Company introduces a new "crypto-currency" for Miami that will supposedly replace taxes. Really? How'd that work out?

Whut dis?

 

Stay with me, cuz we're gonna explain.  And it should be entertaining.

On August 3rd of last year a public-relations website (where companies pay to make faaabulous self-promoting announcements that newpapers often pick up and use as filler) announced that a startup called "CityCoins" was issuing its first crypto-currency, specifically for Miami.  

In a burst of inspired creativity the company cleverly called the new crypto "MiamiCoin," and the company's announcement promised lots and LOTS of benefits, and at NO COST AT ALL.  The city would get lots of money, and all absolutely free!

 Needless to say, this idea was hugely appealing to politicians of all parties, and to credulous morons who believe getting something for nothing is just one more basic entitlement--a law of the universe or something.  Because hey, it works so well for all those grifters in D.C. that it simply MUST be a universal law, eh?

The city's mayor, Francis Suarez, was *totally* pushing this.  Said it offered a way to "collaborate on an innovative project" that would "create resources" for the city "through innovation, not taxation."

The company that introduced the new crypto-currency, CityCoins, described their new digital currency as "empowering citizens" with a “community-driven revenue stream” while spurring new digital city services.

A "community-driven revenue stream," ya say!  Money to "create resources" without having to resort to higher taxes!  That is SO COOL!  It sounded almost magical!  Almost...dare we say it?  TGTBT, eh?

(If you don't get the acronym, keep voting a Democrat, cuz you fit right in with their policies.)

So last August the city signed some sort of agreement with CityCoins.  And six months later, on Feb. 2 of this year, just as the company had promised, the city converted its stash of MiamiCoins to dollars for the first time, putiting $5.25 million into the city treasury.  The mayor, Suarez, hailed it as a “historic moment.” 

That news was reprinted in 184 publication and websites.  Cuz, FREE MONEY to replace taxes!

But for CityCoins Miami was going to be just the start of a nationwide rollout: Last November they announced a similar cryptocurrency for New York, and planned to release a coin for Austin, Texas, "real soon."

So you can understand how, with the crucial help of Miami’s mayor, this magical new "business plan" would get peoples' attention.  And sure enough, with the enthusiastic support of the mayor and a local resident, on Feb 2 of this year Miami actually converted "MiamiCoins" into $5.25 million dollars. 

See??  It really is possible to get somethin' for nothin'.  Wait...something seems a bit...off.

Interestingly, neither mayor Suarez nor the company pushing the idea explained how one could get money OUT of the scheme without anyone first putting money INTO the system, and apparently no reporter bothered to ask.  But if you went to the company's website you got a brief explanation.  Here it is:

MiamiCoin provides an ongoing crypto revenue stream for the city, while also earning STX for MIA holders. MiamiCoin can be mined or bought by individuals who want to support the Magic City and earn crypto from the Stacks protocol.  MiamiCoin additionally benefits holders by allowing them to Stack and earn BTC through the Stacks protocol.

The city of Miami can elect to use its growing crypto treasury to benefit the city and its constituents — think new public spaces, improvements to infrastructure, hosting city events, recruiting startups, and more.

Wow!  "New public spaces, improvements to infrastructure, hosting city events...and MORE!"  And sure enough, as mentioned twice above, the city exchanged its stash of "crypto treasury" for $5.25 Million.  Yay!  Win!  And the credulous in Miami were...absolutely smitten with their love for the new magic money machine.  Here's a sample:

As you guessed, free money gets the attention of both politicians and speculators.  So where did that money come from?

"Investors."  Okay.  So how did the company tell investors they could make a profit?  Well, the company planned on getting a few million in revenue from crypto fans paying cash to compete to win blocks of coins they could then "mine" to get rich.  Cuz ebryone know dat a single bitcoin bees worth mebbee $60,000.  Well, maybe $30,000. Anyway, like sellin' crack, homes!

 But the bulk of the payoff was expected to come from pure speculation, just as has been the case with all crypto-currencies.

Okay, so how did "investing" in MiamiCoin work out?  Well since launching about nine months ago, the crypto-currency has lost about 88% of its peak value just after the rollout.  Here's that graph from the top:

But of course the investors were all savvy bitcoin "miners" so they knew exactly what they were getting into, right?  So...caveat emptor, baby.

If you've never run across that very savvy Latin phrase you should probably keep voting Democrat, cuz you fit right in to their plans.

It's also worth noting that last October the company got the city to sign what was officially described as a "gift agreement" with the company, which the company said was necessary to enable the city to redeem coins for dollars.  Hey, no alarm bells there, eh?

Wait...the title "gift agreement" strongly suggests that the city doesn't actually have an enforceable interest, but can only cash in MiamiCoin for dollars if the company chooses to allow it--cuz "gift."  Hmmm...

Meanwhile the company rolled out its "NYCCoin."  Since the start of this year it's dropped 68%.  But hey, the stock market is down ten percent since the start of the year, so...you know.

Last month at an annual Bitcoin conference hosted in Miami, Suarez touted his plan to let city employees receive their salaries in at least one cryptocurrency.  He mentioned Bitcoin, not MiamiCoin.

Emails between the company and city officials reveal a close partnership to promote MiamiCoin to the local tech community. The documents show Patrick Stanley, who identifies himself in interviews and on social media as a CityCoins “contributor” and “community lead,” was the most frequent point of contact for city officials.

Stanley has been involved with a number of projects based on the blockchain technology that enables crypto. One of those is a company called Stacks, which created the infrastructure MiamiCoin now depends on. As an aside, Stacks, where Stanley was once an executive, has raised $94 million in investments since 2019.

Stanley started CityCoins with the promise that it would generate income for local governments and spur tech innovation among city residents.

Exactly how it would generate income isn't explained, but the elites and hipsters know, so that's all that's needed.

Stanley paints a stirring picture of digital currency: "Our whole goal is to increase happiness, health, and wealth for citizens. We’re not a replacement for governments, we want to increase state capacity.”

Gosh that sounds so...familiar somehow.

Stanley argues that MiamiCoin will be used for local business transactions, facilitate software development, and even one day furnish a source of a universal basic income for residents.  His company, Stacks, has contracts with CityCoins to build "gaming, educational, and financial apps" for cities that adopt the crypto-currency.

Wait...his company has contracts with the company pushing this whole scheme?  Hmm...seems like he'd have an obvious interest in promoting the scheme, eh?

Ah, don't worry:  If anything shady was afoot I'm sure biden's Department of "Justice" would stop it, eh?

Even as MiamiCoin’s price has plunged by 95%, Stanley insists the digital currency will have practical applications soon.  But so far neither the city government nor private merchants appear to accept the cryptocurrency.

CityCoins was able to point to just one potential city project (proposed but not yet implemented) involving a city contractor that would use the cryptocurrency to reward residents for reporting incorrectly parked rideshare scooters. At this point the entire endeavor remains a pure speculation.

Now: my reason for telling this story is that historically, when a society is corrupt and staggering, and the government has turned its currency into "fiat money" (i.e. the amount printed has no connection to reality but is whatever the leader orders), people turn to increasingly-goofy speculative ventures.  This is one.

If the founders/movers are politically connected they'll try to get the ruling faction to adopt and protect the scheme, usually by giving the rulers a piece of the action, but sometimes by simply playing to the rulers' desire to look innovative or virtuous.  That's also happening here.

As with all investments in companies whose success depends on government connections, rumors become the main source of jumps in the value of an "investment."

Of course since the stock market is down, one wouldn't be too surprised that even though crypto isn't actually a stock, it's down too.  Yeah, that's probably the explanation.  Surely it'll all end up just fine eventually.

And of course there's that matter of the $5 million that Miami got from converting its stash of MiamiCoin to dollars.  Doesn't that show that the idea works?

Ever hear of a guy named Bernie Madoff?  A "money manager" pays early investors what looks like a huge return on their investment...to get their friends to invest lots more money.

Is that what was going on with CityCoins?  Hard to say.  But $5 million is quite a  payday from a company with a mailing address in a Los Angeles strip mall.  Of course no one in Miami thought that was the least bit unusual.  Perfectly normal.

Source: Quartz.com

If you want a quick explanation of how all "crypto-currency" is "mined," click here.  But don't be surprised if you find contradictions in the article.