Cryptocurrency is the talk of many towns these days – quite literally. Crypto and blockchain appear to coincide with many cities’ agendas to go smart; plus, a growing number of polities in America see these decentralised technologies as a transparent and trustworthy way to perform transactions.
In Reno, Nevada, Mayor Hillary Schieve proposed selling cryptocurrency-based stakes of city-owned properties through decentralised autonomous organisations. Meanwhile, Miami made a deal with CityCoins, a nonprofit that lets its users earn a fraction of the cryptocurrency that they have mined and donate the rest to their chosen city.
There is increasing talk about how cryptocurrency may supplant traditionally minted money, if not simply coexist with the latter as an alternative form of currency. That is certainly not likely to happen on a global scale in the near future. With many cities looking to adopt their own cryptocurrency, however, some are asking: will towns eventually run on crypto?
How can cities benefit from crypto?
Cryptocurrency is normally decentralised due to the nature of blockchain technology. This form of digital money offers plenty of benefits to individual users, but it can also be advantageous to towns and cities. Here are a few ways crypto can improve the efficiency of cities.
Cryptocurrency data and transactions stored in each block of a blockchain are visible to all users in the network. In a city setting, this means that citizens registered in the local crypto platform can view all the expenses of the city government down to the last detail without anything getting in the way. As a result, there is a higher degree of accountability in public spendings, reduced corruption and greater trust in the city administration.
- Automated transactions
Users may work with cryptocurrency platforms like Bitcoin to automate transactions. On a city scale, this makes things like paying taxes and spending on government services so much easier. The number of people needed to process and approve payments are reduced, reducing the relevant costs and increasing the efficiency of intra-city transactions.
- Reduced red tape
Automation combined with accountability enforced by crypto’s transparent nature are one of crypto’s many attributes that let it cut red tape in government transactions. Less red tape means faster processing, less costs and improved productivity.
Which cryptocurrency platforms are cities currently using?
Cities either rely on existing cryptocurrency platforms or develop their own. Here are a few examples that are in use:
Bitcoin is a popular choice among cities looking to adopt cryptocurrency into their economy, from the mediaeval town of Ljubljana, Slovenia, to tech hubs like Tel Aviv, Israel.
Born out of Miami’s cooperation with CityCoins, MiamiCoin aims to eliminate taxation and transform the city into a crypto-hub.
This American platform makes selling Ethereum, Bitcoin and other cryptocurrencies easier and more reliable, and is trusted by cities like San Francisco.
Another San Francisco favourite, Kraken lets users trade cryptocurrency with fiat money and vice versa.
Born in Berlin, Germany, this open-source platform uses a Directed Acyclic Graph to store transactions, making higher scalability possible.