This is a list of open questions - I would love to start a discussion about them.
The growth/inflation rate
What is a good number for the growth/inflation/tax rate.
This number is one of the key parameters of Circles. One why to look at it is that it is the tax rate on money. If it is too high than no one will use this kind of money - if it is too low than the basic income will become too small. Another question is whether or not it should be a global parameter or if it makes sense that different groups have a different one. Closely related is the question whether or not it should be adjustable over time and if so by what process and what would be the optimization goal.
Currently the system is designed in a way that you get coins as soon as you join. To make the start experience better you even get coins for the last three month. To some degree that incentivises people to better join today than tomorrow. That is a good thing because early adoption should be incentivised - and in Circles the advantage is only “linear” instead of the extrem advantage of early adopters in Bitcoin and other fixed supply currencies (<1000 people holding >50%)
However - this process can be abused by someone creating thousands of accounts now and later selling them to people who join later. Than they could claim this account and connected it to their real network and make the coins valuable. This would not be terrible but would destroy the early adopter incentive and replace it with a black market for old accounts.
- Circles could require to associate you account as you create it with an identifier like your name, and date of birth. If people would connect to you they could check that this information are right. For privacy reasons it would be good to have a zero knowledge proof - where you only proof it to one person that you account is indeed associated with your name - but this proof should not be shareable.
Bottom up - or top down
The goal of Circles would be to indeed provide a full basic income to the people. Everyone should get enough money per month to cover basic needs (at a very low level) In Germany for example this amount would be around 500€ per month (this is a realistic number if you look of the supply growth of € in the last 10 years and if this money would have been equally distributed you get roughly this number). Now there are two approaches to get to a status where everyone gets this amount. One would be to start with a few people and set up contacts that ensure that their coins will have this value (they could do it themselves (if they have money) by funding another contract with Ether/€/$ and this contract would guarantee to buy the personal Circles coin for a specific price (until the contact runs out of money)
The advantage is that you would have showcases of people who get a full basic income and that would be a way better “story” than people getting coins worth a few cents. The disadvantage would be that those people would most likely be very conservative connecting to others. They would only connect to others if they would also do some kind of commitment to the system.
The other approach would be to start with basic income very small (hopefully nevertheless lots of people would join) and than the currency hopefully gets over time more important and gains in value.