MiamiCoin is the first ever urban cryptocurrency, but how will it be used? It’s only been two months since the city hosted the participants of “Bitcoin Miami” and promised to become the Bitcoin (BTC) capital of the world. Now Miami has re-captured the news headlines by introducing its own digital currency, MiamiCoin (MIA).
The Californian city will be the first to have its own crypto coin, which is being developed in cooperation with CityCoins. Let’s take a look at how the coin works and see if (and how) it can benefit the city and investors.
How it’s working?
CityCoins built MiamiCoin using a programmable blockchain called Stacks (STX). From August 3, people can mine MIA, a process that generates new coins and supports the network.
The point is, individuals can use STX to mine MiamiCoin and 30% of the proceeds will go to Miami. The city can use this cash to fund any project, including, according to Mayor Francis Suarez, helping the homeless or funding police initiatives.
MIA owners can lock the remaining 70% of the money to earn rewards. It’s remarkable that Bitcoin rewards can be earned this way. However, the process of mining, buying MIA and earning rewards is not entirely clear.
Can you spend it?
You will never be able to spend MiamiCoin as currency in the city. Federal law prohibits cities from creating their own currencies. So the US dollar is the only currency you can spend in Miami.
According to CityCoins, the coins will become more useful over time. On their website, it says, “CityCoins communities will build applications that use tokens for rewards, local benefits, access control (digital or physical spaces), trading, loans, smart contract fulfillment, and more.” For example, coins can be used to get discounts at local businesses.
What are Stacks?
Stacks is an interesting project as it is on the Bitcoin platform and has smart contract capabilities. It’s a layer-2 solution, so it runs on top of your existing blockchain. Smart contracts are small pieces of code that allow you to program your blockchain database. One of the downsides to the Bitcoin ledger is that it cannot store smart contracts, so if the Stacks technology works, it can add a lot of utility to Bitcoin.
Stacks also claims that its language (Clarity) is unique in that it is coded in a language that people can actually read. In addition, investors can earn both BTC and STX by “stacking” their coins. This is the same mechanism that would pay MIA token holders.
The stacks initially leaned towards regulatory caution, which has reversed somewhat. In 2019, when it introduced the STX token to the market, it was the first ever token to qualify for the SEC. This SEC approval meant that the STX was treated as a security that could only be bought and sold from registered stock brokers. Unfortunately, it could not be traded on American cryptocurrency exchanges.
In January this year, Stacks announced that it had completed the process of becoming a cryptocurrency, and US exchanges can now trade STX. So far, only Okcoin has exchanged it.
Miami officials should first establish how the coin will be used, how ordinary Miami residents can buy it, and what benefits they get from mining and stacking the coin. Only then would it make sense to launch a cryptocurrency – not before that.
05-08-2021, Mr Advice TEAM