MiamiCoin, NewYorkCityCoin… AustinCoin? SanFranciscoCoin? These are not some kind of currencies issued by random organizations. These are the names of cryptocurrencies officially recognized by New York City and the city of Miami, with potentially more to come, and activated by the community rather than the city government. This way, it is truly backed by the community rather than only bureaucrats who have made a unilateral decision. Anyone with a substantive interest in cryptocurrency, especially the Stacks ecosystem, will have heard of these coins.
To understand CityCoins, you must first understand how they are mined. Like Stacks, the token on which CityCoins is based, it is mined with a PoX (proof-of-transfer) consensus mechanism. The miner stakes their Stacks tokens (STX), with the probability of winning the mining block increasing in proportion to the deposited quantity.
If you stake 100 STX for CityCoins mining, 70 STX is distributed to existing CityCoins investors in the form of interest, and the remaining 30% is distributed to CityCoins issuer cities. This means that if you have win a CityCoins mined block, you will get 70% of the STX that other miners spent in that block.
So in what ways does CitiCoins have an essential difference from other cryptocurrencies? In order for a city to gain access to STX distributed by miners, the city must accept protocol donations and agree to specify its intention to become part of the CityCoins ecosystem. From an accounting perspective, the government that issues CityCoins will be able to legally record a Bitcoin balance on their balance sheet.
This opens up a new horizon in the way municipal governments handle cryptocurrency, as well as their attitudes towards them. If a city buys coins with its own budget, there could be a lot of opposition from the media and citizens, and legal issues cannot be ignored. However, if the city acquires cryptocurrency in the form of interest or dividends instead of using fiat currency, it will be able to reasonably avoid political and legal opposition. The budget secured in this manner can be used for the city’s administration and the welfare of citizens, and various coin-based events can also be held.
The greater the awareness of CityCoins, the greater the city’s own popularity and brand value, and the higher the price of its CityCoin. This can lead to more demand for Stacks and a continous feedback loop structure in which CityCoins’ compensation can be also increased. As the number of cities issuing CityCoins increases, these tokens can also function as a fan token for the city, just like Chiliz’s Fan Token.
The first politician to recognize the potential of CityCoins was the mayor of Miami, Francis Suarez. Suarez has long been known as a cryptocurrency-friendly politician, hosting Bitcoin conferences in Miami and attracting Bitcoin miners to Miami. In particular, he declared that he would distribute Bitcoin earned through the MiamiCoin to citizens, which resulted in a dramatic increase in his popularity.
Other politicians in tune with this trend have also begun to jump on the bandwagon. NewYorkCityCoin and AustinCoin have already been issued, and mayors in other cities in the United States are reportedly showing public interest. The preemptive launch of CityCoins in the United States, an advanced cryptocurrency country, could give cities in other countries a justification and motivation to issue CityCoins.
The expandability of CityCoins does not stop here. We can imagine the possibility that we can link to a virtual real estate project like the Mars4 Project, or that coins related to the country may be issued beyond the scope of a city. In particular, it may be a better option for countries with less stability in their currencies or less ability to secure the value of their currencies to issue Stacks-based Country Coins.
In terms of price stability, CityCoins also has a positive factor. CityCoins is a 100% community-oriented token, and since the development team does not hold pre-secured volume, the risk of a plunge in prices due to dumping or rugpulls is significantly low.
Before the start of the CityCoins Project, there were many concerns that the project might present an overly unrealistic vision. However, CityCoins has become a reality through the official participation of major cities and is growing rapidly. Judging from the results so far, it would be too hasty to dismiss these impressive futures as mere imagination.
