I am also unsure how it can work, but I’m clear that I don’t know enough to believe strongly one way or the other. I’ve heard that the principle is to spend the same amount as now, but removing the bureaucracy means you can spend more of what is collected. It is also designed to only give subsistence, food & shelter, so there’s incentive to work - both so you can have some extras, and because even a small extra wage makes a difference. More than now because firstly, the basics are already paid for, and earnings don’t reduce the basic income you receive - this means there’s a strong incentive for low paid people to work which is not currently the case. In the UK now, people in low paid jobs have to work very hard, doing difficult jobs for little money, which doesn’t cover the basics for many.
Those receiving welfare are not better off really. Partly because the system is punitive, demeaning and not something most people would go through if they had an alternative. I know this because I’ve heard from people exactly what they’ve experienced of it.
But even if it wasn’t such an ordeal to obtain benefits it still doesn’t work well. People only get it because they really need it now, and when they do start to earn more, much of that is taken away as benefits reduce. This is one of the traps that a basic income can change.
So there are arguments for, although I haven’t looked into this properly, or seen how it’s worked so far. I think it’s a very interesting experiment.
Regarding the cryptocurrency / taxation issue that @Seneca raises, there are people already trying to solve that. Take a look at resilience for example - using a genetic algorithm approach based around something called taxemes to voluntarily generate funds for a universal basic income.
Another solution would be through inflation of the currency - this is what Martin Armstrong proposes as a replacement for taxation - with a cap on how much money the government can print. If a UBI based on this were to prove more effective than means tested welfare (less waste on bureaucracy, more effective incentives to work, improved mental and physical health for the low paid), there’s no reason why this should by hyper inflationary. It might create more growth, raising the cap (which would be based on GDP if I remember correctly).
Anyway, definitely interesting!