We covered this a number of times over the last half year. The City of Miami was the first to sign up for the CityCoin project. Here is where cryptocurrency is mined and a portion goes into the City's wallet.
For the City of Miami, mining started in August of last year. It is no surprise that Miami was the first to sign up. Mayor Suarez is one of the leading cryptocurrency advocates holding public office.
With Miami leading the way into the cryptocurrency realm, it is interesting to note that Miami has no rights to the coins that end up in its wallets.
There is no formal partnership between the protocol and the city. Rather, the payment was made as part of a gift agreement between the city and the CityCoins protocol. The city of Miami is not able to custody the wallet itself due to Floridian laws that bar cities from holding crypto on their balance sheets.
We can expect the Mayor to be knocking on the doors of some in Tallahassee to get this law changed. In the meantime, the tokens are "gifted" to the city, in the form of USD.
$5.25 Million Payout
The Mayor tweeted out that the first payment was received by the City.
Miami has received a $5.25 million disbursement from the CityCoins project, a crypto protocol that has residents generate revenue for their city by mining their city's tokens, according to a tweet from Miami Mayor Francis Suarez.
This is just a portion of the total that was in the wallet.
With the recent $5.25 million disbursement, the wallet is now sitting at $15,732,488.75.
Doing some simple math, this project will amount to roughly $50 million in the first year. Of course, since it is cryptocurrency, this could be higher or lower depending upon what the market does.
If there is a massive explosion in the value of the tokens, this could net the City even more money.
The reverse is also true which is something to keep in mind. One of the keys will be how much CityCoins is able to expand its platform. Getting a lot of other cities on board would certainly add some more value to the token.
NYCCoin started mining back on October and it is enjoying more success than Miami. Of course, the former is a much larger city.
Cities are starting to realize that cryptocurrency is a great way to fund operations. The City of Austin is rumored to be next. Yet, according to the CityCoin website, there are other companies looking to get involved.
It seems like Philadelphia is interested in joining the mix also.
Moving Passed Proof-of-Concept
Miami proved the validity of this project.
Up to this point, it was all conjecture. However, with the money in the City Treasury, it is now complete. The project works and is viable.
Proving the validity of something is often the hardest part. The City of Miami showed that the CityCoin project can turn into real money. While $5.25 million isn't a huge amount to a city like Miami, it is just one payment that it will receive throughout the year.
Also, the city basically did nothing to get the money. The miners did all the work, with the city's wallet collecting a portion of all the activity. Basically, it just waited for the conversion to USD to take place.
Of course, now the City Council will have to determine how to spend the money (something politicians are accustomed at doing). Nevertheless, it is $5.25 million richer than it started before the payout.
In a blog post, the CityCoin's team seemed to indicate there is a lot taking place to expand the project. This could be something that takes off in 2022. If a dozen or so cities adopt it, we could see an entirely new form of funding arising.
The publicity that this is receiving can only enhance the entire industry. When cities do something like this, it is going to make news. When people see their municipalities making money from cryptocurrency, perhaps that will negate some of the FUD they are bombarded with.
Either way, it is all part of the process moving forward.
If you found this article informative, please give an upvote and rehive.
