Cryptocurrencies grab the spotlight in US cities debates
The news comes from Florida: The City of Miami voted in favor of accepting the gift contributions generated by the MiamiCoin program, currently valued at 4.3 million dollars. The decision “represents a major milestone in Miami’s quest to become a crypto innovation hub. Funds that will directly impact the lives of all our residents”, wrote Miami Mayor Francis Suarez.
Where does this money come from? Basically, the city is earning nearly 5 million dollars from people creating its cryptocurrency. Backed by the independent crypto developer CityCoins, MiamiCoin was launched last August and allows users to mine coins to make money while supporting the city, as 30 percent of the yield is collected in a wallet reserved for the local government. At current rates, the equivalent of about 2,500 dollars is transferred into the city's cryptocurrency wallet every 10 minutes, with an average of 35 miners competing to create MiamiCoin within the same period of time.
The Major explained the city is not yet going to spend the funds and a significant due diligence will be completed before confirming any investment. Among the uses that have been proposed for the funds there are programs to mitigate climate change, new initiatives for underprivileged communities, and crypto education and incentives for tech entrepreneurs.
An additional benefit of MiamiCoin is the possibility to enable decentralized applications, to be created by local stakeholders for the good of the community. Over a hundred developers are currently working on new applications using MiamiCoin’s open-source protocol for the ongoing MiamiCoin Makers Month hackathon.
Other US cities are carefully watching at Miami’s experience and craving that unexpected flow of incoming resources. Some state and local governments have already started pilot programs to leverage cryptocurrencies as payments methods for taxes and services.
Investment firm Blockchains LLC asked the state of Nevada the authorization to build a crypto-friendly Smart City in Storey County. The idea is to design a community entirely based on blockchain, with its own government, taxes, and courts, where only digital currency payments will be accepted for any good and service, both private and public.
While this project is yet to be started, the City of Williston in North Dakota accepts cryptocurrency payments for utility bills. It’s the first municipality in the State of North Dakota, and the third in the nation, to offer this service. “There are a number of advantages to utilizing these online payment methods including security, convenience, and cost savings,” explained Finance Director, Hercules Cummings.
And cryptocurrencies are making a strong entry even into the election for the next Mayor of New York City. The Republican candidate Curtis Sliwa disclosed his plan to make NYC the most crypto-friendly city in the US, making it possible to pay taxes, fees, and fines in cryptocurrency, and opening more ATMs for Bitcoin and crypto to encourage local businesses. Eric Adams from the Democratic Party is also in favor of New York as a hub for bitcoins.
Cryptocurrencies, from environmental calamity to climate-friendly technologies
The environmental impact of blockchain and cryptocurrencies is a hot topic, since the amount of energy needed to power their network is staggering.
Some analysts proved the Bitcoin network is currently consuming more energy than several countries, including Kazakhstan and the Netherlands, so it is considered to be exacerbating the production of the greenhouse gases that cause climate change. In addition to mining, lots of power is also needed for transactions, which is enormous in comparison to traditional credit cards: if a Mastercard transaction is estimated to use just 0.0006 kWh, every Bitcoin transaction consumes up to 980 kWh, according to some independent studies (but the Ethereum Foundation is working on a different verification method that, being based on Proof of Stake, could cut energy cost of each transaction by 99%).
Despite these issues, United Nations experts believe that cryptocurrencies and the blockchain technology can play an important role in sustainable development and even contribute to climate change mitigation. The three main areas where blockchain can accelerate climate action are transparency, climate finance, and clean energy markets.
Transparency is a key attribute of blockchain-based applications, and this might become particularly relevant in regions with weak institutions and high levels of corruption. For instance, the World Food Programme is leveraging blockchain to ensure that aids and resources get to those who need it most: successful projects are being piloted in Pakistan and Jordan. A transparent monitoring system could contribute to improve waste management and prevent illegal transfers and uncontrolled export, or to tackle illegal fishing.
It can also be beneficial to smart agriculture. As more and more environmental data sets – such as weather patterns or IoT sensor readings – are fed onto blockchains, a wider range of environmentally-conscious smart contract applications becomes available to support the management of crop yields, soil quality controls, carbon offsets, and more. Interesting examples relate to regenerative agriculture programs, which incentivize communities around the world to reduce their carbon footprint through more sustainable land-use practices and a wiser combination of planting trees and conservation.
Blockchain can boost climate financing by securing and favoring investments that contribute to carbon neutrality. Climate data is incomplete and unreliable in many countries but, if carbon markets are scaled up, businesses and industries will be more confident in their transition to low carbon technologies. Blockchain could be an important part of accelerating the take up of renewable and clean energy sources such as wind and solar, providing a reliable framework to trade these sources that are, by their nature, intermittent and decentralized.
Despite all these potential benefits, the huge energy consumption associated with cryptocurrencies and the blockchain technology is one of the main hurdles that needs to be overcome, and many players in the industry are working to address the issue. If we want to make a positive impact on the climate crisis, more technical research is needed, as well as more international dialogue, involving technology experts, scientists, and policymakers.