Recently we’ve received a few questions from people who signed up for Grantcoin Basic Income about how much the grants are worth and how the currency will gain value. This article provides quick answers to these important questions.
Each year, the Grantcoin Foundation plans to grow the money supply by distributing an additional 3.5% of units of our currency to add to the Grantcoin already in circulation, plus referral bonuses to encourage people to spread the word about Grantcoin. A rough estimate of the amount of Grantcoin that will be distributed in these ways in the first year of the program (September 2016 through June 2017, four quarterly installments) is 30 million GRT. The price of Grantcoin when this article was published (May 9, 2016) is about $0.00012 per GRT. If the price of the currency stays the same, that means we expect to distribute about $3,600 worth of Grantcoin in year one.
So, if 100 people sign up for Grantcoin Basic Income, the average participant can expect to receive a value of $36 for the year. If 1,000 people sign up, then it would be $3.60. But keep in mind, this is what the value of the grants would be if the price of Grantcoin remains what it is today. In reality, if a thousand people sign up, the price of Grantcoin may rise significantly. (Update: As of June 6, the price of GRT is about 4 times higher.)
The Grantcoin Foundation does not make any predictions about the price of our currency, and we hope you’ll read our legal disclaimer. Having said that, here are some relevant points to consider:
- Whenever people donate to the Grantcoin Foundation, we generally use 80% of the value of donations to support the value of Grantcoin on the market — i.e. buying Grantcoin at the market price — so that our Basic Income grants can attain and retain a robust level of economic value for recipients. Only 20% of the value of donations are reserved for our organization’s administrative expenses.
- The more people sign up for Grantcoin Basic Income, that means more people are finding out about Grantcoin. Some of those people will likely become donors and/or investors. According to the well-known principle called the network effect, the more people who become participants in a network such as Grantcoin (or the telephone, fax machine, email, Facebook, or any network of users of a social technology), the more useful and valuable it becomes for everyone involved. The network effect predicts that growth of value is exponential even if growth of participants is linear — so if Grantcoin follows this model, the value of Grantcoin Basic Income for each recipient could be expected to grow over time, even as more and more people join the program. In theory, if a million people join, the value each person receives would probably be much more than if only a thousand join, despite that the same amount of Grantcoin would be distributed overall.
- Grantcoin hasn’t received much interest yet from cryptocurrency investors. In fact, Grantcoin has an extremely low market cap compared to most other serious cryptocurrencies. Even relatively small amounts of investor interest in this currency — let’s say 1%, or even just 0.1% of the investment that has gone into Bitcoin — would likely cause the price of Grantcoin to rise by orders of magnitude. We are not predicting this will necessarily happen, but if it does, Grantcoin Basic Income could be worth much more to recipients than it is now. It’s important to remember that the Grantcoin project in its current form is in its infancy. Few people know about it and few people have bought into it yet. More likely than not, this situation is temporary.
Grantcoin might gain participants, utility, and value in a slow-and-steady growth pattern. Or there might be tipping points and quantum leaps which will come suddenly and unpredictably. Tipping point type of events that could happen at some unknown time in the future, to propel Grantcoin to a much higher level of growth and value, include:
- Endorsement of Grantcoin by a well-established organization that advocates for Universal Basic Income, with resulting mass signup by their membership. The Grantcoin Foundation will be pursuing these relationships in the near-term.
- Partnership with a well-established charity to sign up financially disadvantaged people and communities for Grantcoin. We will be pursuing these relationships in the near-term.
- Major buy-in, such as a large investment or donation, by a very wealthy person who believes in economic reform and/or innovative approaches to philanthropy. Basic income and blockchain are both ideas that are attracting an increasing amount of attention and financial support, so this is not far fetched that it could happen within a couple of years if Grantcoin shows steady growth.
- Interest in Grantcoin by a small nation or reform-minded politician looking for innovative ways to break free of the unjust system of international finance. If the government of even one tiny Pacific island nation or impoverished small African country started signing up its people for Grantcoin, that would be huge. If a politician in a country such as Greece or Iceland mentioned Grantcoin as an idea worth considering, that would also be huge. Such developments might be years away, but not outside the realm of possibility if Grantcoin starts to gain traction as a grassroots movement.
The bottom line is this: Grantcoin can reasonably be expected to grow and gain value if it grows and gains value. The more people that get involved, the more people will want to get involved. The more it becomes a social movement, the more people will want to join the movement. The more people buy into the currency, the more people will feel comfortable buying it and using it. It’s the kind of thing that will become a positive feedback loop — if it catches on at all.
So, if you want Grantcoin Basic Income to become a thing, sign up for it, invite others to sign up, donate, and exchange other currencies for Grantcoin. We, the people of the world, are responsible for making Universal Basic Income happen. Let’s do it!