"Hey! Check out my Circles profile!"
If you mix with various cryptocurrency communities on a daily basis, you will most likely see the above sentence in these two days (usually there will be a link behind it). What new thing is this? Did Circle launch any new products? Can you stud?
In fact, the above sentence is a repost that comes with the system when a new project called Circles activates the account. Circles is not related to Circle. Its founder is Martin Köppelmann and the founder of the prediction market platform Gnosis.
Circles was officially launched yesterday, and on the first day it received the attention and discussion of V God, Hayden Adams (founder of Uniswap) and other big players. What exactly does this project do? What magic power does it have? Check it out with Planet Daily.
Let’s try to define Circles by ourselves. Let’s call it a "social UBI currency network" for the time being. Importing offline "trust relationships" into the chain is the core logic of this project.
UBI
Before understanding what Circles is, let's review what UBI is. The full English name of UBI is Universal Basic Income, which is the so-called "universal basic income plan." To explain UBI in the simplest terms, the government sends money to residents. Each resident receives the same amount, and no qualifications or conditions are required to obtain this money.
The concept of UBI was born a long time ago. In modern history, many famous figures such as Martin Luther King and Hawking are all supporters of UBI. Today, as the global gap between the rich and the poor widens and the purchasing power of inflation-adjusted income declines, UBI is becoming more and more popular. Although many countries have tried UBI, even during the epidemic this year, the U.S. government also tried to "spend money for all." But for now, it is difficult for UBI to break the concept of country. The lack of international cooperation prevents UBI from becoming a global plan.
Because of the fairness and transparency of the blockchain, many UBI projects in the currency circle have received attention before, such as Humanity Dao. Coincidentally, it has also been recommended by V God, including the project that was once called "the first airdrop in the currency circle" The heroic death of ENU avocado etc.
These beautiful projects have encountered many problems in their implementation and failed to really operate. However, there has been a lot of discussion on the advantages and disadvantages of UBI on the Internet. In this article, we will not expand, and mainly focus on the discussion of Circles. Can its unique design support its vision of establishing UBI on the chain.
Currency network
With the development of blockchain and smart contract technology, for the first time in human history, we have the technical conditions to create a global, decentralized financial application. Bitcoin proves that currency does not need to be issued by the central government, and what Circles wants to prove is that UBI does not need to be led by the government.
As mentioned in the definition above, Circles is a currency network consisting of many different currencies. Without any permission, everyone can join Circles using a blockchain account. When a user joins Circles, the Circles smart contract will create and allocate a personal currency for the user. for example:
When Alice joins Circles, she will get Alice coin on her behalf;
Bob has also joined Circles and will also receive Bob coin on his behalf.
All creation, distribution and additional issuance of personal currency will be executed according to the same rules.
Each independent user will continuously obtain the corresponding personal currency, that is, each personal currency will maintain a certain inflation rate, which is the only way to create a new money supply. Different users can acquire new currencies at exactly the same speed, which means that new currencies will always be consistent in additional issuance and will be evenly distributed to all members in the system.
Continue to give examples:
Assume that Circles' current issuance rate is 1 coin/minute (only hypothetical data, the current actual data is 8 coins/day, and the annual inflation rate is 7%).
Alice joined Circles and created AliceCoin;
Five minutes later, Alice will have 5 Alice Coins. At this time, Bob joined the system and created Bob Coin;
In another five minutes, Alice will have 10 Alice Coins and Bob will have 5 Bob Coins.
Alice saw that her friend's wallet balance was too low, so she gave her 5 Alice Coins to Bob.
After another five minutes, Alice will have 10 Alice Coins, Bob will have 10 Bob Coins and 5 Alice Coins.
At this time, someone may ask, UBI requires everyone to get the same amount of money. If Alice does not transfer money to Bob, will Bob always get less money than Alice?
It may be true in absolute numbers, but in fact, the relative balance between Alice and Bob’s assets has been shrinking. If Alice did not transfer to Bob, then Alice will now have 15 Alice Coins in his hand and Bob will have 10 Bob Coin, 10:15=2:3, is closer than 1:2 (5:10) five minutes ago. As the timeline stretches, the relative difference in the amount of money the two obtains will become smaller and smaller.
From the perspective of wealth distribution, this also means that the total amount of wealth acquired by everyone will get closer and closer.
Social attributes
One of the most essential functions of money is the medium of exchange.
Circles hopes to achieve this function through social means. In order to give each individual currency practicality, not to let it become a useless number. Circles introduced the concept of "Trust", where users can choose to trust each other's personal currencies to facilitate transactions. When the user clicks on "Trust" and chooses to trust the personal currency of other people, it is equivalent to telling the system that the selected personal currency is equivalent to any other currency they already own. This means that anyone who owns this trusted currency can trade that currency with their own currency (not necessarily their own) at a 1:1 exchange rate.
Give another example:
Bob believes in Alice, Alice believes in Carol;
Carol needs to pay Bob 5 personal currency;
Carol can use 5 Carol Coins to exchange 5 Alice Coins in Alice's hands, and then pay them to Bob.
"Trust" revocable, once revoked, meaning that choose not to accept others to use this personal goods currency to exchange currency in their hands, but the same time, hold them in their hands revoked trust money, and still Others who trust this currency conduct transactions.
Continue to give examples:
After the above transaction occurred, Bob and Alice broke up and no longer believed in Alice;
At this time, Bob still has 5 Alice Coins in his hand.
Others can no longer use Alice Coin to exchange for Bob Coin in the hands of Bob, but Bob can use Alice Coin in his hand to trade with other people who trust Alice in exchange for other currencies he wants to hold.
Due to the transitivity of social networks, the availability of personal currency will increase with the continuous expansion of social networks. If a user can be well integrated into the Circles network and can establish a large number of mutual trust relationships with other users, his personal currency will also It can better serve as a trading medium.
Circles mentioned the Six Degrees of Separation (Six Degrees of Separation)-everyone can know any stranger in the world through up to five people. This is also the theoretical basis for Circles to realize the transformation from a social network to a trading network. As more and more users join and more and more mutual trust relationships are established, Circles will become a real currency trading network.
Risk response
Speculators are never absent.
In the real world, if the government decides to implement UBI, one of the big problems it will solve is how to avoid fraud.
In the virtual world, this problem is even more serious, because everyone can freely create a large number of blockchain accounts, and Circles distinguishes identities through accounts. If this problem is not solved, then in theory one person A large number of different personal tokens can be obtained, and fairness cannot be discussed. In fact, the social attributes of Circles can perfectly solve this problem, because currency transactions must be transmitted through social networks. Let us continue with an example:
Bob trusts Alice, that is, accepts all Alice Coins;
Alice was unscrupulous, created a fake account secretly, and trusted the fake account herself (ie accepting fake currency);
Alice now has 10 Alice Coins, but there are actually 10 counterfeit coins secretly;
Alice wants to buy some goods worth 10 currency units from Bob;
No matter which account Alice uses, she must pay Alice Coin when she finally buys the goods, and the counterfeit currency cannot complete the transaction.
This example proves that if Alice wants to complete the transaction, she can only pay in the currency that other users choose to trust. Even if Alice opens 100 fake accounts and makes them trust each other, she can never spend more currency than the Alice Coin she owns, because Alice Coin is the only currency that other users trust. This is why users need to be cautious of all mutual trust relationships, because a wrong trust establishment may result in the loss of all your funds (currency).
Of course... if you are energetic, play ten roles each, and build your own social network, then think I didn’t say...
How to participate
Currently, people can sign up through Circles' official website (Sign Up), and the specific process can be completed in accordance with the official guidance. It should be noted that there are currently two specific conditions required to activate the account: 1. The trust of three friends is required (some users report that this step is no longer necessary for new registration); 2. A small amount of xDAI is required.
At present, many users are "seeking mutual trust" on major social media platforms in order to quickly complete account activation. However, as mentioned above, a false trust establishment may result in the loss of all your funds (currency), so users Be cautious; as to why xDAI is needed, it is because Circles is originally built on the xDAI network. Users who need xDAI can apply for it on their own at the tap address. (October 18 seems to have already applied for the share, and users who are eager to activate can use other addresses to transfer xDAI transfer to the registered address).
After successful activation, the prompt is as follows:
On the whole, the emergence of Circles has made everyone's eyes bright. The innovative spirit behind this project is the core of the continued development of the cryptocurrency industry. However, as Uniswap founder Hayden Adams pointed out, there are still many areas for improvement in the details of the project.
Hayden believes that Circles’s login method that requires entering a private key in a browser is not secure enough. In addition to a poor experience, it will also make new users develop bad habits. In addition, perhaps due to the high level of user participation sentiment, a large number of users reported this afternoon that Circles' servers were obviously unable to do what they were doing-"Try it for 10 minutes, 9 and a half minutes in loading". After the trial of Odaily Planet Daily, I did feel that the slow web response speed and congested network seriously affected the user experience.
Technology is only one of the challenges faced by Circles. As mentioned earlier, there have been many projects that tried UBI on the blockchain before Circles, but in the end they failed to mature due to various problems. DeFi short-term freeze, now block chain line industry in urgent need of hot speculation, Circles taken the first step to get attention, UBI will probably be focused discussion again, but the future of the project go from here, still waiting for the test of time .
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