Goodcoin: The crypto solution for sovereign debt?

The theoretical concept of a cryptocurrency employing Proof of Socially Beneficial Work (PoSBW)—a class of which could be called Goodcoin, discussed in the article linked below—is a radical shift from traditional blockchain validation methods like Proof-of-Work (PoW) or Proof-of-Stake (PoS). PoSBW mandates that new tokens are minted only after demonstrated and easily quantifiable positive societal results have been achieved, essentially anchoring the currency’s value to measurable human benefit. For instance, this could involve minting tokens for achieving health improvement goals among low-income residents of a city, such as a reduction in juvenile diabetes incidence, or the provision of shelter for the homeless. This innovative approach theorizes that Goodcoin-type currencies can fund essential social work without contributing to governmental indebtedness or monetary inflation.

A theoretical concept of cryptocurrencies employing proof of socially beneficial work.

A simulation conducted as part of the PoSBW research specifically examined the potential impact on the United States (see figure below, from the article). Given the current challenge of an escalating US Federal debt (around $34 trillion at the time of writing) and the rising costs of social benefits like Medicare, the model offers a stunning solution. The simulation projected that if the US Federal Government were to begin receiving and utilizing Goodcoin tokens (minted to fund social benefits), the accumulated value of those holdings could match the entire US Federal debt in just 10 years. This suggests that a successfully adopted PoSBW cryptocurrency could potentially wipe out the entire US Federal Government’s debt by creating a new, value-anchored stream of funding that bypasses the need for conventional debt issuance.

Beyond the U.S., the fundamental social funding proposition of PoSBW asserts that these cryptocurrencies will be utilized globally to fund socially beneficial work without increasing countries’ indebtedness. This is a critical factor for nations grappling with soaring debt-to-GDP ratios, such as Japan (266%) and Canada (118%). The framework is designed to be universally applicable, allowing tokens to fund specific socioeconomic achievements in any country. By providing an alternative means to finance major social commitments—like retirement income and healthcare for aging populations —Goodcoin and its peers offer a pathway for governments to escape the "vicious cycle" of rising debt, higher borrowing costs, and potential central bank monetization that leads to inflation. For a brief discussion on this, along with a few other related topics, please refer to the video linked below.