Key for any alternative system is the way how money will be created and distributed. In every financial system, coins first need to be created. You can create all the coins all at once before you start the new financial system, create a bunch of coins every year or have protocols where you have a particular schedule to create an arbitrary amount of new coins and connect it to solving puzzles like in Bitcoin. You can also connect the creation of coins to persons who do actual work or to connect it to the hours a person is simply alive.

In all cases coins are created and distributed. The way of distribution will determine which type of coin creation is the fairest.

Lets go through the distribution models and see what could be a fair way to distribute coins. And remember that we only look at the way how coins will be created and initially are distributed. We are not yet looking at how people can increase their amount of money by providing products or services:

We looked at 5 ways to distribute newly created coins:

1. CREATE ALL COINS AT ONCE AND DISTRIBUTE AS FAIR AS POSSIBLE
   In this model everyone would receive an equal portion of the coins that are created. This immediately raises several questions. What to do with people that are on the brink of death or just have died, or just were born or are about to be born? Do you make distribution models for these situations and how do you do that fairly. And what to do with people that are born in the future and what to do with large families, with people that are in a coma or are massively disabled. What to do with inheritance. It is easy to see that it will be impossible to make this model fair. Also issues like theft are quite complicated. What to do when the lump sum that you have received and need to help you through life is suddenly gone. It is very unclear how to take care of those situations.
   
   
2. CREATE A FIXED AMOUNT OF COINS EVERY YEAR AND DISTRIBUTE EQUALLY
   When you create coins every year and distribute these sums evenly over the people, this is already quite a bit easier and fairer. There are situations that are not fair like people that die a day before they receive the yearly sum next to people that die a day after they receive the yearly lump sum. And do you start on everyone's birthday or you use a fixed yearly date for all? Do you need to work for the yearly lump sum or not? Overall you can see that this distribution method is already much better than the first one, but needs various improvements to make it really fair.
   
   
3. A PROTOCOL LIKE BITCOIN
   In Bitcoin, the miners with the most computing power will create the most coins. It is immediately clear that this way of coin creation is very unfair to people that don't possess any computing power at all. Also the factor luck plays a role in the decision who receives the value of the newly created bitcoin. Finally the protocol that will restrict the amount of coins to be created will cause many of the same issues as under a. like not being fair to people that are not yet born. Other cryptocurrency protocols, like Qortal where not the computing power but your online connection time to that blockchain determines how much coins you will get should be considered as a much fairer. In that system people that are connected longer receive more coins than people that just connected to that blockchain. So however Qortal is much fairer than Bitcoin, it is still completely unfair to people without proper internet and proper laptops. The conclusion should be that as long as a cryptocurrency doesn't distribute all it's coins equally over all people on society, it is extremely unfair. Wealth distribution would be even worse than the current financial system if crypto would replace the entire financial system today.
   
   
4. COINS CREATED BASED ON WORKING HOURS
   It is easy to see that it is almost impossible to define working hours and to value working hours in a fair way. For example: What do you do with jobs that require very long education programs? How do you value talent or people that work faster than others? Or how do you define jobs? Is taking care of your kids or parents a job? What do you do with people that are not able to work? What do you do with people who's jobs are taken by AI. There seems no proper way to organize this type of coin creation in a fair way.
   
   
5. COINS CREATED IN CONNECTION TO THE LIFE TIME OF A PERSON THAT IS ALIVE
   This type can be paid yearly, monthly, weekly, daily or even per hour to people that are alive. Whichever type you choose, it is clear that every living person will receive the same portions of coins as anybody else. When you would do this with physical coins, creation and distribution per month of year would be more practical. When coins are distributed digitally, the hourly option would provide the most accurate distribution. Regardless of jobs or education, everyone shares an exact equal portion of all the money that is created in that period of time.
   

To connect lifetime to the creation of coins is obviously the fairest way to create money. That is why we have chosen this type of money creation and distribution to be the basis for an alternative financial system. Before making some other logical choices for a new system, we first need to address a misunderstanding about the difference between "Personal Money Creation" and "UBI".


FAIR MONEY CREATION IS NOT UBI
UBI used to be the abbreviation of "Unconditional Basic Income". Tests with Unconditional Basic Income have been done in the recent past. Contrary to what many people believed is that people with an UBI didn't resort to being idle and start becoming alcoholics or drugs abusers. Instead people with an UBI mostly invested their capital in production goods that allowed them to become more productive and grow their businesses faster.

Globalists are pure communists. That is the reason the "U" of UBI was changed from "Unconditional" to "Universal". The people that print money out of nowhere, don't have issues with using their free money to pay people a Basic Income as long as it is completely “conditional” and serves them.

Universal Basic Income is something completely different than a fair distribution of newly created money. In the Universal Basic Income system, you will be forced to work if you are somewhat able. That will be one of the many conditions, connected to this "handout".

In the alternative financial system we however speak about a fully Unconditional Equal distribution of all newly created money. This looks a bit like Unconditional Basic Income but is still different since every living person receives an equal portion of all newly created money only. Once installed, nobody will be in the position to decide about the amount or frequency of payment of any newly created money. This is completely different than a Universal Basic Income that will be set - including all conditions - by a (world) government.

Another massive difference is that UBI is still an handout of money that has earlier been collected by the government as tax. So the people that are taxed are confronted with the burden to provide the money for the handout. In a system with inflation and other extraction systems for the owners of that financial system, the public will find it increasingly more difficult to provide the taxes to finance the UBI system. In the system 1CoinH proposes, this issue doesn't exist.


FULL DIGITAL?
The main reason to turn our current financial system into a cashless society is that a full digital system - that is completely controlled by the owners of the financial system and the governments they control - is a perfect tool for totalitarianism. When all transactions are digital, the banks - that have a monopoly on insight in your transactions - will now not only be able to see every transaction you do, but with the help of AI they can also influence or even prevent you to do any spending that might be against their political agenda. They will create zones where your wallet only works, they can put an expiry date on your UBI savings, they can put you on vegetarian diets and limit the range of your electric car. A cashless society based on the current financial system will result in the dystopian situation many tyrants dream of.

This situation raises an important question for the creation of an alternative financial system: Do you still want to use digital systems to check and validate transactions?

Also this can be solved with logic. Like we don't want a small group of people to have the monopoly on money creation, we shouldn't allow a similar small group the monopoly on insight in all financial transactions. If we don't allow a small group the monopoly on insight in all transaction than there is only one alternative: Grant everyone insight in the financial transactions. Or at least in all transactions that are relevant to you as a user. Once everything is in the open, it will be much more difficult for any would-be-tyrant to treat groups of people unfair compared to other groups, because this will be noticed immediately, allowing people to give the proper reaction.

A system where everyone has insight in all (relevant) transactions is the only alternative to have a small group with a monopoly on insight. You might think that having no insight at all is also a alternative. There are cryptocurrencies like Monero and Pirate Chain where nobody has insight. The problem with having no insight at all is that it conflicts with the fair distribution of fresh created money. To be sure that a person doesn't receive more than 1 share (or portion) of the fresh created money, other people must be able to check if a participation stream of new created money is only connected once to a particular person. So insight is essential. This doesn't mean crypto like Monero or Pirate Chain can never be used. Once the money is created in an ethical way, this money can be used to buy yourself for example Monero coins. It is however important that this is done in a new Monero blockchain where Monero is only bought with ethical money. This is because you should never mix unethical money with ethical money. It would namely stain the ethical money since you don’t want corrupt banks to buy massive amounts of ethical Money with their unethical fiat currency.

The logical conclusion is that ethical money (money that is created in a fair way) must allow all participants to have full insight in transactions and by doing so, breaking the monopoly of insight banks have currently. So by building privacy systems on top of ethical money, people can have financial privacy where also corrupt or criminal transactions can be done. Privacy systems should be allowed because corrupt and criminal transactions can also be done with precious metals or precious stones. It is societies task to prevent illegal activities. It is not the task of a financial system to do this. Ethical money can prevent corruption and financial crime, which is a feature that is not possible in our current system.


HOW MANY COINS?
Let's take a broad estimate. Assuming a global debt of US$240,000,000,000,000 WHEN we have a world population of 8 Billion people and all money in circulation has started as debt, then you can calculate that there is about US$30,000 of money per living person in circulation. If all this money was actually within reach of the common man and we would replace the financial system with a new system where we add 30,000 coins per person, then a coin would resemble a purchase power of about 1 US Dollar. Most of the money in circulation is however out of reach of the average common man. So to create a coin with a similar purchasing power as the US Dollar, much less coins should be created. That is why we think that 20,000 coins per living person should be sufficient and should represent a recognizable value in range of the Dollar or the Euro.


DEMURRAGE - MONEY WITHOUT INFLATION?
As indicated before, a system where a number of coins are distributed every hour over the entire world population would be the fairest system.

Now to make calculation easy, let's assume every person receives 1 coin every hour. This means a person receives 365.25 (the extra .25 is because of the extra day of the leap year, divided by 4 years) times 24 hours is 8,766 coins per year.

When we create a system where everyone receives 1 coin per hour, the money supply would simply keep increasing forever and as a result of that, the value of money would constantly keep dropping. This is not what you want. What you want is a constant money supply of around let's say 20,000 coins per living person. This amount should be constant at a moment not too far into the future and keep being constant. It is allowed to grow with the actual world population, as long as we have about 20,000 coins per person in circulation, to avoid any inflation as a result from an increasing money supply.

To get this stable supply of money we simply need to use a depreciation factor over all money that is in circulation. With a depreciation percentage, the money supply will over time become constant per person, and that is exactly what you want, because in a constant state of the money supply (money without inflation) the sense of what the value of an object is, becomes stable in the end. Only when productivity changes, you will see changes in the price of the produced items. This usually benefits customers, because normally productivity increases which means that prices usually will get a bit cheaper in this system.

To convert yearly depreciation (D) to hourly, the following formula is used:

D_hour = 1 – ((1-D_year)^^(1/8766))

where 8766 is the number of hours per year and D_hour is the depreciation factor per hour.

We did some iterations and a depreciation factor of 0.99995 per hour (20,000/20.001 = 0.99995, which is a yearly depreciation of 35.4875%) makes sure the amount of coins that is created per person won't ever go over 20,000 coins. This depreciation factor results in a situation that a person will accumulate 7,097 coins in the first year. This is in the 8766 hours that pass each year. The amount is reduced because ever hour all the coins are accumulated in this year will automatically reduce with 0.005% (1 minus 0.99995) every hour that passes.

At this rate each person accumulates 18,000 coins within 5 years and 3 months which is 90% of the maximum achievable 20,000 coins. Within ten and a half year each person has "created" 19,800 coins, which is 99% of their maximum amount.

After 22 years and 7 months each person has "created" 19.999 coins, but will never reach 20,000 coins in their lifetime because the 19,999 coins the person has created will reduce with 1 coin in the hour that the new 20,000th coin is created. This situation repeats every hour after 22 years and 7 months of creating the 19,999 coins.

20,000 coins per person doesn't look much . But remember that a family of five will "create" 100,000 coins for themselves. Coins that have an estimated value of about 1 US$ per coin. Next to that you need to remember that this financial system starts with a hard reset, meaning that everybody stops paying their mortgages, rent, lease, loans and taxes. And that all the real estate where they live and cars the people drive in are 'taken for free' and registered on their names in the new land and car registries that will be created. This is necessary to take back the property that was stolen by the corrupt banking system and start over with a proper fair financial system. When your house and car is free, 20,000 coins per person as money that is in circulation is suddenly quite a lot, especially when you consider that inflation is eliminated because the money supply is constant relative to the number of persons in the new financial system. Finally we will have a financial system without inflation. This means that also the nonsensical confusing of inflation with economic growth finally will end.

When we use 35.5% as depreciation of the one coin per hour everyone receives, the global money supply gets constant after about 22 years. Because there was no moment in history where wealth is properly distributed, it is difficult to predict if people have a big enough incentive to be productive. It is highly probable that we need a proper financial incentive for people to be creative and productive. To keep the circulation of money high, we have chosen to set the depreciation factor 35.5% per year which seems to be a propr stimulus for people to get active in a situation where the houses and cars are already in possession of the people.

The choices we made above are all based on the logic that is presented. We invite anyone to challenge the logic and also present better systems for a financial system. Until now we didn't receive arguments that discredit our choices. So contact us to present any remarks. It will be very welcome.

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