Miami was abuzz June 4th with the opening of Bitcoin 2021, one of the largest gatherings of cryptocurrency enthusiasts in the world. The city fought hard for this particular hosting honor, as it attempts to make a name for itself as a digital currency hub. After all, this sort of thing can bring a lot of power and money into the area, as those tech investors gather together to talk shop.
But, upon the success of this event, Miami took its obsession with crypto one step further: It gave birth to its own digital currency!
Miami authorizes Miami CityCoin
On July 22, 2021, Mayor Francis Suarez opened the gates to Miami’s first-ever cryptocurrency, the MiamiCoin. The coin would be designed to benefit the city, with 30% of proceeds going directly to Miami, for whatever uses it deemed appropriate or necessary. Unanimous approval didn’t take long to achieve, and MiamiCoin was opened for digital mining on August 3.
Built on a blockchain protocol called Stacks by a company called CityCoins, MiamiCoin is the flagship product of this particular business. SanFranciscoCoin is also listed as "coming soon" on the CityCoin website. Although not yet available for sale, MiamiCoin will be listed on the OKCoin exchange.
What can you do with a MiamiCoin?
Perhaps the most common question (which leads down a pretty perplexing rabbit hole) when it comes to MiamiCoin is "what can you do with it?" Well, gather ‘round, because it gets interesting here.
You can’t do anything with MiamiCoin in the real world. You can’t even sell it right now, although that potential exists at some point -- once OKCoin lists it. In the digital world, you can use the MiamiCoin protocol like a lot of blockchain protocols, recording information, trading coins between coin holders, and doing other CryptoNerd stuff.
But wait, there’s more.
Despite this lack of liquidity or utility, the city of Miami has already claimed that MiamiCoin has generated nearly $1 million for the city’s coffers. "But how can this be," I can hear the wheels turning in your heads, “they’ve not even offered it up for sale yet.” This is where the rabbit hole gets… rabbity.
How a cryptocoin gets its value
This may come as some surprise, as it was a huge shock to me, to be honest, but cryptocoins are given a value at the time they’re created -- literally any amount the creator wants them to be. It’s based on absolutely nothing, and everybody seems to be pretty ok with this. I’m more of a hard money fundamentalist myself (though I am willing to consider new things), so being told that brand-new baby crypto coins are literally randomly assigned a value BLEW. MY. MIND.
And the fact that a new coin is so easy to create, requiring just a few hundred bucks and a little bit of internet search prowess, was honestly even more alarming. In all fairness, Stacks, the blockchain that MiamiCoin is built upon, was the first blockchain protocol to receive SEC approval under Regulation A+, lending it some level of legitimacy. But many, many, many others in this space are not, and the process remains the same.
So, I had to ask myself, "Self, how is Miami even sure it’s already earned $1 million?" Well, this is all based on the coins that have been mined since the inception of the MiamiCoin and the value at which it started versus the current value that MiamiCoin miners ascribe to it. It really is just all made up until the coin is able to be liquidated, when a more grounded monetary value can be potentially established.
I know. This made my eye twitch, too. (In fact, it takes a few days for these articles to publish, and I can assure you that it’s probably still twitching.)
The Millionacres bottom line
The initial inquiry for this story was whether you should invest in CityCoins, but the fact is that you literally can’t. You can mine them, if you’re so inclined, but what you’ll end up with in the end is anybody’s guess. You can’t even buy them on an exchange at this moment, even if you did want to throw some hard-earned money at a cryptocoin that would benefit your favorite city, Miami.
When they become available to purchase, it’s going to be a different story, I think. While I don’t generally hold to the purchasing of crypto for long-term investments (which is what we do best here at Millionacres), in this one instance, it might make sense to toss a few bucks at the city of Miami. If you’ve read any of my other pieces on crypto, I realize this sounds like someone else is behind the keyboard, but hear me out.
Although a city can’t offer its own currency, more and more retailers are able to accept Bitcoin as a payment method, due to interest from players like PayPal. Accepting MiamiCoin as a payment method isn’t necessarily the same as issuing a currency, provided it all ties back to the equivalent dollar amount and there aren’t any requirements for people to use MiamiCoin when in Miami.
Instead, Miami vendors could potentially use MiamiCoin as a way to promote the city, by offering specials or limited entertainment bundles that only MiamiCoin users can purchase… like you might get as a member of a club. Maybe you get a special Miami swag pack with every hotel night you pay for using the special coin, that sort of thing. So, buying a little MiamiCoin could be useful in a very touristy kind of way, and I’m all for kitsch in its many varieties.
As of the writing of this article, all of this is extreme speculation, since nobody seems to really know what to do with MiamiCoin now that it’s a thing. CityCoins are new, so there’s no track record to go by, and even if there was, crypto is extremely volatile as a rule anyway. If I had a computer with nothing better to do, I might look into mining a little right now while the market is fresh, just in case I wanted to go on vacation in Florida one day.
But don’t be confused, buying a MiamiCoin in no way helps you personally invest in Miami, though it does kick back to the city. So, in a way, you’ve basically just made a donation to the city’s operating budget. It might be easier to send them a check.