Re: A question about crypto-currencies from a 12 year old

I've heard of a crypto-currency which provides a basic income for everyone but why does it have to be basic? Why can't it provide a good income for everyone? Also, will prices rise if everyone was earning a good amount of money? I am only 12 and have no knowledge of the economy but I am interested in learning about crypto-currencies.

Hi, the problem with that idea is that, although it sounds nice, money isn't actually wealth... it only represents wealth. If a currency was made to give enough money to everyone for a good lifestyle, it would be devalued over time. That's actually why prices in dollars go up over time: As the government gradually prints more money, each dollar becomes worth less. If they were to just print dollars for everyone *all* dollars would lose value and eventually become worthless. This happened to Germany during World War I. This picture picture shows kids playing with German money after the government printed so much that it because worthless. Although it would be nice to provide an income for all, to do so you either have to tax or print money (this goes for cryptocurrencies as well as fiat), both strategies do some serious harm to the economy.

I am *not* saying that we shouldn't take care of the poor. I believe we should, but we have to be very careful to avoid unintended consequences.

How would you go about achieving this then?

There's really no way to do it without taxing unless people take personal responsibility for helping the poor, but it's important to tax as little as possible because if we tax too much (as most nations do) it creates even more poverty. One way that might work is to give welfare to anyone who falls on hard times, but require them to work in order to continue receiving benefits unless they are disabled or otherwise can't work. It sounds harsh, but if we just give anyone who doesn't feel like working a good income, then too many people won't work and *everyone* will get poorer. Eventually, who will pay?

Right now one problem we have is that (in the US) many states pay more in welfare than entry level jobs. Why work when you can get money from the government?

So we're talking about socialism here?

Seems like it. That, or communism, but they're not the same thing. Keep that in mind.

Welfare should have a mandatory number of volunteer answers at the least, it would be better if it was enough for about 1/2 month's worth of benefits, the other had to be worked for. That would kind of encourage people to get jobs, or at least help the overall quality of things.

I'm pretty far from socialism, I don't support a welfare state, but I don't support people dying on the street either. We need a basic safety net--- but it has to discourage perverse incentives and avoid sucking the economy dry. You could call that a socialist concept, but on the modern scale I am somewhat libertarian.