Cointelegraph recently spoke with Miami Mayor Francis Suarez after he announced that Miami residents who have a digital wallet can receive bitcoin earnings.
The company that is building the infrastructure to put bitcoin profits in the hands of its citizens is CityCoins, an open source protocol that provides pooling mechanisms for cities.
Miami and New York are the first two cities to start fundraising through MiamiCoin and NYCCoin, respectively. However, neither Miami nor New York actually owns MiamiCoin (MIA) or NYCCoin, and instead, their treasury is full of heaps (STX).
According to a presentation at the 2022 North American Bitcoin Conference in Miami by CityCoin community leader Andre Serrano, MiamiCoin raised $24.7 million from STX and NYCCoin raised $30.8 million for city coffers.
In order for residents to be able to buy CityCoins, they must first purchase STX from an exchange such as Okcoin or Binance. On Tuesday, Coinbase planned to list STX for trading, but delayed the launch until further notice.
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Stacks is a blockchain trying to make Bitcoin (BTC) programmable. CityCoins are redeemable tokens built on the Stacks blockchain and one contract of CityCoins is distributed per city. Cyrano Sa:
“CityCoins has the potential to change how people interact with their cities by aligning incentives between local governments and city residents.”
He added that CityCoins could “unleash the city’s cultural value while providing new opportunities for creators,” comparing how Los Angeles has been known to Hollywood with Miami’s potential to become known as the crypto capital of America if MiamiCoin succeeds.
On a high level, it is the community that is baffled over the creation of CityCoins. CityCoins mining is performed by sending STX tokens to a smart contract in a specific Stacks block. The miners are then rewarded with new CityCoins tokens. Unlike bitcoins, CityCoins do not have a strict limit.
According to Serrano, CityCoins gives the city a business model by offering residents incentives to generate passive income: 30% of the mining cost goes to the city’s reserve wallet, while 70% of the mining reward is given to people who choose to invest. their CityCoins.
He explained that the more MiamiCoin is worth, the more miners are willing to mine it, which increases the number of STX blocks they are willing to deposit. As a somewhat indirect result, money is growing in the treasury, and since Stacks provides bitcoin, the proceeds from the MiamiCoin mining operation can then be distributed as dividends to coin holders.
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CityCoins are programmable, which means that smart contracts can be developed around CityCoins tokens. Serrano offered some real use cases, including giving residents discounts on public transportation or shopping locally, or even the ability to pay for NFTs. Tokens can also be used to create local real estate records and documents.
How the money will be distributed in Miami is yet to be determined. However, Serrano suggested that the priority for the city is to improve the public education system. Once the city decides to claim and convert the STX into USD to fund a community project, residents can start receiving profits in BTC.
To get a general opinion on how Miami spends its money, MiamiCoin hosts an app called MiamiVoice that allows citizens to submit and vote on ideas.