For starters, the value of cryptocurrencies
can luctuate dramatically. The popular
cryptocurrency Bitcoin lost close to half its
value between November and the end of
January, falling from a peak of $67,500 to just
above $35,000; it has since bounced back
a bit to around $43,000. The anonymity of
cryptocurrencies also makes them popular with
criminals. Scams are also plentiful in the world of
cryptocurrency trading.
The group’s proposal expands on the blockchain
technology that supports Bitcoin and other
cryptocurrencies. People who want to support
the city of Miami can invest in Miami Coin (as
can anyone else); part of their investment is
then funneled to the city. The rest is divided up
among other investors in Miami Coin. The way
the system is designed favors people who make
bigger investments and those who get in early.
If it goes according to plan, prices of the new
cryptocurrency go up and the city gets
free money.
Participants in the City Coins project hope that
Miami residents will eventually be able to hold
their identiication, pay taxes or vote using the
blockchain technology Miami Coin is built on --
thereby increasing the coins’ value. The contract
that City Coins signed with Miami does not
mention any of these possibilities.
The proposed arrangement is unusual from an
economic development perspective as well, in
part because City Coins says it is not a company
but rather a kind of collective. Its website does
not list any employees or contact information
besides a link to the messaging app Discord.