A Guide to Circles, the Project Bringing UBI and FOMO to Ethereum’s xDai Sidechain

Free money always makes the crypto world go mad, even if people don’t know what the new cryptocurrency will be worth or what it’s good for.

The case is being proven out again with Circles, a blockchain-based universal basic income (UBI) project that launched Oct. 16 on Ethereum’s xDai sidechain.

Founded by Martin Köppelmann of Gnosis and run by a very small, Berlin-based team, Circles promises to give users 240 of its CRC cryptocurrency each month, but it puts up one hurdle to get started: The user needs to find three people who are already inside and convince them to form a “trust” line from their Circles wallet to that of Circles’ aspirants.

It’s a way of creating a parallel economy. 

For anyone decently networked in crypto, especially within Ethereum, this seems quite easy. The truth is, however, Circles has been very slow and buggy so far.

“We are quite busy,” Blanka Vay of the Circles team told CoinDesk when reached by email. “Our servers are down because of the huge interest.”

As a post from the official account in the Circles Telegram channel put it Wednesday:

“We’re facing heavy infrastructure problems with a naive server setup and 70 million requests per 24 hours. … We’re working hard on improving it so the app runs more stable.” 

Traffic jam

Andrew Gross, of the POA Network, which runs xDai, said the Circles launch has led to one of the biggest transaction surges the network has ever seen.

To be fair, Circles and cryptic space game Dark Forest are running neck and neck for driving the biggest transaction spikes on xDai, though Gross noted the sidechain is still running well below capacity. The bugginess seems to be more with Circles’ APIs.

Circles functions from the ground up differently than other cryptocurrency projects. Its white paper describes how funds move through the network in a social fashion rather than a technological one. Circles is a true social network for value.

Somewhat like the Lightning Network, value moves through Circles via trust lines. This is important. Circles is meant more to inculcate communities of cooperation, not to transfer billions of dollars around the globe, like Bitcoin can. 

Members of the Circles development team have told CoinDesk they are working to scale up and switch to infrastructure that can better handle this unanticipated growth. This has been frustrating for new users, but you can think of your frustration as similar to the computational energy required to mine fresh bitcoin.

Perhaps it’s good that an endless faucet of free crypto has some pretty significant friction to get started. The friction only requires patience, not funds, so it’s not financially exclusionary, even if the initial set of trusted parties represent a privileged class. It’s spreading fast, so every day it should be easier to join – technical glitches aside.

Pro tips

But for those struggling to get in, I’ve learned a few things about how Circles works over the 24-hour period I spent trying to get on. Hopefully, this will help others:

Just keep trying. There’s been a lot of talk in my Slack channels and with folks I know on WhatsApp about spinny wheels of death. It seems like the spinny circles on Circles don’t mean much. Try to join, give it a minute and then try again. Try again every few hours. Also, dropping ad blockers seemed to help.

Reformat your seed phrase when saving it. Definitely save your seed phrase, because it lets you log in through other browsers, but reformat it so it’s a sentence. When I copied and pasted my words they pasted as a list. To log in again, you want them in a sentence format, separated by spaces.

Reloading your wallet can help. In cases where verifications aren’t showing up or transactions aren’t working, rebooting wallets can help. Before my account became verified, the only way I could find to do this was by clearing the history on my browser. Once an account is verified, though, click on the hamburger menu, go to settings and click the scary red “End Session” button. Note: Do not click it if your seed phrase hasn’t been backed up. 

Circles is weird about emails. If you get a spinny wheel at the account-creation stage where it asks for an email, search your screen. It might be saying it doesn’t like your email. Two of mine were rejected and it only liked my shady email from an obscure German company that I only use to hide from Mark Zuckerberg. It rejected my long-standing, well-established Gmail address. I have no clue why.

Find real people who actually know you. This could be hard for some crypto n00bs but just try to work your network and find folks you have encountered for real or make new online friends. Think of this as your little bit of “social mining.” You can just shamelessly beg randos on Twitter but you’re not building social capital that way. If it takes a little longer making it real, so be it. We each have the personal network we have earned. 

Verifications take forever to register. Circles showed me at two verifications for hours when I knew I had three (others have taken even longer). Then, when I got in, I didn’t have verifications from anyone who had actually told me they were going to do it. I had them from people I’d asked who hadn’t directly responded. I think this is because people thought they had verified my account but the push didn’t make it through. So it goes. 

Verifying others isn’t any better. So if you get to the point where you can verify others, just do one person at a time. I got a spinny wheel and then the home screen popped up and a message briefly appeared saying I had verified them. I think I have verified people several times but it’s really hard to say. The early days of new cryptocurrencies are very exciting.

Return the trust. If someone trusts you, you need to trust them back (so long as you do). Right now it doesn’t show the name of users half the time so this can be tedious, but once that gets easier look at all the people who have trusted you, click on their profiles and return the favor. It’s like Twitter: double opt-in for real connection.

Just use one machine as you start. I’ve been bouncing between two laptops and my mobile. Circles does not seem to like that, and that makes sense with the system under strain. So pick where you want to get started and just stick with that until Circles manages to scale up.

If anyone manages to send CRC, let me know. For my first couple days in I was not able to give away any of my funds, even among the mutually trusted. Whether CRC proves to have real-world usefulness is up to everyone who does manage to get the faucets turned on. 

Hopefully, these tips should help those people determined to get in to get in faster. Just don’t expect a small Web 3 project to work at Web 2 speed.