will aim to raise at least $50,000, to be used to fund basic operating expenses in 2018.

Sales of Manna

Mannabase. Inc. may sell Manna from its holdings on an ongoing basis to fund technology development of the Mannabase platform and other administrative expenses. This is not an ICC, and all sales will be conducted in compliance with applicable laws and regulations.

Capital Reserve Fund

When the People’s Currency Foundation is sufficiently capitalized, we will establish a Capital Reserve Fund consisting of a well balanced investment portfolio. Profits from this fund will provide an ongoing revenue stream for our organization, enabling us to become less reliant on donations or other methods of fundraising.

Ultimately, our goal is to use 100% of donations to back the market value of Manna, and to have a large enough capital reserve so that all of the Foundation’s financial needs can be covered by profits generated by our investment fund, without needing to use any of the principal. If our capital reserve grows large enough and generates more profits than needed each year, we will use the remainder as additional backing for Manna on the market.

Growing our capital reserve fund is therefore a key goal. which will ensure the long term financial sustainability of our organization, and can help Manna become a robustly asset backed currency capable of sustaining a multi billion dollar market cap with continued growth of its money supply for basic income distributions.

Why Bitcoin is Stupid – Pete Adeney. 

Well, shit. I’ve been watching this situation for a few years, and assuming it would just blow over so we wouldn’t have to talk about it here in this place where we are supposed to be busy improving our lives.

But a collective insanity has sprouted around the new field of ‘cryptocurrencies’, causing a totally irrational worldwide gold rush. It has reached the point that a big percentage of stories in the financial news and questions in Mr. Money Mustache’s email inbox are about whether or not we should all ‘invest’ in BitCoin.

We’ll start with the answer: No, you should not invest in Bitcoin. The reason is that it’s not an investment. Just like gold, tulip bulbs, Beanie Babies, 1999 dotcoms without any hope of a product plan, “pre-construction pricing” Toronto condominiums you have no intent to occupy or rent out, and rare baseball cards are not investments.

These are all things that people have bought in the past, and driven to completely irrational prices, not because they did anything useful or produced any money and value to society, but solely because they thought they would be able to sell them to someone else for more in the future.

When you make this kind of purchase, which you should never do, you are speculating, which is not a useful activity. You’re playing a psychological, win-lose battle against other humans with money as the only objective. Even if you win some money through dumb luck, you have lost some time and life energy, which means you have lost.

Investing means buying an asset that actually creates products and services and cashflow for an extended period of time. Like a piece of a profitable business or a rentable piece of real estate. An investment is something that has intrinsic value – that is, it would be worth owning from a financial perspective, even if you could never sell it.

Now, with that moral sermon out of the way, we might as well talk about why Bitcoin has become such a big thing, so we can separate the usefulness of the underlying technology called “Blockchain”, from the mania about how people have turned Bitcoin it into a big dumb lottery.

This separation is important because the usefulness of Blockchain is the primary justification people use for the big dumb Bitcoin lottery.

Once you make this separation in your mind, you can see that Blockchain is a simply a nifty new software invention (which is open-source and free for anyone to use), whereas Bitcoin is just one well-known way to use it.

Blockchain is just a computer protocol, which allows two people (or machines) to do transactions even if they don’t trust each other or the network between them. It can have applications in the monetary system, contracts, and even as a component in higher level protocols like sharing files. But it’s not some spectacular Instant Trillionaire piece of magic.

As a real world comparison, I quote this nifty piece from a reader named The Unassuming Banker:

… imagine that someone had found a cure for cancer and posted the step-by-step instructions on how to make it on-line, freely available for anyone to use.

Now imagine that the same person also created a product called Cancer-Pill using their own instructions, trade marked it, and started selling it to the highest bidders.

I think we can all agree a cure for cancer is immensely valuable to society (blockchain may or may not be, we still have to see), however, how much is a Cancer-Pill worth?

Our Banker friend goes on to explain that the first Cancer-Pill might initially see some great sales. Prices would rise, especially if the supply of these pills was limited (just as an artificial supply limit is built right into the Bitcoin algorithm.)

But since the formula is open and free, other companies would quickly come out with their own cancer pills. Cancer-Away, CancerBgone, CancEthereum, and any other number of competitors would spring up. Anybody can make a pill, and it costs only a few cents per dose.

And yet imagine everybody started bidding up Cancer-Pills, to the point that they cost $17,000 each and fluctuate widely in price, seemingly for no reason. Because of this, newspapers start reporting on prices daily, triggering so many tales of instant riches that you notice even your barber and your massage therapist are offering tips on how to invest in this new “asset class”.

But instead of seeing how ridiculous this is, even more people start piling in and bidding up every new variety of pills (cryptocurrency), over and over and on and on, until they are some of the most “valuable” things on the planet.

NO, right?

And yet this is exactly what’s happening with Bitcoin. And if you haven’t been digging into the cryptocurrency world much, it gets way weirder than this. Take a look at this shot from the website, and observe the preposterous herd behavior in real life:

“Holy Shit!” is the only reasonable reaction. You’ve got Bitcoin with a market value of $234 Billion Dollars, then Ripple at $92 billion with Ethereum right behind at $85,792,800,592.
These are preposterous numbers. The imaginary value of these valueless bits of computer data represents enough money to change the course of the entire human race, for example eliminating all poverty or replacing the entire world’s 800 gigawatts of coal power plants with solar generation. Why? WHY???

An Aside: Why should we listen to you, Mustache?

I’m only a mediocre computer scientist. But coincidentally, after I got my computer engineering degree I ended up specializing in security and encryption technologies for most of my career. So I did learn a bit about locking and unlocking information, hacking, and ensuring that independent brains (whether they are two adjacent CPUs on a circuit board or two companies negotiating across the Pacific) can trust each other and coordinate their actions in lockstep. I even read about these things for fun, with Simon Singh’s The Code Book and the Neil Stephenson novel Cryptonomicon being particularly fun shortcuts to pick up some of the workings and the context of cryptography.

But that’s just the software side (Blockchain). Bitcoin (aka CancerPills) has become an investment bubble, with the complementary forces of Human herd behavior, greed, fear of missing out, and a lack of understanding of past financial bubbles amplifying it.

Mustachianism – the mental training that gets you to very early financial freedom – requires you to evaluate inefficiencies in our culture and call bullshit upon them. Even if you are the only one in the room willing to do it.

In the field of personal wealth, this means walking your children past the idling lineup of your neighbors’ Mercedes SUVs, over the snowy grass and up to the door of the school – and being confident that you are doing the right thing. Even if you’re the only one doing it.

When evaluating investment bubbles, it means looking at where everyone is throwing their money – no matter how many billions – and being willing to say “Bull. Shit. Guys. Not going to do this with you.”

So I also read a lot about investment bubbles and fundamentals and how to tell those apart. One book that I found very useful in understanding the greed-fear cycle (and Central Banking and the Federal Reserve system to boot) is the 2001 classic Towards Rational Exuberance by Mark Smith. For a shortcut to understanding good investing, you can also simply look up Warren Buffet’s thinking on almost any topic – he’s careful enough about offering opinions that by the time he makes a statement on something, you can be pretty sure it will be among the best answers out there.

And of course, the purpose of this whole aside is that I want to establish credibility with you, so you will give this article some consideration. I believe the current Cryptocurrency “investment” mania is a huge waste of human energy, and our rate of waste has been growing exponentially.

The sooner we debunk the myth and come to our senses, the richer our world will be. So we need more credible people to speak out against it. If you’re one of these credible people, please do so in the comments or in a blog post on Medium that we can all read.

Why was Bitcoin Even Invented?

Understanding the motivation is a big part of understanding Bitcoin. As the legend goes, an anonymous developer published this whitepaper in 2008 under the fake name Satoshi Nakamoto. It’s well written and pretty obviously by a real software and math person. But it also has some ideology built in – the assumption that giving national governments the ability to monitor flows of money in the financial system and use it as a form of law enforcement is wrong.

This financial libertarian streak is at the core of Bitcoin, and you’ll hear echoes of that sentiment in all the pro-crypto blogs and podcasts. The sensible-sounding ones will say, “Sure the G20 nations all have stable financial systems, but Bitcoin is a lifesaver in places like Venezuela where the government can vaporize your wealth when you sleep.”

The harder-core pundits say “Even the US Federal Reserve is a bunch ‘a’ CROOKS, stealing your money via INFLATION, and that nasty Fiat Currency they issue is nothing but TOILET PAPER!!”

It’s all the same stuff that people say about Gold, which is also a totally irrational waste of human investment energy.

Government-issued currencies have value because they represent human trust and cooperation. There is no wealth and no trade without these two things, so you might as well go all-in and trust people. There are no financial instruments that will protect you from a world where we no longer trust each other.

So, Bitcoin is a protocol invented to solve a money problem that simply does not exist in the rich countries, which is where most of the money is. Sure, an anonymous way to exchange money and escape the eyes of a corrupt government is a good thing for human rights. But at least 98% of MMM readers do not live in countries where this is an issue.

So just relax, lean into it, and grow rich with me.

OK, But What if Bitcoin Becomes the World Currency?

The other argument for Bitcoin’s “value” is that there will only ever be 21 million of them, and they will eventually replace all other world currencies, or at least become the “new gold”, so the fundamental value is either the entire world’s GDP or at least the total value of all gold, divided by 21 million.

People then go on to say, “If there’s even a ONE PERCENT CHANCE that this happens, Bitcoins are severely undervalued and they should really be worth, like, at least a quadrillion dollars each!!”

This is not going to happen. After all, you could make the same argument about Mr. Money Mustache’s fingernail clippings: they may have no intrinsic value, but at least they are in limited supply so let’s use them as the new world currency!

Why not somebody else’s fingernail clippings? Why not one of the other 1500 cryptocurrencies? Shut up, just send me $100 via PayPal and I’ll send you a bag of my fingernail clippings.

Let’s get this straight: in order for Bitcoin to be a real currency, it needs several things:

– easy and frictionless trading between people

– to be widely accepted as legal tender for all debts, public and private

– a stable value that does not fluctuate (otherwise it’s impossible to set prices)

Bitcoin has none of these things, and even safely storing it is difficult (see Mt. Gox, Bitfinex, and the various wallets and exchanges that have been hacked)

The second point is also critical: Bitcoin is only valuable if it truly becomes a critical world currency. In other words, if you truly need it to buy stuff, and thus you need to buy coins from some other person in order to conduct important bits of world commerce that you can’t do any other way. Right now, the only people driving up the price are other speculators. The bitcoin price isn’t rising because people are buying the coins to conduct real business. It’s rising because people are buying it up, hoping someone else will buy it at an even higher price later. It’s only valuable when you cash it out to a real currency again, like the US dollar, and use it to buy something useful like a nice house or a business. When the supply of foolish speculators dries up, the value evaporates – often very quickly.

Also, a currency should not be artificially sparse. It needs to expand with the supply of goods and services in the world, otherwise we end up with deflation and hoarding. It also helps to have wise, centralized humans (the Federal Reserve system and other central banks) guiding the system. In a world of human trust, putting the wisest and most respected people in a position of Adult Supervision is a useful tactic.

Finally, nothing becomes a good investment just because “it’s been going up in price lately.”

If you disagree with me on that point, the price of my fingernails has just increased by 70,000% and they are now $70,000 per bag. Quick, get me that money on PayPal before you miss out on any more of this incredible “performance!”

The world’s governments are not going to let everyone start trading money anonymously and evading taxes using Bitcoin. If cryptocurrency does take off, it will be in a government-backed form, like a new “Fedcoin” or “G20coin.” Full anonymity and government evasion will not be one of its features.

And you don’t want it for this purpose anyway – after all, do you currently hide your money in offshore tax havens and transact your business on black markets? Do you practice illegal tax evasion as your primary wealth strategy? Probably not, because life is better and wealthier when you aren’t living a life of crime.

The Cryptocurrency bubble is really a replay of the past: A good percentage of Humans are prone to mass delusions which lead to irrational behavior. This is a known bug in our operating system, and we have designed some parts of our society to protect us against it.

These days, stocks are regulated by the SEC, precisely because in the olden days, there were many, many stocks issued that were much like Bitcoin. Marketed to unsophisticated investors as a get-rich-quick scheme. The very definition of an unsophisticated investor is “Being more willing to buy something, the more its price goes up.”

Don’t be one of these fools.

Mr Money Mustache 

The Guardian view on cryptocurrencies: a greater fool’s gold

The apparently endless rise in the prices of cryptocurrencies is a monument to greed and gullibility.

Last month a plague of kittens brought down one of the most fashionable cryptocurrencies on the internet. This might not have been news, except that the cryptocurrency, Ethereum, bills itself as “the world computer” – a distributed program that can replace large parts of both the legitimate banking system and the legal system itself, since contracts can be written into computer code. 

Unless, that is, Ethereum becomes the plaything of an imaginary kitten. Like all other cryptocurrencies that have appeared in the wake of bitcoin, and like bitcoin itself, Ethereum is useless as a medium of exchange because the price fluctuates violently and unpredictably. 

But it turns out to be an excellent medium for the propagation of imaginary kittens and when a small Canadian company introduced a game that let players buy and breed cartoon cats, the resulting popularity brought the whole network briefly to its knees. Had Ethereum been a real currency, this would have been as if the Beanie Baby craze of the last century had crashed the world’s credit card system. 

But of course Ethereum is not a real currency, and neither is bitcoin; nor are Ripple, Monero, Litecoin, Dogecoin, or any of the other thousands of cryptocurrencies that are the focus of intense speculation today.

They are the latest manifestation of the eternal dream that we could, by magic, become really rich really quickly. Why, if only you had bought bitcoin a year ago, they would now be worth 16 or 17 times as much, or, last week, only 13 times as much. What could possibly go wrong?

Nonetheless the bubble must one day pop and the fool’s gold vanish, leaving only fools.

The central paradox of all these currencies is that we’re told they have eliminated the need for trust between humans and replaced it by mathematical guarantees; but all their tradeable value depends on blind faith and ignorance of computer code. 

Only last week a Google researcher discovered a hole in some software widely used to store bitcoins which would leak all their contents to any suitably malicious webpage that the owner visited. This had in fact been pointed out to the developers months ago, but they had not bothered to fix it. 

Flaws in the code of Ethereum led to the theft of $30m in the summer of 2016 and the disappearance of $170m last autumn, though all these sums are entirely notional. Even software built by gigantic, legitimate companies can turn out to have catastrophic bugs in it, as we learned last week from the publication of the Meltdown and Spectre flaws, which between them affect almost all modern computer chips.

There is even less reason to trust software developed by small teams of programmers who hope both to become insanely rich and to circumvent all efforts by governments to control them – and that is how all cryptocurrencies have been built. 
But there is not much use in sober realism here. So long as ordinary people can expect to make their fortunes overnight, they will step up to the gaming table and play – at least while the cryptokittens are away.

The Bank of England is planning a bitcoin-style virtual currency, but could it really replace cash? –  Bill Buchanan. * What is cryptocurrency: 21st-century unicorn, or the money of the future? – BlockGeeks. 

Governments are extremely worried about cryptocurrencies such as bitcoin. These virtual currencies mean you can make payments without involving the banks that most economies and government financial models are built on. People can transfer large amounts of money without the authorities knowing, potentially making it easier to evade tax or launder money.

So several countries’ central banks, including the Bank of England and the Bank of Israel, are reportedly planning to launch their own digital currencies. This could help lure people back into using an official system that combines some of the benefits of both traditional and crypto- currencies. But the risks involved may be too great for many typical cash users to bear.

One of the major drawbacks of existing cryptocurrencies is that their value tends to swing widely and it is often difficult to pinpoint how much they are really worth. National cryptocurrencies would be tied to the value of the country’s official currency, making them less volatile and easier to actually use as a way of spending.

National cryptocurrencies would also make payments much faster because transactions would be recorded instantly and wouldn’t have to be cleared by a bank (although some implementations require around eight minutes to be verified). The existing systems for electronic payments and transfers can often involve several banks and companies sending each other data and running security checks that add time and expense to transactions. Cryptocurrencies are able to bypass this clearing process altogether because they don’t actually involve transfers from one entity to another.

Cryptocurrencies don’t actually involve transfers from one entity to another.

Instead they use a technology known as a blockchain, which keeps a public but encrypted record of all transactions. Basically, as illustrated in the figure below, the payer (in this case, Bob) signs a transaction to agree to pay someone (Alice) a given amount. The transaction is then validated using Bob’s personal encryption code known as his “private key”. If the transaction is valid, it is added onto the blockchain, recording how much money Alice and Bob now have.

Outline of traditional transactions and blockchain based ones. 

Because all transactions would be recorded in this way, the government would have much greater oversight of who is paying whom and how much, helping to crack down on financial crime. Unfortunately, because transactions on blockchain ledger are typically kept as a public record, it might also be possible for other people to access this information and see how much you or anyone else is spending and what you’re buying.

Your money might also be at greater risk if it’s stored as a cryptocurrency. Currently banks guard your wealth and will always release it if you can prove your identity, while credit card companies insure you against fraud. If your bank account is hacked, there is a good chance you will get your money back. But cryptocurrencies store money in independent digital wallets that can be lost or broken into. If that happens there is no one who can help you.

Currency needs trust

For a typical shopper, there would be little difference between using a national cryptocurrency and something like Apple Pay, which makes payments at the click of a trusted application on a mobile device. I love using Apple Pay on my iPhone to purchase my coffee in the morning, as well as my bus tickets and even my parking. I now have little use of cash and only carry around my credit cards in a wallet as a backup in case my battery fails.

Having found out over Christmas that most supermarkets now do not have a limit on Apple Pay, I see it as one of the most trusted methods of payment, especially as I trust the fingerprint scanner on my phone. I also know that my bank is involved in the transaction. So I believe the days of paper money – and even carrying around cards – are rapidly fading. Our mobile phone and our trust in our apps provide us with more trusted ways of making transactions.

But Apple Pay is still backed up by trusted financial institutions. The step to cryptocurrency may be one step too far for most people. Few people would actually understand the risks of storing the cryptocurrency in a digital wallet and could leave themselves open to losing all their money.

I believe that most countries will deal with cryptocurrencies by regulating them and monitoring their use rather than co-opting them. But it will be interesting to see whether regulation or competition will win in the battle of crytocurrencies. While the encryption of crytocurrencies can create strong digital trust in the technology, human trust in the transactions themselves will likely be the key factor that determines whether citizens adopt government-backed cryptocurrencies.

The Conversation 


What is cryptocurrency: 21st-century unicorn, or the money of the future?

This introduction explains the most important thing about cryptocurrencies. After you‘ve read it, you‘ll know more about it than most other humans.

Today cryptocurrencies have become a global phenomenon known to most people. While still somehow geeky and not understood by most people, banks, governments and many companies are aware of its importance.

In 2016, you‘ll have a hard time finding a major bank, a big accounting firm, a prominent software company or a government that did not research cryptocurrencies, publish a paper about it or start a so-called blockchain-project.

But beyond the noise and the press releases the overwhelming majority of people – even bankers, consultants, scientists, and developers – have a very limited knowledge about cryptocurrencies. They often fail to even understand the basic concepts.

So let‘s walk through the whole story. What are cryptocurrencies?

  • Where did cryptocurrency originate?
  • Why should you learn about cryptocurrency?
  • And what do you need to know about cryptocurrency?

What is cryptocurrency and how cryptocurrencies emerged as a side product of digital cash

Few people know, but cryptocurrencies emerged as a side product of another invention. Satoshi Nakamoto, the unknown inventor of Bitcoin, the first and still most important cryptocurrency, never intended to invent a currency.

In his announcement of Bitcoin in late 2008, Satoshi said he developed “A Peer-to-Peer Electronic Cash System.“

His goal was to invent something; many people failed to create before, digital cash.

Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It’s completely decentralized with no server or central authority.  – Satoshi Nakamoto, 09 January 2009, announcing Bitcoin on SourceForge.

The single most important part of Satoshi‘s invention was that he found a way to build a decentralized digital cash system. In the nineties, there have been many attempts to create digital money, but they all failed.

… after more than a decade of failed Trusted Third Party based systems (Digicash, etc), they see it as a lost cause. I hope they can make the distinction, that this is the first time I know of that we’re trying a non-trust based system. – Satoshi Nakamoto in an E-Mail to Dustin Trammell

After seeing all the centralized attempts fail, Satoshi tried to build a digital cash system without a central entity. Like a Peer-to-peer network for file sharing.

This decision became the birth of cryptocurrency. They are the missing piece Satoshi found to realize digital cash. The reason why is a bit technical and complex, but if you get it, you‘ll know more about cryptocurrencies than most people do. So, let‘s try to make it as easy as possible:

To realize digital cash you need a payment network with accounts, balances, and transaction. That‘s easy to understand. One major problem every payment network has to solve is to prevent the so-called double spending: to prevent that one entity spends the same amount twice. Usually, this is done by a central server who keeps record about the balances.

In a decentralized network, you don‘t have this server. So you need every single entity of the network to do this job. Every peer in the network needs to have a list with all transactions to check if future transactions are valid or an attempt to double spend.

But how can these entities keep a consensus about this records?

If the peers of the network disagree about only one single, minor balance, everything is broken. They need an absolute consensus. Usually, you take, again, a central authority to declare the correct state of balances. But how can you achieve consensus without a central authority?

Nobody did know until Satoshi emerged out of nowhere. In fact, nobody believed it was even possible.

Satoshi proved it was. His major innovation was to achieve consensus without a central authority. Cryptocurrencies are a part of this solution – the part that made the solution thrilling, fascinating and helped it to roll over the world.

What are cryptocurrencies really?

If you take away all the noise around cryptocurrencies and reduce it to a simple definition, you find it to be just limited entries in a database no one can change without fulfilling specific conditions. This may seem ordinary, but, believe it or not: this is exactly how you can define a currency.

Take the money on your bank account: What is it more than entries in a database that can only be changed under specific conditions? You can even take physical coins and notes: What are they else than limited entries in a public physical database that can only be changed if you match the condition that you physically own the coins and notes? Money is all about a verified entry in some kind of database of accounts, balances, and transactions.

How miners create coins and confirm transactions

Let‘s have a look at the mechanism ruling the databases of cryptocurrencies. A cryptocurrency like Bitcoin consists of a network of peers. Every peer has a record of the complete history of all transactions and thus of the balance of every account.

A transaction is a file that says, “Bob gives X Bitcoin to Alice“ and is signed by Bob‘s private key. It‘s basic public key cryptography, nothing special at all. After it’s signed, a transaction is broadcast in the network, sent from one peer to every other peer. This is basic p2p-technology. Nothing special at all, again.

The transaction is known almost immediately by the whole network. But only after a specific amount of time it gets confirmed.

Confirmation is a critical concept in cryptocurrencies. You could say that cryptocurrencies are all about confirmation.

As long as a transaction is unconfirmed, it is pending and can be forged. When a transaction is confirmed, it is set in stone. It is no longer forgeable, it can‘t be reversed, it is part of an immutable record of historical transactions: of the so-called blockchain.

Only miners can confirm transactions. This is their job in a cryptocurrency-network. They take transactions, stamp them as legit and spread them in the network. After a transaction is confirmed by a miner, every node has to add it to its database. It has become part of the blockchain.

For this job, the miners get rewarded with a token of the cryptocurrency, for example with Bitcoins. Since the miner‘s activity is the single most important part of cryptocurrency-system we should stay for a moment and take a deeper look on it.

What are miners doing?

Principally everybody can be a miner. Since a decentralized network has no authority to delegate this task, a cryptocurrency needs some kind of mechanism to prevent one ruling party from abusing it. Imagine someone creates thousands of peers and spreads forged transactions. The system would break immediately.

So, Satoshi set the rule that the miners need to invest some work of their computers to qualify for this task. In fact, they have to find a hash – a product of a cryptographic function – that connects the new block with its predecessor. This is called the Proof-of-Work. In Bitcoin, it is based on the SHA 256 Hash algorithm.

You don‘t need to understand details about SHA 256. It‘s only important you know that it can be the basis of a cryptologic puzzle the miners compete to solve. After finding a solution, a miner can build a block and add it to the blockchain. As an incentive, he has the right to add a so-called coinbase transaction that gives him a specific number of Bitcoins. This is the only way to create valid Bitcoins.

Bitcoins can only be created if miners solve a cryptographic puzzle. Since the difficulty of this puzzle increases the amount of computer power the whole miner’s invest, there is only a specific amount of cryptocurrency token that can be created in a given amount of time. This is part of the consensus no peer in the network can break.

Revolutionary properties

If you really think about it, Bitcoin, as a decentralized network of peers which keep a consensus about accounts and balances, is more a currency than the numbers you see in your bank account. What are these numbers more than entries in a database – a database which can be changed by people you don‘t see and by rules you don‘t know?

Basically, cryptocurrencies are entries about token in decentralized consensus-databases. They are called CRYPTOcurrencies because the consensus-keeping process is secured by strong cryptography. Cryptocurrencies are built on cryptography. They are not secured by people or by trust, but by math. It is more probable that an asteroid falls on your house than that a bitcoin address is compromised.

Describing the properties of cryptocurrencies we need to separate between transactional and monetary properties. While most cryptocurrencies share a common set of properties, they are not carved in stone.

Transactional properties:

1.) Irreversible: After confirmation, a transaction can‘t be reversed. By nobody. And nobody means nobody. Not you, not your bank, not the president of the United States, not Satoshi, not your miner. Nobody. If you send money, you send it. Period. No one can help you, if you sent your funds to a scammer or if a hacker stole them from your computer. There is no safety net.

2.) Pseudonymous: Neither transactions nor accounts are connected to real-world identities. You receive Bitcoins on so-called addresses, which are randomly seeming chains of around 30 characters. While it is usually possible to analyze the transaction flow, it is not necessarily possible to connect the real world identity of users with those addresses.

3.) Fast and global: Transaction are propagated nearly instantly in the network and are confirmed in a couple of minutes. Since they happen in a global network of computers they are completely indifferent of your physical location. It doesn‘t matter if I send Bitcoin to my neighbour or to someone on the other side of the world.

4.) Secure: Cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency. Strong cryptography and the magic of big numbers makes it impossible to break this scheme. A Bitcoin address is more secure than Fort Knox.

5.) Permissionless: You don‘t have to ask anybody to use cryptocurrency. It‘s just a software that everybody can download for free. After you installed it, you can receive and send Bitcoins or other cryptocurrencies. No one can prevent you. There is no gatekeeper.

Monetary properties:

1.) Controlled supply: Most cryptocurrencies limit the supply of the tokens. In Bitcoin, the supply decreases in time and will reach its final number somewhere in around 2140. All cryptocurrencies control the supply of the token by a schedule written in the code. This means the monetary supply of a cryptocurrency in every given moment in the future can roughly be calculated today. There is no surprise.

2.) No debt but bearer: The Fiat-money on your bank account is created by debt, and the numbers, you see on your ledger represent nothing but debts. It‘s a system of IOU. Cryptocurrencies don‘t represent debts. They just represent themselves. They are money as hard as coins of gold.

To understand the revolutionary impact of cryptocurrencies you need to consider both properties. Bitcoin as a permissionless, irreversible and pseudonymous means of payment is an attack on the control of banks and governments over the monetary transactions of their citizens. You can‘t hinder someone to use Bitcoin, you can‘t prohibit someone to accept a payment, you can‘t undo a transaction.

As money with a limited, controlled supply that is not changeable by a government, a bank or any other central institution, cryptocurrencies attack the scope of the monetary policy. They take away the control central banks take on inflation or deflation by manipulating the monetary supply.

Cryptocurrencies: Dawn of a new economy

Mostly due to its revolutionary properties cryptocurrencies have become a success their inventor, Satoshi Nakamoto, didn‘t dare to dream of it. While every other attempt to create a digital cash system didn‘t attract a critical mass of users, Bitcoin had something that provoked enthusiasm and fascination. Sometimes it feels more like religion than technology.

Cryptocurrencies are digital gold. Sound money that is secure from political influence. Money that promises to preserve and increase its value over time. Cryptocurrencies are also a fast and comfortable means of payment with a worldwide scope, and they are private and anonymous enough to serve as a means of payment for black markets and any other outlawed economic activity.

But while cryptocurrencies are more used for payment, its use as a means of speculation and a store of value dwarfs the payment aspects. Cryptocurrencies gave birth to an incredibly dynamic, fast-growing market for investors and speculators. Exchanges like Okcoin, poloniex or shapeshift enables the trade of hundreds of cryptocurrencies. Their daily trade volume exceeds that of major European stock exchanges.

At the same time, the praxis of Initial Coin Distribution (ICO), mostly facilitated by Ethereum‘s smart contracts, gave live to incredibly successful crowdfunding projects, in which often an idea is enough to collect millions of dollars. In the case of “The DAO” it has been more than 150 million dollars.

In this rich ecosystem of coins and tokens, you experience extreme volatility. It‘s common that a coin gains 10 percent a day – sometimes 100 percent – just to lose the same the next day. If you are lucky, your coin‘s value grows up to 1000 percent in one or two weeks.

While Bitcoin remains by far the most famous cryptocurrency and most other cryptocurrencies have zero non-speculative impact, investors and users should keep an eye on several cryptocurrencies. Here we present the most popular cryptocurrencies of today.


The one and only, the first and most famous cryptocurrency. Bitcoin serves as a digital gold standard in the whole cryptocurrency-industry, is used as a global means of payment and is the de-facto currency of cyber-crime like darknet markets or ransomware. After seven years in existence, Bitcoin‘s price has increased from zero to more than 650 Dollars, and its transaction volume reached more than 200.000 daily transactions.

There is not much more to say: Bitcoin is here to stay.


The brainchild of young crypto-genius Vitalik Buterin has ascended to the second place in the hierarchy of cryptocurrencies. Different to Bitcoin, it’s blockchain does not only validate a set of accounts and balances but also of so-called states. This means that Ethereum can not only process transactions but complex contracts and programs.

This flexibility makes Ethereum the perfect instrument for blockchain application. But it comes at a cost. After the Hack of the DAO – an Ethereum based smart contract – the developers decided to do a hard fork without consensus, which resulted in the emergence  of Ethereal Classic. Besides this, there are several clones of Ethereum, and Ethereal itself is a host of several Tokens like DigixDAO and Augur. This makes Ethereum more a family of cryptocurrencies than a single currency.


Maybe the least popular – or most hated – project in the cryptocurrency community is Ripple. While Ripple has a native cryptocurrency – XRP – it is more about a network to process IOUs than the cryptocurrency itself. XRP, the currency, doesn‘t serve as a medium to store and exchange value, but more as a token to protect the network against spam.

Ripple Labs created every XRP-token, the company running the Ripple network, and is distributed by them at will. For this reason, Ripple is often called pre-mined in the community and dissed as no real cryptocurrency, and XRP is not considered a good store of value.

Banks, however, seem to like Ripple. At least they are adopt the system with increasing pace.


Litecoin was one of the first cryptocurrencies after Bitcoin and tagged as the silver to the digital gold bitcoin. Faster than bitcoin, with a larger amount of tokens and a new mining algorithms, Litecoin was a real innovation, perfectly tailored to be the smaller brother of bitcoin. “It facilitated the emergence of several other cryptocurrencies which used its codebase but made it, even lighter“. Examples are Dogecoin or Feathercoin.

While Litecoin failed to find a real use and lost its second place after bitcoin, it is still actively developed and traded and is hoarded as a backup if Bitcoin fails.


Monero is the most prominent example of the cryptonite algorithm. This algorithm was invented to add the privacy features Bitcoin is missing. If you use Bitcoin, every transaction is documented in the blockchain and the trail of transactions can be followed. With the introduction of a concept called ring-signatures, the cryptonite algorithm was able to cut through that trail.

The first implementation of cryptonite, Bytecoin, was heavily premined and thus rejected by the community. Monero was the first non-premined clone of bytecoin and raised a lot of awareness. There are several other incarnations of cryptonote with their own little improvements, but none ever achieved the same popularity as Monero.

Monero’s popularity peaked in summer 2016 when some darkness markets decided to accept it as a currency. This resulted in a steady increase in the price, while the actual usage of Monero seems to remain disappointingly small.

Besides those, there are hundreds of other cryptocurrencies of several families. Most of them are nothing more than attempts to reach investors and quickly make money, but a lot of them promise playgrounds to test innovations in cryptocurrency-technology.

What is the future of Cryptocurrency?

The market of cryptocurrencies is fast and wild. Nearly every day new cryptocurrencies emerge, old die, early adopters get wealthy and investors lose money. Every cryptocurrency comes with a promise, mostly a big story to turn the world around. Few survive the first months, and most are pumped and dumped by speculators and live on as zombie coins until the last bagholder loses hope ever to see a return on his investment.

Markets are dirty. But this doesn‘t change the fact that cryptocurrencies are here to stay – and here to change the world. This is already happening. People all over the world buy Bitcoin to protect themselves against the devaluation of their national currency. Mostly in Asia, a vivid market for Bitcoin remittance has emerged, and the Bitcoin using darknets of cybercrime are flourishing. More and more companies are discovering the power of Smart Contracts or tokens on Ethereum, the first real-world application of blockchain technologies to emerge.

The revolution is already happening. Institutional investors are starting to buy cryptocurrencies. Banks and governments are realizing that this invention has the potential to draw their control away. 

Cryptocurrencies change the world. Step by step. You can either stand aside and observe – or you can become part of history in the making.

Block Geeks

The Truth About Block Chain – Marco Iansiti and Karim R. Lakhani. 

Harvard Business Review, January 2017

Contracts, transactions, and the records of them are among the defining structures in our economic, legal, and political systems. They protect assets and set organizational boundaries. They establish and verify identities and chronicle events. They govern interactions among nations, organizations, communities, and individuals. They guide managerial and social action. And yet these critical tools and the bureaucracies formed to manage them have not kept up with the economy’s digital transformation. They’re like a rush-hour gridlock trapping a Formula 1 race car. In a digital world, the way we regulate and maintain administrative control has to change.

Blockchain promises to solve this problem. The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically. 

How Blockchain Works

Here are five basic principles underlying the technology.

1. Distributed Database

Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.

2. Peer-to-Peer Transmission

Communication occurs directly between peers instead of through a central node. Each node stores and forwards information to all other nodes.

3. Transparency with Pseudonymity

Every transaction and its associated value are visible to anyone with access to the system. Each node, or user, on a blockchain has a unique 30-plus-character alphanumeric address that identifies it. Users can choose to remain anonymous or provide proof of their identity to others. Transactions occur between blockchain addresses.

4. Irreversibility of Records

Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence the term “chain”). Various computational algorithms and approaches are deployed to ensure that the recording on the database is permanent, chronologically ordered, and available to all others on the network.

5. Computational Logic

The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. So users can set up algorithms and rules that automatically trigger transactions between nodes.

With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.

Indeed, virtually everyone has heard the claim that blockchain will revolutionize business and redefine companies and economies. Although we share the enthusiasm for its potential, we worry about the hype. It’s not just security issues (such as the 2014 collapse of one bitcoin exchange and the more recent hacks of others) that concern us. Our experience studying technological innovation tells us that if there’s to be a blockchain revolution, many barriers—technological, governance, organizational, and even societal—will have to fall. It would be a mistake to rush headlong into blockchain innovation without understanding how it is likely to take hold.

True blockchain-led transformation of business and government, we believe, is still many years away. That’s because blockchain is not a “disruptive” technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly. Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum. That insight and its strategic implications are what we’ll explore in this article.

Patterns of Technology Adoption

Before jumping into blockchain strategy and investment, let’s reflect on what we know about technology adoption and, in particular, the transformation process typical of other foundational technologies. One of the most relevant examples is distributed computer networking technology, seen in the adoption of TCP/IP (transmission control protocol/internet protocol), which laid the groundwork for the development of the internet.

Introduced in 1972, TCP/IP first gained traction in a single-use case: as the basis for e-mail among the researchers on ARPAnet, the U.S. Department of Defense precursor to the commercial internet. Before TCP/IP, telecommunications architecture was based on “circuit switching,” in which connections between two parties or machines had to be preestablished and sustained throughout an exchange. To ensure that any two nodes could communicate, telecom service providers and equipment manufacturers had invested billions in building dedicated lines.

TCP/IP turned that model on its head. The new protocol transmitted information by digitizing it and breaking it up into very small packets, each including address information. Once released into the network, the packets could take any route to the recipient. Smart sending and receiving nodes at the network’s edges could disassemble and reassemble the packets and interpret the encoded data. There was no need for dedicated private lines or massive infrastructure. TCP/IP created an open, shared public network without any central authority or party responsible for its maintenance and improvement.

Traditional telecommunications and computing sectors looked on TCP/IP with skepticism. Few imagined that robust data, messaging, voice, and video connections could be established on the new architecture or that the associated system could be secure and scale up. But during the late 1980s and 1990s, a growing number of firms, such as Sun, NeXT, Hewlett-Packard, and Silicon Graphics, used TCP/IP, in part to create localized private networks within organizations. To do so, they developed building blocks and tools that broadened its use beyond e-mail, gradually replacing more-traditional local network technologies and standards. As organizations adopted these building blocks and tools, they saw dramatic gains in productivity.

TCP/IP burst into broad public use with the advent of the World Wide Web in the mid-1990s. New technology companies quickly emerged to provide the “plumbing”—the hardware, software, and services needed to connect to the now-public network and exchange information. Netscape commercialized browsers, web servers, and other tools and components that aided the development and adoption of internet services and applications. Sun drove the development of Java, the application-programming language. As information on the web grew exponentially, Infoseek, Excite, AltaVista, and Yahoo were born to guide users around it.

Once this basic infrastructure gained critical mass, a new generation of companies took advantage of low-cost connectivity by creating internet services that were compelling substitutes for existing businesses. CNET moved news online. Amazon offered more books for sale than any bookshop. Priceline and Expedia made it easier to buy airline tickets and brought unprecedented transparency to the process. The ability of these newcomers to get extensive reach at relatively low cost put significant pressure on traditional businesses like newspapers and brick-and-mortar retailers.

Relying on broad internet connectivity, the next wave of companies created novel, transformative applications that fundamentally changed the way businesses created and captured value. These companies were built on a new peer-to-peer architecture and generated value by coordinating distributed networks of users. Think of how eBay changed online retail through auctions, Napster changed the music industry, Skype changed telecommunications, and Google, which exploited user-generated links to provide more relevant results, changed web search.

Companies are already using blockchain to track items through complex supply chains.

Ultimately, it took more than 30 years for TCP/IP to move through all the phases—single use, localized use, substitution, and transformation—and reshape the economy. Today more than half the world’s most valuable public companies have internet-driven, platform-based business models. The very foundations of our economy have changed. Physical scale and unique intellectual property no longer confer unbeatable advantages; increasingly, the economic leaders are enterprises that act as “keystones,” proactively organizing, influencing, and coordinating widespread networks of communities, users, and organizations.

The New Architecture

Blockchain—a peer-to-peer network that sits on top of the internet—was introduced in October 2008 as part of a proposal for bitcoin, a virtual currency system that eschewed a central authority for issuing currency, transferring ownership, and confirming transactions. Bitcoin is the first application of blockchain technology.

The parallels between blockchain and TCP/IP are clear. Just as e-mail enabled bilateral messaging, bitcoin enables bilateral financial transactions. The development and maintenance of blockchain is open, distributed, and shared—just like TCP/IP’s. A team of volunteers around the world maintains the core software. And just like e-mail, bitcoin first caught on with an enthusiastic but relatively small community.

TCP/IP unlocked new economic value by dramatically lowering the cost of connections. Similarly, blockchain could dramatically reduce the cost of transactions. It has the potential to become the system of record for all transactions. If that happens, the economy will once again undergo a radical shift, as new, blockchain-based sources of influence and control emerge.

Consider how business works now. Keeping ongoing records of transactions is a core function of any business. Those records track past actions and performance and guide planning for the future. They provide a view not only of how the organization works internally but also of the organization’s outside relationships. Every organization keeps its own records, and they’re private. Many organizations have no master ledger of all their activities; instead records are distributed across internal units and functions. The problem is, reconciling transactions across individual and private ledgers takes a lot of time and is prone to error.

For example, a typical stock transaction can be executed within microseconds, often without human intervention. However, the settlement—the ownership transfer of the stock—can take as long as a week. That’s because the parties have no access to each other’s ledgers and can’t automatically verify that the assets are in fact owned and can be transferred. Instead a series of intermediaries act as guarantors of assets as the record of the transaction traverses organizations and the ledgers are individually updated.

In a blockchain system, the ledger is replicated in a large number of identical databases, each hosted and maintained by an interested party. When changes are entered in one copy, all the other copies are simultaneously updated. So as transactions occur, records of the value and assets exchanged are permanently entered in all ledgers. There is no need for third-party intermediaries to verify or transfer ownership. If a stock transaction took place on a blockchain-based system, it would be settled within seconds, securely and verifiably. (The infamous hacks that have hit bitcoin exchanges exposed weaknesses not in the blockchain itself but in separate systems linked to parties using the blockchain.)

A Framework for Blockchain Adoption

If bitcoin is like early e-mail, is blockchain decades from reaching its full potential? In our view the answer is a qualified yes. We can’t predict exactly how many years the transformation will take, but we can guess which kinds of applications will gain traction first and how blockchain’s broad acceptance will eventually come about.

How Foundational Technologies Take Hold

The adoption of foundational technologies typically happens in four phases. Each phase is defined by the novelty of the applications and the complexity of the coordination efforts needed to make them workable. Applications low in novelty and complexity gain acceptance first. Applications high in novelty and complexity take decades to evolve but can transform the economy. TCP/IP technology, introduced on ARPAnet in 1972, has already reached the transformation phase, but blockchain applications (in red) are in their early days.

In our analysis, history suggests that two dimensions affect how a foundational technology and its business use cases evolve. The first is novelty—the degree to which an application is new to the world. The more novel it is, the more effort will be required to ensure that users understand what problems it solves. The second dimension is complexity, represented by the level of ecosystem coordination involved—the number and diversity of parties that need to work together to produce value with the technology. For example, a social network with just one member is of little use; a social network is worthwhile only when many of your own connections have signed on to it. Other users of the application must be brought on board to generate value for all participants. The same will be true for many blockchain applications. And, as the scale and impact of those applications increase, their adoption will require significant institutional change.

We’ve developed a framework that maps innovations against these two contextual dimensions, dividing them into quadrants. (See the exhibit “How Foundational Technologies Take Hold.”) Each quadrant represents a stage of technology development. Identifying which one a blockchain innovation falls into will help executives understand the types of challenges it presents, the level of collaboration and consensus it needs, and the legislative and regulatory efforts it will require. The map will also suggest what kind of processes and infrastructure must be established to facilitate the innovation’s adoption. Managers can use it to assess the state of blockchain development in any industry, as well as to evaluate strategic investments in their own blockchain capabilities.

Single use.

In the first quadrant are low-novelty and low-coordination applications that create better, less costly, highly focused solutions. E-mail, a cheap alternative to phone calls, faxes, and snail mail, was a single-use application for TCP/IP (even though its value rose with the number of users). Bitcoin, too, falls into this quadrant. Even in its early days, bitcoin offered immediate value to the few people who used it simply as an alternative payment method. (You can think of it as a complex e-mail that transfers not just information but also actual value.) At the end of 2016 the value of bitcoin transactions was expected to hit $92 billion. That’s still a rounding error compared with the $411 trillion in total global payments, but bitcoin is growing fast and increasingly important in contexts such as instant payments and foreign currency and asset trading, where the present financial system has limitations.


The second quadrant comprises innovations that are relatively high in novelty but need only a limited number of users to create immediate value, so it’s still relatively easy to promote their adoption. If blockchain follows the path network technologies took in business, we can expect blockchain innovations to build on single-use applications to create local private networks on which multiple organizations are connected through a distributed ledger.

Much of the initial private blockchain-based development is taking place in the financial services sector, often within small networks of firms, so the coordination requirements are relatively modest. Nasdaq is working with, one of many blockchain infrastructure providers, to offer technology for processing and validating financial transactions. Bank of America, JPMorgan, the New York Stock Exchange, Fidelity Investments, and Standard Chartered are testing blockchain technology as a replacement for paper-based and manual transaction processing in such areas as trade finance, foreign exchange, cross-border settlement, and securities settlement. The Bank of Canada is testing a digital currency called CAD-coin for interbank transfers. We anticipate a proliferation of private blockchains that serve specific purposes for various industries.


The third quadrant contains applications that are relatively low in novelty because they build on existing single-use and localized applications, but are high in coordination needs because they involve broader and increasingly public uses. These innovations aim to replace entire ways of doing business. They face high barriers to adoption, however; not only do they require more coordination but the processes they hope to replace may be full-blown and deeply embedded within organizations and institutions. Examples of substitutes include cryptocurrencies—new, fully formed currency systems that have grown out of the simple bitcoin payment technology. The critical difference is that a cryptocurrency requires every party that does monetary transactions to adopt it, challenging governments and institutions that have long handled and overseen such transactions. Consumers also have to change their behavior and understand how to implement the new functional capability of the cryptocurrency.

A recent experiment at MIT highlights the challenges ahead for digital currency systems. In 2014 the MIT Bitcoin Club provided each of MIT’s 4,494 undergraduates with $100 in bitcoin. Interestingly, 30% of the students did not even sign up for the free money, and 20% of the sign-ups converted the bitcoin to cash within a few weeks. Even the technically savvy had a tough time understanding how or where to use bitcoin.

One of the most ambitious substitute blockchain applications is Stellar, a nonprofit that aims to bring affordable financial services, including banking, micropayments, and remittances, to people who’ve never had access to them. Stellar offers its own virtual currency, lumens, and also allows users to retain on its system a range of assets, including other currencies, telephone minutes, and data credits. Stellar initially focused on Africa, particularly Nigeria, the largest economy there. It has seen significant adoption among its target population and proved its cost-effectiveness. But its future is by no means certain, because the ecosystem coordination challenges are high. Although grassroots adoption has demonstrated the viability of Stellar, to become a banking standard, it will need to influence government policy and persuade central banks and large organizations to use it. That could take years of concerted effort.


Into the last quadrant fall completely novel applications that, if successful, could change the very nature of economic, social, and political systems. They involve coordinating the activity of many actors and gaining institutional agreement on standards and processes. Their adoption will require major social, legal, and political change.

“Smart contracts” may be the most transformative blockchain application at the moment. These automate payments and the transfer of currency or other assets as negotiated conditions are met. For example, a smart contract might send a payment to a supplier as soon as a shipment is delivered. A firm could signal via blockchain that a particular good has been received—or the product could have GPS functionality, which would automatically log a location update that, in turn, triggered a payment. We’ve already seen a few early experiments with such self-executing contracts in the areas of venture funding, banking, and digital rights management.

The implications are fascinating. Firms are built on contracts, from incorporation to buyer-supplier relationships to employee relations. If contracts are automated, then what will happen to traditional firm structures, processes, and intermediaries like lawyers and accountants? And what about managers? Their roles would all radically change. Before we get too excited here, though, let’s remember that we are decades away from the widespread adoption of smart contracts. They cannot be effective, for instance, without institutional buy-in. A tremendous degree of coordination and clarity on how smart contracts are designed, verified, implemented, and enforced will be required. We believe the institutions responsible for those daunting tasks will take a long time to evolve. And the technology challenges—especially security—are daunting.

Guiding Your Approach to Blockchain Investment

How should executives think about blockchain for their own organizations? Our framework can help companies identify the right opportunities.

For most, the easiest place to start is single-use applications, which minimize risk because they aren’t new and involve little coordination with third parties. One strategy is to add bitcoin as a payment mechanism. The infrastructure and market for bitcoin are already well developed, and adopting the virtual currency will force a variety of functions, including IT, finance, accounting, sales, and marketing, to build blockchain capabilities. Another low-risk approach is to use blockchain internally as a database for applications like managing physical and digital assets, recording internal transactions, and verifying identities. This may be an especially useful solution for companies struggling to reconcile multiple internal databases. Testing out single-use applications will help organizations develop the skills they need for more-advanced applications. And thanks to the emergence of cloud-based blockchain services from both start-ups and large platforms like Amazon and Microsoft, experimentation is getting easier all the time.

Localized applications are a natural next step for companies. We’re seeing a lot of investment in private blockchain networks right now, and the projects involved seem poised for real short-term impact. Financial services companies, for example, are finding that the private blockchain networks they’ve set up with a limited number of trusted counterparties can significantly reduce transaction costs.

Organizations can also tackle specific problems in transactions across boundaries with localized applications. Companies are already using blockchain to track items through complex supply chains, for instance. This is happening in the diamond industry, where gems are being traced from mines to consumers. The technology for such experiments is now available off-the-shelf.

Developing substitute applications requires careful planning, since existing solutions may be difficult to dislodge. One way to go may be to focus on replacements that won’t require end users to change their behavior much but present alternatives to expensive or unattractive solutions. To get traction, substitutes must deliver functionality as good as a traditional solution’s and must be easy for the ecosystem to absorb and adopt. First Data’s foray into blockchain-based gift cards is a good example of a well-considered substitute. Retailers that offer them to consumers can dramatically lower costs per transaction and enhance security by using blockchain to track the flows of currency within accounts—without relying on external payment processors. These new gift cards even allow transfers of balances and transaction capability between merchants via the common ledger.

Blockchain could slash the cost of transactions and reshape the economy.

Transformative applications are still far away. But it makes sense to evaluate their possibilities now and invest in developing technology that can enable them. They will be most powerful when tied to a new business model in which the logic of value creation and capture departs from existing approaches. Such business models are hard to adopt but can unlock future growth for companies.

Consider how law firms will have to change to make smart contracts viable. They’ll need to develop new expertise in software and blockchain programming. They’ll probably also have to rethink their hourly payment model and entertain the idea of charging transaction or hosting fees for contracts, to name just two possible approaches. Whatever tack they take, executives must be sure they understand and have tested the business model implications before making any switch.

Transformative scenarios will take off last, but they will also deliver enormous value. Two areas where they could have a profound impact: large-scale public identity systems for such functions as passport control, and algorithm-driven decision making in the prevention of money laundering and in complex financial transactions that involve many parties. We expect these applications won’t reach broad adoption and critical mass for at least another decade and probably more.

Transformative applications will also give rise to new platform-level players that will coordinate and govern the new ecosystems. These will be the Googles and Facebooks of the next generation. It will require patience to realize such opportunities. Though it may be premature to start making significant investments in them now, developing the required foundations for them—tools and standards—is still worthwhile.


In addition to providing a good template for blockchain’s adoption, TCP/IP has most likely smoothed the way for it. TCP/IP has become ubiquitous, and blockchain applications are being built on top of the digital data, communication, and computation infrastructure, which lowers the cost of experimentation and will allow new use cases to emerge rapidly.

With our framework, executives can figure out where to start building their organizational capabilities for blockchain today. They need to ensure that their staffs learn about blockchain, to develop company-specific applications across the quadrants we’ve identified, and to invest in blockchain infrastructure.

But given the time horizons, barriers to adoption, and sheer complexity involved in getting to TCP/IP levels of acceptance, executives should think carefully about the risks involved in experimenting with blockchain. Clearly, starting small is a good way to develop the know-how to think bigger. But the level of investment should depend on the context of the company and the industry. Financial services companies are already well down the road to blockchain adoption. Manufacturing is not.

No matter what the context, there’s a strong possibility that blockchain will affect your business. The very big question is when.


Marco Iansiti is the David Sarnoff Professor of Business Administration at Harvard Business School, where he heads the Technology and Operations Management Unit and the Digital Initiative.

Karim R. Lakhani is the Charles Edward Wilson Professor of Business Administration and the Dorothy and Michael Hintze Fellow at Harvard Business School. He is also the founding director of the Harvard Innovation Science Laboratory.

Harvard Business Review