On a sweltering heat On Tuesday last August, a new cryptocurrency was born. It was called MiamiCoin and it was styled as a way for crypto savvy to support the Magic City and maybe earn some cryptocurrency in the process. A mind-boggling press release said MiamiCoins were “programmable, city-based tokens that unlock a new community-driven revenue stream for local governments while bringing collaborative technology to citizens and the stakeholder ecosystem.”
In reality, you can do two things with MiamiCoin: mine and stack. The cryptocurrency, created by Delaware-registered company CityCoins, has a circular life cycle. To get some, you need to buy another cryptocurrency token called Stacks – currently priced at around $1 per unit – and use it to bid on MiamiCoin. Only one lucky bidder, or “miner”, can get MiamiCoins every 10 minutes; losers get nothing but the feeling of having lost their Stacks. Whoever wins MiamiCoins can sell them from Tuesday for $0.0015 each on Okcoin, the only exchange that accepts them. Or they can park (or “stack”, in crypto parlance) them to receive periodic rewards in Stacks Tokens. Those Stacks rewards come straight out of the wallets of more people bidding (and losing) on MiamiCoins. Stacks, in turn, can be stacked to earn Bitcoin rewards.
Michael E. Bloomberg, a visiting researcher at Cornell University’s Urban Tech Hub who has served on the board of Massachusetts local currency company BerkShares, likens MiamiCoin to a lottery. “You put in one kind of resource and you get something else out of it,” he says. “If you win the lottery, you will be rewarded with a coin that makes no sense.”
MiamiCoins have no use in their namesake city: You can’t pay taxes, buy a bus ticket, or rent a condo in Miami with them, even if proponents say usage scenarios will emerge over time. That’s not to say MiamiCoin was randomly christened, as many other coins are opportunistically named after dog breeds or viral TV series. While 70 percent of all stacks issued by miners competing for MiamiCoin go to stackers, the remaining 30 percent goes to a cryptocurrency wallet destined for use by the city’s government. CityCoins framed that as a way to show its support for the city and help fund valuable projects.
As of April 26 Miami’s wallet holds over $13 million worth of Stacks† “A CityCoin automatically generates revenue that can be pushed back into the city itself,” said Patrick Stanley, a Los Angeles-based technologist who was part of Stacks’ core team until 2020 and is now CityCoins’ chief representative. The nonprofit is supported by crypto mining communities Syvita Guild, Z1, DoubleUp, Freehold, and the Stacks Community.
Stanley says MiamiCoin’s mining method is no different from other standard ways of minting cryptocurrency, with different parties competing to maintain a decentralized system, deploying different resources. “Just like in bitcoin [mining] you spend electricity, with CityCoins you spend cryptocurrency.”
Cryptocurrency projects depend on the skillful leverage of incentives. A popular technique is the use of celebrity endorsement to encourage people to participate in a new cryptocurrency. In a way, CityCoins is doing the same thing: it’s not a government-led project for the city of Miami, but shortly after its June 2021 launch, it earned praise from Francis Suarez, the cryptocurrency-heaped mayor of the city, who tweeted that the first coin was “natural” in Miami. In a Washington Post In a September interview, Suarez went so far as to say that the scheme could make it possible to “run a government without the citizens having to pay taxes”. Confusingly, Suarez later told CoinDesk that MiamiCoin could one day be used to pay taxes in the city. Following a vote by city commissioners, in February, the Miami government withdrew $5.25 million from its wallet — classified as a CityCoins donation — which will be spent on a rent relief fund.
