OK, I listened to the linked interview and there's a lot of buzz words being tossed about. I'll translate.
The UBU is "securitizing coupons."
Lets say you're a restaurant owner and you sell a meal for $100 (in RAND). Of that, 10% is typically spent on advertising and promotions. So, your meal, net of advertising expense sells for $90.
Everyone who signs up gets 100 UBU per day ... but they lose 1% per day. This is a large incentive to spend it ASAP. Where? At participating retailers. So, they look at the list of particpating retailers in their area and they see your restaurant. And so, they make reservations.
Note though that each retailer determines what percentage of RAND/UBU it will accept. So, let's say your restaurant has a 90 RAND / 10 UBU split. Well, that's exacatly the same position you were in initially (with coupons) EXCEPT now you have 10 UBU which you can sell. Irrespective of the price, anything is better than zero (the initial condition).
Of course, other restaurants see their traffic declining while yours increases. And so, to re-establish a balance, they too start offering the UBU deal.
Over time, the UBU may itself acquire some "commodity value" although I strongly doubt that this is the intent as the erosion in it's value is too rapid to make it very useful as even a mid-term investment asset.
In essence, the UBU gets you to voluntarily "be marketed to" at a discount to the retailer. The UBU is striving to become a "universal coupon."
Quill
UBU erodes, but can be traded for UBX, which I assume is a stable investment? Perhaps?
I can't quite determiine at this point if UBU/UBX is a South African entitiy, or do they aim at worldwide adoption?
Those are good questions. There is a swiss address and a South African focus. It's so new that the jury must still be out
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@thekittygirl,
The UBU is designed very much like an "Option" (calls and puts) ... a contractual right to buy or sell something (like a stock) at a predetermined price during a specified timeframe. The value of such Option, however, erodes over time as the period in which it can be exercised gets shorter and shorter.
The "something" in question in this instance is the value of the coupon. You receive a $100 coupon today. Tomorrow it's only worth $99. The next day, $98. And so forth. So, it behooves you to cash it in now ... by buying something (with RAND or whatever other fiat currency is stipulated) so as to receive as much discount as possible.
But what if you don't want to buy something or you don't have the fiat to do so? Well, you could sell it but, because it's value is eroding so quickly, you'd have to accept a steep discount because whoever buys it will inherit its eroding properties. As a result, it can never be worth more than a fraction of its original face value.
There's nothing wrong with this. Indeed, it's an intriguing idea for retailers to consider. Calling it a "universal basic income" though is a bit misleading. If I gave you $100 per month, you could spend or save it as you liked with no constraints. With UBU, you need to spend substantial money (earned elsewhere) to receive its value (discount on a purchase).
Not sure.
Quill
Thank you for this, @quillfire and to @blockurator for taking the time to read and comment. As I was writing and subsequently ruminating on what I was seeing on the website after my kneejerk "this-is-a-great-concept" reaction I started beginning to think that it was a glorified loyalty/coupon scheme. And the website had multiple portals and they don't all recognise the same credentials and the support - well - let's just say it's not very....
I will do a little more digging as a user and potential vendor tomorrow.
There are two things that worry me:
The premise of universal basic income in a country where virtual vendors that offer real value, I.e. more than data and a cup of coffee from a major brand, to folk who live in poverty, is not realistic. Laudable idea but illustrates the extent to which educated techies are completely out of touch with reality - where survival which includes women knowing that they are safe at home - including in many instances from men and family members.