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.
Source
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.
Further reading on this topic and related article.
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Dividend for all residents of Miami City?! Wow! Never heard of such a thing done by a local government, not until this time. All I know is that they are very innovative in extracting money from the people. But this kind of alignment of interest between the local government and its people is really something new. Also, that idea of voting with city coins could be a dream come true. At last, people can now send feedback to local officials whether they are satisfied or not with the kind of public service they receive.
It wouldnt be voting as in the traditional sense. Now we are dealing with the idea that when we support a city's policy, we will buy the token. If not, we will sell it or pass it.
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Such feedback mechanism is far better than traditional voting. Somehow the centralized nature of a city's policy can now be "corrected" by the people's "voice" through the token.
nice article, are we returning to the city-state times? xD
Didn't knew citycoins were a thing.
Are they centralized?
Cheers!
I am not sure but the STK can be converted into Bitcoin.
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I really want to see Detroit jump on board with this. That is a city that could really use something in the vein of CityCoin to revitalize it.
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There are a lot of cities that could really be helped out by this.
It is an interesting idea. Imagine hundreds of cities all generating around $50 million annually. That ends up being a lot of money being fed into the local economies.
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Yeah, that would be game changing. Cities like Detroit could really use that money!
Even this litany of benefits fails to note that citycoins can enable a rational taxation scheme in which the beneficial development of urban centers is actually profitable economically to residents, and pay them financially for their contributions to that rational and beneficial development. While taxation is theft, payment is justice, and rational civilization will eventually literally produce reverse taxation as competition produces it's inevitable fruits.
Thanks!
I have been very curious to see what great innovations would come from further development by state and government in general. Still not sure if this is one of those great innovations yet but I am still happy to see the development! Thanks for sharing 😁
It depends upon if the governments are innovating or trying to maintain control.
The latter is only going to try to stifle things. That is not good for anyone.
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It's really great that city coins can make people more crypto savvy. I saw that project getting promoted by a bigger Crypto influencer earlier last year.
But reading deeper into their concept made me come to a bad conclusion of their doing. The big turndown is, that the execution of the different proposed actions, as soon as funding, shall go back to the city as an entity. So it's making charitable crowdfunding for the local government. Automatically, therefore, getting political support and influence, that's a bad cycle to get in for a crypto project. The Point where the 'trustless' and the 'have to trust' touch for the real-world implementations looks potentially broken. Maybe they realized the same and decided therefore to not even try but just push the tokens back to citizens of the city - good move.
It depends. If it becomes a large amount of the Treasury, and the benefit is reduced in other fees and taxes, then it is fine. Yet we know that is not likely to have happen.
Thus, giving people the money is the best move.
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always.
The extra dividend could be quite nice and I like how they tie the debt more or less to BTC. How does STX or whatever guarantee that the pool has enough liquidity incase people want to leave?
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Wow, what a cool concept! I'm relatively new to crypto, myself, and it seems like every day I'm learning of a new way it can add value/security to our daily lives; often in ways that are entirely unexpected.
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These tokens remind me of what it will have been like to see Nigeria have its own city tokens they will be a massive fight of who's token is doing better and why and the mining part will have been Epic, with the bigger cities wanting to stay on the top and others trying to make their city tokens meet up to people standards, apart from that they will have had change all payments methods to each city tokens, I say this because I see how many people are tried for using the naria whose value is low. The rich will just keep getting more to that they can brag about how they use their tokens to buy themself a new car or build a new house or even employ people to mine this token for them. I guess I will try to make a post about it too.
the point is they are so many people they will switch to these tokens even if they are just meme tokens named after their city.
To me, the most important aspect of this is the education of the masses on crypto. As people are "forced" to learn about this (if they want to take part in the rewards) it will continue to spread crypto knowledge throughout the cities allowing the population to start wondering, "What else is out there in the crypto world?" This can only have a positive effect on mainstreaming Bitcoin and the rest of crypto in general. The more the people participate and begin to understand what crypto offers, the faster it develops and becomes part of everyday life.
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This reminds me of the state quarters. I had friends collecting and trading their favorite states some even determined to collect them all.
City Crypto is a great idea, but what about State and or Federal crypto coins?