You might have heard of Bitcoin or Ethereum in the news, they are cryptocurrencies. It’s basically digital currency protected by very strong encryptions so that it’s nearly impossible to forge. It’s more efficient, secure, and decentralized in many ways than existing paper (fiat) currencies issued by governments. Because it is issued by a collection of “miners” instead of a centralized agency like the government, its value/price is mostly due to market forces as opposed to government officials or bankers. For major cryptos such as Bitcoin, it’s generally agreed that no single agency / group can control its supply.
Cryptos is a new field and like the Wild West, sheriff is yet in town (though they’re coming! as governments are starting to regulate them). There are many factors that could impact the price, even the survivability of individual crypto coins or tokens. Lacking strong fundamentals, perhaps 95% or even 99% of today’s cryptos (1,600+ as of Aug. 2018) may disappear in 5 years, similar to how many Internet companies rise and fall during the 2000 dotcom bubble. However, that doesn’t mean there aren’t fundamental values to cryptocurrency technology or use cases, where some likely will survive and become the backbone of a new digital economy. With an index fund approach, we’re not betting on any individual crypto, but on the overall trends, and our approach looks at time span of 5 years or more. When you’re taking note of the trend instead of individual performers, the risk is highly reduced. The only major risk is if cryptocurrency fail collectively. However, most trend observers agree that cryptos are here to stay.
it’s nearly impossible for crypto to be banned by governments, and there are two basic reasons: 1) the network of machines that sustain a particular crypto is distributed across the whole Internet, and they all have a copy of the same records, so unless the Internet is shutdown, the crypto network will exist in some form; 2) there is a well-established international network of banking system, where money can transfer from any country, to a crypto-friendly country, where it can then be used to purchase cryptos. So even if a government disallow crypto trading or exchange within its borders, its people can still buy / trade / use crypto by buying elsewhere.
in many countries, there are not yet formal laws governing the use, holding, or transactions of cryptos, but most existing laws would trade cryptos as a form of digital properties (similar to in-game currency issued by game companies) and would make it fall under consumer laws. Unless specifically banned (for example, China bans companies from performing Initial Coin Offering, or ICOs). The holding and/or trading of cryptocurrency is not illegal in most countries (please refer to this list on specific countries).
Currently a person can only participate by invitation from either the JCF staff or another friend who’s already a JCF member. Next, you need to have some existing Ethereum (ETH) in our to purchase our JCF token. There are many exchanges where you can do this. Once you’ve been invited by existing JCF token holders to create accounts, you will find a custom, user-specific Ethereum address to fund your account. We will then use the current ETH to USD exchange ratio to determine how many JCF tokens your fund can purchase at JCF’s current Net Asset Value (NAV). The purchased JCF tokens will be stored at your own Ethereum wallet address within your JCF account. In the future we may support sending the tokens to your own Ethereum wallet.
The JCF token is based on Ethereum, so all the mining involved are related to Ethereum’s current mining and operation mechanisms. The JCF tokens are created by our team alone, without having to be mined. The scarcity (limited supply) of the token is determined and guaranteed by the JCF smart contract.
The “profits” of the Joint Commonwealth Fund, defined as the increase in Net Asset Value (NAV) of each token of the fund each year, will be put into a “dividend pool”, where 25% from the pool are paid as dividends to all token holders in two forms: 1) common dividend (determined by the holding ratio) and 2) shared dividend (paid to all “verified” natural person token holder). The design is that these annual dividends will serve as a form of passive income to JCF token holders, and when the amount exceeds some minimal living requirements (which vary from place to place), it can then be considered as a form of “basic income”.
We differ from other financial instruments in our WHY and HOW: JCF started with the intention to realize UBI sooner than governments enactment, and to let technology serve humanity, instead of the other way around. As such, JCF in practice is more like the a “social dividend” system paid from a sovereign wealth fund as proposed by Guy Standing, except that this fund isn’t started by government, but by private investors who identify with the social mission of the fund. But the mechanisms are similar: when such a socially-oriented fund is established and may generate profits/dividends over time, the dividends can be redistributed to existing members such that everyone benefits, and wealth redistribution is built in. To our knowledge, most active or passive funds do not have such as “wealth redistribution” mechanism built in, and even so, such as the Alaska Permanent Fund, its membership would be limited to a certain geography (thus cannot be worldwide, which JCF potentially can), or the distribution mechanism would be costly (e.g., mailing out checks to citizens to cash in the dividend). Here JCF is trying to utilize the latest technology in smart contract to ensure automatic, verifiable, and transparent wealth redistribution, while providing identity checks via the latest ID technologies such as online KYC. All for the purpose to ensure a low-cost approach to build and manage a fund that may pay out a form of “social dividend.”
Please go read our whitepaper, which has the most detailed descriptions regarding the design and operations of JCF.
There are quite a few "crypto index funds" out there (for example, Crypto20 being a more accessible one, it invests in the top 20 cryptos on behalf of investors), there are also some CryptoUBI efforts (Mannabase that distributes "free coins" to anyone who register, and supports its coin value by donated money that buys the coins on crypto exchange). But pure "crypto index funds" are simply wealth instruments (out of reach to less privileged people), while cryptoUBI coins likely will take some time to build up its coin value slowly (the "wealth accumulation" occurs only when many people decides to use and adopt it, so the UBI it distributes currently over months of periods amounts to only a few US dollars). Here's what we're doing differently: we use "crypto index fund" to build wealth (assuming overall blockchain will be on the rise in the near future), while using the same blockchain technology to also redistribute wealth via smart contract. So "blockchain tech" here is used both for wealth accumulation, and also redistribution, whereas most existing proposals appear to be only doing one or the other. If you know any other projects that work like ours, we'd be happy to know and exchange! thanks!