Cryptocurrencies have now become the talk of the town, quite literally. CityCoins, a non-profit open-source protocol, has created a medium for users of its platform to earn bitcoin for themselves by supporting their favourite cities.

In fact, two big cities Miami and New York have already launched their own CityCoins. These coins allow citizens to contribute to improving the lives of the people of their own city or another city via crypto funds and earn a reward in bitcoin.

Miami Mayor Francis Suarez had been working towards making the city tax-free and transforming it into an innovation hub for cryptocurrency. The city municipal council has now collaborated with CityCoins to launch the MiamiCoins. The crypto will be representative of the people’s stake in the municipal corporation of Miami.

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New York's new mayor Eric Adams also plans to go big on the cryptocurrency frenzy, even making it a part of the curriculum in schools, as per his interview with CNN. Adams had earlier tweeted that he plans to take his first three paychecks in bitcoins. The city now plans to launch the NYCCoins.

How does CityCoins work?

CityCoins is reliant on the Stacks protocol, which enables smart contracts on the bitcoin blockchain. When users run dedicated computer software, they mine Stacks tokens (the cryptocurrency of the decentralised computing platform Blockstack) which are then sent to the CityCoins system. The system, for example, generates MiamiCoins or NYCCoins every time Stacks tokens (STX) are received by it and dispenses them as rewards.

The likelihood of receiving CityCoins increases as users mine more Stacks tokens and send them to the CityCoins system. Users can retain 70 percent of the mined cryptocurrency. The CityCoins system distributes the remaining 30 percent of the mined Stacks to the digital wallets of municipal corporations of the city the coins originate from.

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The possibility exists that users mining Stacks tokens could also be criminals, to tackle which, the Miami municipal council will not spend a dollar from the donations received for a period of six months. It will allow officials time to react should such an issue come to light.

The Miami city commission began accepting donations (the 30 percent) into a digital wallet from September 2021. Miami's wallet automatically converts the deposited tokens into USD upon receipt. Since then, cryptocurrency worth $21 million has been generated for the city of Miami, the mayor said to CoinDesk TV. He added that when annualised, it amounts to $80 million in revenue, which translates into 20 percent of the city's annual tax revenue, which stands at $400 million.

"When you think about the possibility of being able to run a government without the citizens having to pay taxes. That’s incredible," said Suarez to The Washington Post in September. "We’re going to be the first city in America to give a Bitcoin yield as a dividend directly to its residents," he said.

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How can a citizen mine CityCoins?

Like any other cryptocurrency, anyone can compete to mine CityCoin whenever a new coin is launched. As per the CityCoins portal, miners can compete by forwarding STX into the Stacks protocol. Once per block, a winning miner is randomly selected by a Verifiable Random Function (VRF), weighted by total STX spent.

Since CityCoins is open source, it can be integrated with various centralised and decentralised exchanges.

Crypto enthusiasts who wish to own or trade MiamiCoins can do so through a crypto exchange called Okcoin. It is currently trading at $0.01 and has a market capitalisation of $30.8 million, per CoinMarketCap data.

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(Edited by : Jomy Jos Pullokaran)