Miami is Now Making Money Off of Its Own Crypto Coin

Francis Suarez, the crypto-crazed mayor of Miami that has attempted to make his city the next center of innovation in the industry, has recently generated more than $7.1M in funding for Miami’s government via MiamiCoin. Arriving in the form of a crypto “donation” to the city, it was all made possible by CityCoins, a nonprofit that allows users to mine coins that the company claims can help the wallets of both coin holders and the cities with whom they look to invest in.

According to CityCoins’ website, each time a city launches a new coin, users can mine coins themselves. They are an open-source network that allows developers to create smart contracts on top of the same layer used by Bitcoin, a feature normally reserved for blockchains like Ethereum or Cardano.

“Each time a new CityCoin such as MiamiCoin launches, 20+ unique wallets are needed to activate the token’s mining process,” the site reads. “Once this happens, a 150 block (~24 hour) countdown begins, signaling the start of the CityCoins’ mining process at the end of the countdown period. From there, anyone is eligible to participate in the CityCoins mining process within a given Stacks block and be rewarded for their contributions.”

The system creates a bidding process, sending Stack tokens to the chosen city’s smart contract for a specific block. The more Stack tokens that are sent to the contract, the more likely a user is to win rewards for that block. This creates a system where anyone can compete for the coins, as the process of mining a CityCoins product is completely free of any type of hardware.

Thirty percent of miners’ forwarded Stacks is directed into a crypto wallet for the respective city, and the remaining 70% can be used to earn Stacks or Bitcoin. Winners of the coins through CityCoins’ mining process, are chosen by a Verifiable Random Function (VRF) that takes into account the number of Stacks sent to specific contracts.

Anyone would be forgiven if the process and potential utility sounds convoluted. It becomes even more so after examining what exactly a “Stack token” is.

Stacks, a type of blockchain token originated into existence in 2019, were previously registered as securities with the SEC, a rarity in the crypto space. The company that issued them, however, has since changed course and has chosen to no longer register them. This was based upon the company’s own legal opinion, not the SEC’s.

Bottom line: However this CityCoins systems works and whatever the reasons why anyone would participate in it, it has somehow managed to yield more than $7 million for the city of Miami.

When speaking about the city’s involvement in becoming a fintech hub with The Floridian, Suarez credited timing to why his city is becoming the go-to spot for fintech businesses to flock. “We had an opportunity,” Suarez said. “You had cities across America, urban cities, pushing out innovators through taxation policies, sometimes elected officials saying “F” Elon Musk, or Amazon picks New York and they push them out.”

Suarez, a member of the Florida BlockChain Task Force, also credited his December 2020 viral tweet as a reason for tech’s attraction to Miami. Suarez answered a tweet with “how can I help?” after a user took to Twitter asking people if they believed Silicon Valley should move to Miami. “It was so counter-narrative to the way elected officials were dealing with technology and technologists,” he said, in reference to the Tweet.

According to Suarez, the city’s focus on crypto and fintech has made Miami a tech-trendsetter for other cities. Thanks to tech’s arrival, Miami is the first city to pursue paying workers in Bitcoin, the first to allow citizens to pay taxes in Bitcoin, and hitting huge numbers in the city’s job market. According to Suarez, the city added 8,000 jobs with an average annual salary of $120,000 in the past nine months.

“For the first time in [Miami’s] history, we are now creating high paying jobs,” Suarez said.