There is a lot of money in cryptocurrency. Many are starting to realize that including a couple of cities. To say this is the wave of the future is an understatements.
Some live by the adage if you can't beat them, join them. While many governments are trying to figure out cryptocurrency, a couple of cities are really starting to benefit from this innovation. They are joining the legions of people who are seeing their financial futures dramatically altered due to their involvement in this industry.
One of the major innovation over the last couple years was the introduction of CityCoins. This is allowing cities to get involved in cryptocurrency.
City Of Miami
Miami is headed by the cryptocurrency advocate, Mayor Francis Suarez. He is very public about his support of this industry and how much he favors Bitcoin. He was one of the first mayors to take part of his pay in Bitcoin. There is also talk if him getting a portion of his 401K in the leading currency.
Thus, it came as no surprise that Miami became the first city to opt into the CityCoin project. The program went live in August and has been running since then.
Due to this, the Mayor suggested giving all residents of the city a dividend. This would come from the conversion of the cryptocurrency in the City Treasury. At present, they are in the form of STX. This amount now totals $24.7 million.
At this pace, the city will generate more than $50 million through the mining of MiamiCoin.
Is this the start of a larger trend?
NYCCoin
The new Mayor of New York, Eric Adams, is like Mayor Suarez. He is a huge proponent of cryptocurrency and wants to make NYC a hub. His goal is to attract cryptocurrency business as well as growing out the rest of the technology sector.
After winning election, people took it upon themselves to set the Mayor off in the right direction. CityCoin went live with NYCCoin, which operates in the same manner as MiamiCoin.
According to the Citycoin website:
The mining process pays out the NYCCoin to the miners. At the same time, the STX is split between those staking and the City Treasury at a 70/30 ratio. The City receives 30%.
So far, in just a couple months, the New York City Treasury has gotten $30 million in STX. At this pace, it will generate over $150 million in the first year.
Incentive Alignment
Perhaps we are seeing a return to the aligning of incentives between residents and local governments.
This coins are programmable, enabling them to be utilized in many creative ways. For example, there could be a discount on property taxes if paying in the Miami or NYC tokens. Since it is all smart contract based, the cities can start to offer discounts for services utilizing the token.
Of course, there is great incentive for the governments to do that. If the token gains in popularity, there will be more people looking to mine the token. This will only increase the flow of STX into the city's wallet. It is why NYC was able to outpace Miami in such a short period of time. The former is a much bigger market, attracting more people.
There is the added advantage that the city residents can benefit also. Since STX can be converted to Bitcoin, a decision could be made to offer this in the form of a dividend. It is what Mayor Suarez is discussing for those in Miami.
We essentially see a method whereby everyone in that geographic area earns a form of passive income.
It will not, however, be a major windfall for each person. With roughly 500K people, the dividend for Miami residents, so far, would be roughly $50. Nevertheless, how often do we get money from our governments. It is common for us to have to send $50 to them.
Whatever the decision, we are witnessing a project that is able to bring more money into the local economy. No matter how we slice it, even the $24 million is a nice chunk of change. Ultimately, it will be spent somewhere.
Of course, this is not factoring the eventual value of MiamiCoin. That could also increase in value if people start to get creative in developing use cases.
Vote With Your Coins
According to a blog post on the CityCoin website, could we be seeing a new method of voting. Instead of placing your vote at the ballot box, people vote with their coin purchases.
The idea is that the tokens are a referendum on the city and, hence, the government officials. Those cities that are doing a good job will have stronger tokens purchased by those throughout the world. At the opposite, those that are failing will end up dropping in value.
Instead of throwing in with a local candidate who more or less aligns with your beliefs, with CityCoins, you can associate yourself with any city, anywhere. If you like the way your hometown is working, collect and use its CityCoins token to create and show support.
But if leadership takes things in a direction you don’t agree with, you can quickly and easily swap those CityCoins for the tokens of another city that better fits your beliefs (and it’s a lot easier than uprooting your family).
Here we see an added dimension of accountability. Public officials will have a new metric they can be judged by. Individuals in the local community are going to be affected by the value of their tokens. Those who are not doing the job in a manner that promotes support, i.e. token purchase, will see the market establishing a diminishing value.
Today there are just two CityCoins cities: New York and Miami. But there could soon be hundreds. Rather than picking from a handful of local candidates who sort of reflect their beliefs, a person can choose to support leadership that matches their beliefs—regardless of location or citizenship.
Anyone should be able to align themselves with a city that shares their values. CityCoins make that possible, and in the process, bring civic governance into the modern age.
It is an interesting merging of the digital and geographic world. The idea that people can support and benefit from the alignment of their views, even if not in their local area, is innovative. Obviously, a lot of work has to be done to meet this end but we can see how this could evolve over time.
The fact that the post states there will be hundreds of cities coming online is also very intriguing. It is another area where the pro-Cryptocurrency sector only gets larger.
Could there be a day when people are amassing dozens of tokens from their favorite cities? In the digital world, this is very possible. We will see how quickly other cities get on board and how much this project expands. The key is the fact that we could see the network effect really taking off if they get a couple hundred cities involved. It would enhance the value of all that is involved in the ecosystem.
Here is another area where cryptocurrency innovation is altering a major piece of our real world.
What happens when there is an abundance of money creation possible? It looks like we are on the way to finding out.
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