Egalitarian and Just Digital Currency Networks

TL;DR

This paper proposes an egalitarian digital currency model where control and wealth distribution are fair, using joint minting and community intersections to achieve global justice in currency networks.

Contribution

It introduces a novel egalitarian minting mechanism and proves that intersecting communities can reach global distributive justice through joint minting.

Findings

Egalitarian minting leads to equal wealth distribution over time.

Community intersections facilitate convergence to fair exchange rates.

Theoretical proof of global justice in currency networks with overlapping communities.

Abstract

Cryptocurrencies are a digital medium of exchange with decentralized control that renders the community operating the cryptocurrency its sovereign. Leading cryptocurrencies use proof-of-work or proof-of-stake to reach consensus, thus are inherently plutocratic. This plutocracy is reflected not only in control over execution, but also in the distribution of new wealth, giving rise to ``rich get richer'' phenomena. Here, we explore the possibility of an alternative digital currency that is egalitarian in control and just in the distribution of created wealth. Such currencies can form and grow in grassroots and sybil-resilient way. A single currency community can achieve distributive justice by egalitarian coin minting, whereby each member mints one coin at every time step. Egalitarian minting results, in the limit, in the dilution of any inherited assets and in each member having an equal share of the minted currency, adjusted by the relative productivity of the members. Our main theorem shows that a currency network, where agents can be members of more than one currency community, can achieve distributive justice globally across the network by joint egalitarian minting, whereby each agent mints one coin in only one community at each timestep. Specifically, we show that a sufficiently large intersection between two communities -- relative to the gap in their productivity -- will cause the exchange rates between their currencies to converge to 1:1, resulting in global distributive justice.