THE DIGITAL DOLLAR (D$)

Executive Summary

The Autonomist Constitution establishes a vision: a society where every person is recognized as a sovereign being, where government exists solely to protect autonomy and enforce accountability, and where taxation is "transparent, minimal, and directed exclusively to defense, justice, infrastructure, and welfare programs that restore autonomy—not dependency."

This white paper presents the economic mechanism that makes that vision possible.

The Digital Dollar (D$) is a decentralized, proof-of-stake cryptocurrency that replaces both the U.S. dollar and the entire tax system. The core insight is deceptively simple: in a closed economic loop where every transaction—including government spending—pays a fee, the math always balances, regardless of scale.

The Closed-Loop Economy: The Core Insight

Most discussions of taxation treat government revenue as extraction—money taken from the economy and removed. This framing leads to endless debates about "fairness," "progressivity," and "who should pay." The Digital Dollar system eliminates this framing entirely.

Money Never Leaves

In the D$ system, the economy is a closed loop:

1. Citizens transact and pay fees
2. Government receives fees
3. Government spends (and pays fees on its spending)
4. Recipients of government spending spend (and pay fees)
5. Cycle continues infinitely

The fee is not extraction—it's a cost of participation in the economy. Like a highway toll, everyone pays the same rate per transaction regardless of wealth. And unlike traditional taxes, the money immediately returns to circulation when government spends it.

The Infinite Scaling Principle

Here's where it gets interesting. In a closed system where:

• All spending (including government) pays fees
• All fees return to the system as spending
• Velocity determines revenue, not static wealth

Then you can theoretically scale benefits to any level—the math always balances because:

The Fee Rate as a Simple Dial

The system self-regulates. There's no "right" answer—just different equilibria. The fee rate becomes a democratic choice: what level of public services do we want?

Why This Works: The Velocity Principle

Traditional taxation captures a percentage of income—money earned once. The Digital Dollar captures a percentage of velocity—money moving through the economy.

Consider: The U.S. GDP is approximately $28 trillion. But actual financial flows are vastly larger:

At even a 0.05% average fee rate on $1,500 trillion in transactions, revenue would be approximately $7.5 trillion—more than the current federal budget.

Impact on Working Americans

Current System vs. Digital Dollar

Ending the Welfare Trap

Current welfare programs create perverse incentives that punish improvement:

The Cliff Effect

Earn $1 more than the threshold → lose $5,000 in benefits. Rational response: don't earn that dollar.

The Marriage Penalty

Two people earning $15,000 each qualify for benefits. Married, their $30,000 combined income disqualifies them.

The Savings Penalty

Save more than $2,000 → lose Medicaid eligibility. Rational response: don't save.

The D$ Solution

In a transaction-fee system, these traps disappear:

• No income thresholds — benefits can phase out gradually
• No marriage penalty — household structure irrelevant
• No savings penalty — money in wallet pays no fees
• No cliff effects — earning more always means having more

A ladder out of poverty, not a trap within it.

Privacy and Enforcement

Privacy by Default

• Wallet contents and transaction history completely private
• No government browsing, no fishing expeditions
• More private than current banking (which reports to IRS)

Accountability with Warrant

• Judicial warrant based on probable cause: full access
• Blockchain provides immutable evidence
• KYC identity verification available to law enforcement

The Ultimate Enforcement

In a cashless D$ economy, wallet freezing = economic death sentence. Required safeguards:

• Judicial warrant required (not administrative)
• Due process before freezing
• Emergency provisions for dependents
• Rapid appeals process

Why Evasion Becomes Irrelevant

The Hoarding Attack: Why It Fails

Can ultra-wealthy extract and hoard enough D$ to break the system?

Why the Attack is Self-Defeating:

1. Extraction requires transactions — fees paid during liquidation
2. Wealth maintenance requires transactions — businesses need payroll
3. Wealth regeneration requires transactions — no interest on wallet balances
4. Source of wealth requires velocity — stock value = future transactions

The Self-Defeating Loop: Billionaire hoards → Less spending → Their businesses earn less → Must spend to stimulate own income

Fixed Supply: Anti-Manipulation Guarantee

The D$ has a fixed supply of 21 trillion tokens. This prevents:

• Quantitative easing (hidden taxation through inflation)
• Deficit spending without consequence
• Generational debt accumulation
• Political manipulation of money supply

No Federal Reserve. No "printing money." The system is governed by math, not politics.

Implementing the Autonomist Constitution

The Digital Dollar directly implements each Article of the Constitution:

Conclusion: The Economic Foundation of Autonomy

The Autonomist Constitution opens with a recognition: "none of us chose to exist, and every person's time and life are finite and sacred."

But principles require mechanisms. The Digital Dollar is that mechanism.

• Sovereignty: Keep what you earn; pay only when you participate
• Privacy: Financial life protected by default
• Equality: Same rules for all—no loopholes
• Transparency: One simple rule visible to all
• Stewardship: Fixed supply prevents mortgaging the future

The World Autonomist Project · Anno Domini