Money for doing nothing? Sounds crazy, right? But that’s exactly what’s happening in New York City right now. A new experiment is giving 160 low income people $12,000 in cryptocurrency over five months, and it’s making everyone rethink how we deal with poverty in the age of robots and AGI.
What is Universal Basic Income Anyway?
Let’s start simple. Universal Basic Income, or UBI, is basically the government (or in this case, a company) giving people money regularly with no strings attached. You don’t have to prove you’re looking for work. You don’t have to spend it on specific things. It’s just money that shows up in your account, period.
Think of it like Social Security, but for everyone, not just old folks. The idea has been around for ages even founding father Thomas Paine talked about something similar back in 1796. Martin Luther King Jr. wrote about it in 1967, calling it the simplest way to end poverty. But it never really caught on in America, until now.
The basic idea is this: give everyone enough money to cover their basic needs food, rent, utilities so they’re not constantly worried about survival. Then they can focus on finding better jobs, getting education, or starting businesses instead of just scrambling to survive.
The New York Experiment
Now here’s where it gets interesting. The nonprofit GiveDirectly, using money that Coinbase (the big crypto company) donated, is running this pilot program in the South Bronx and East Harlem. These are neighborhoods where money is really tight for most families.
Here’s how it works: 160 people between ages 18 and 30 started getting $800 every month in September. Then in November, boom they got an $8,000 lump sum. All of it comes as USDC, which is a stablecoin that’s basically digital dollars. The program runs through February.
Why crypto instead of regular money? According to Emma Kelsey, who runs the program, many people in these neighborhoods struggle with traditional banks. High fees, credit requirements, trust issues regular banking isn’t easy for everyone. USDC lets them skip those barriers. Plus, they can convert it to regular cash whenever they want through their Coinbase accounts.
The big upfront payment is interesting too. Research shows that giving people a chunk of money all at once helps them handle big expenses like a security deposit for a better apartment, paying for school, or fixing a car. Monthly payments help with regular bills. Together, they give people both immediate relief and ongoing stability.
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What The Big Names Are Saying
This isn’t just some random experiment. Some of the most powerful people in tech are talking about UBI like it’s inevitable.
Sam Altman, the CEO of OpenAI, has been one of the biggest supporters. He actually funded the largest UBI study in America giving 1,000 people in Texas and Illinois $1,000 a month for three years. His results showed that people mostly spent the money on necessities like food, rent, and healthcare. They worked slightly less (about 1.3 hours less per week), but they used that time to look for better jobs, go back to school, or take care of their kids. Altman believes that as AI gets better and starts doing more jobs, UBI will become necessary. He’s said that technology is eliminating traditional jobs and creating massive wealth at the same time, so we need to share that wealth somehow.
Andrew Yang made UBI his entire presidential campaign in 2020. He called it the “Freedom Dividend” $1,000 a month for every American adult, no questions asked. Yang’s big concern was automation. He warned that one in three Americans could lose their jobs in the next 12 years as robots and AI take over. Truck drivers, retail workers, even accountants and lawyers lots of jobs are at risk. He proposed paying for it with a 10% value added tax (basically a sales tax that other countries already use).
Elon Musk has gone even further. At a tech conference in 2024, Musk said there’s an 80% chance that AI will get so good that “none of us will have a job.” But he’s not talking about basic income anymore he’s talking about “universal high income.” In his vision, AI and robots will make everything so cheap and plentiful that everyone can have a good life without working. He’s said that robots will eventually do everything better than humans. The big question then becomes: what gives your life meaning if you don’t have to work?
But Musk also sees a dark side. He’s worried that people get purpose and identity from their jobs. If everyone suddenly doesn’t need to work, what happens to society? Do people just sit around feeling useless? That’s the existential question nobody has answered yet.
The Good Stuff
Let’s look at the benefits, because there are some real ones.
First, it helps people immediately. When you’re broke and stressed about rent, it’s hard to think about the future. UBI gives people breathing room. Sam Altman’s study found that recipients spent more on healthcare going to the dentist, getting treatment for problems they’d been ignoring. One person in his study said the money let them escape an abusive relationship. Another took a lower paying job in their dream field because they had the financial cushion to do it.
Second, it might actually save money in the long run. Right now, we have hundreds of different welfare programs, each with their own rules, applications, and bureaucracy. That costs a lot just to manage. UBI is simple everyone gets it, done. No means testing, no paperwork nightmares, no people falling through the cracks because they didn’t fill out form 37B correctly.
Third, it could help with the AI problem. As artificial intelligence gets better, it’s going to replace workers. We’ve seen it before with factories machines replaced assembly line workers. But AI is different. It can do creative work, office work, even some medical diagnosis. If millions of people lose their jobs at once, you can’t just tell them to “learn to code.” There won’t be enough jobs. UBI could be a safety net that prevents massive social breakdown.
Fourth, people don’t waste it on stupid stuff. This is important because critics always say people will blow the money on drugs and alcohol. But study after study shows that’s not true. People spend it on food, rent, medicine, and helping their families. Altman’s study found that people actually spent 26% more helping others giving to family, donating to charity, helping friends. Their savings went up by 25%. These aren’t signs of people becoming lazy moochers.
The Problems: Why People Are Worried
But hold on. It’s not all sunshine and rainbows. There are serious concerns.
The inflation question is huge. If everyone suddenly has more money, won’t prices just go up? Think about it like this: if everyone in your neighborhood gets $1,000 extra each month, your landlord knows it. What stops them from raising rent by $1,000? This is the fear that UBI would just reset the zero point, making everyone equally broke again but with bigger numbers.
Economists have different views on this. Some say UBI wouldn’t cause much inflation because it’s not printing new money it’s just redistributing money that already exists through taxes. Others point out that in specific markets like housing, where supply is limited, prices could definitely shoot up. Alaska has had a yearly oil dividend since 1982 (everyone gets about $2,000 a year), and studies haven’t found major inflation there. But that’s a lot less money than full UBI would be.
Work incentives are another big worry. If people can survive without working, will they just stop? Altman’s study showed people worked slightly less, but it was mostly single parents who needed more time with their kids. Most people kept working because $1,000 a month isn’t enough to live well on. But what if it was $3,000? Or $4,000? At some point, would people just check out of the labor force entirely?
The counterargument is that people want to work. They want purpose, achievement, social connections. But that assumes everyone has access to meaningful work. If your options are horrible minimum wage jobs that treat you badly, maybe the “lazy” choice is actually the rational one.
The cost is absolutely massive. Yang’s Freedom Dividend would cost about $2.8 trillion per year. That’s roughly 70% of the entire federal budget. Where does that money come from? Even with a value added tax and cutting other programs, the math gets really tough. And if you don’t make it truly universal if you means test it or phase it out for higher earners you lose some of the benefits and create new problems.
The AGI Problem
This is where it gets wild. Sam Altman and others talk about AGI Artificial General Intelligence which means AI that can do basically any intellectual task a human can do. Some experts think we’ll get there in the next 10–20 years.
If AGI happens, the job market doesn’t just change it potentially collapses. Why hire an accountant when AI can do it better, faster, and cheaper? Why hire a lawyer, a doctor, a programmer? If machines can do everything, what happens to the 99% of people who need to work to survive?
Altman’s answer is UBI, but funded differently. He talks about taxing AI companies or creating a “sovereign wealth fund” from AI profits that pays dividends to everyone. Basically, if AI creates huge wealth, that wealth should be shared with everyone, not just tech billionaires.
But critics say this is Silicon Valley dreaming. It assumes AI companies will voluntarily share profits, that governments will force them to, or that the economy will keep working the way we expect. What if AI just makes a few people incredibly rich while everyone else struggles? What if the transition is so fast that society breaks before we can adapt?
Corruption and Implementation
Here’s something people don’t talk about enough: how do you actually implement UBI in poor countries where corruption is rampant?
In places like India or parts of Africa, government systems are often corrupt. Money meant for the poor gets stolen by officials, or programs are designed so that only people with connections benefit. Research shows that in some developing countries, only a fraction of aid money reaches the intended recipients.
UBI could actually help with this. Because it’s universal and automatic, there’s less room for officials to play favorites or demand bribes. Money goes directly to people’s accounts. But you still need basic infrastructure banking systems, identification systems, ways to prevent fraud. Many poor countries don’t have this.
Studies in India found that replacing complex subsidy programs with direct cash transfers reduced corruption and got more money to people who needed it. But implementation was still messy. People without bank accounts couldn’t get payments. False names popped up on recipient lists. Rural areas had technical problems.
The UNDP (United Nations Development Programme) has argued that developing countries need UBI more than anyone because their social safety nets are so weak and corruption is so high. During COVID-19, millions of informal workers had no support at all. But the same countries often have trouble collecting taxes, which makes funding UBI really difficult.
MY TAKE
Look, I’ll be honest. This whole thing makes me both excited and nervous.
The New York experiment is fascinating because it’s real. These aren’t hypotheticals it’s 160 actual people getting actual money right now. And from everything we’ve seen in other studies, it’s helping them. People are paying rent, going to the doctor, making plans for the future instead of just surviving day to day. That matters. That’s real human lives getting better.
The inflation worries don’t scare me as much as they seem to scare other people. Yeah, in housing markets where supply is limited, landlords might raise rents. But that’s a housing policy problem, not a UBI problem. We should be building more affordable housing anyway. And if every business tries to jack up prices because customers have more money, well, competitors will undercut them. That’s how markets work. The Alaska dividend hasn’t caused runaway inflation in 40+ years.
What does scare me is the speed of technological change. I think Altman and Musk are right that AI is going to eliminate a lot of jobs. I don’t know if it’s 10 years or 20 years, but it’s coming. And we’re not ready. We don’t have a plan. UBI might be the plan, or part of it, but we’re still arguing about whether it’s a good idea while the future is already happening.
The work incentive thing doesn’t worry me much either. Most people I know want to do meaningful things with their lives. They want to contribute, to build, to create. What they don’t want is to work terrible jobs for terrible pay with no respect just to barely survive. If UBI lets people say “no” to exploitation, that’s not a bug that’s a feature. It means employers will have to offer better jobs to attract workers.
But here’s what really gets me: the corruption and implementation challenges, especially globally. If we’re serious about UBI being universal like, truly universal across the world we need to figure out how to make it work in places where systems are broken and trust in government is low. The technology exists (crypto actually helps here), but the political will doesn’t. And that’s the hardest part.
I think we should do more experiments like the Coinbase one. Bigger ones, longer ones, in different places. We need data. We need to see what actually happens, not what economists predict will happen. Because the alternative doing nothing while millions of jobs disappear seems way more dangerous than trying something new.
The truth is, we’re in new territory. Our grandparents couldn’t imagine a world where machines could think. We’re living in it. The old rules about work and value and how society functions might not apply anymore. UBI might not be the perfect solution, but it’s one of the few big ideas on the table that actually tries to address the scale of change we’re facing.