CityCoins is a new project built on top of Stacks, where people can support their favorite city’s treasury, earn STX stacking rewards, and use the Citycoin as a currency in applications. Here’s everything you need to know about CityCoins, in simple terms. 🔍
What are local currencies? A touch of history
Localized money is as old as money itself, with different communities using different means of exchange – whether it be seashells, salt, or metals. Over time, money gradually standardized using defined measures of gold and silver, making global commerce more efficient. Florence’s gold Florin, for instance, was used as a currency for 400 years. 😎
As recently as the mid-1800s in the U.S., there was an era of “free banking,” where banks were chartered by states and issued their own currencies, usually backed by gold and silver. The era was so free that “the notes were also of varying size and color, and forgers had a field day: Approximately a third of all paper currency during this period was counterfeit.”
To add to the confusion, the notes issued did not trade one for one since some banks were larger and had more capital and others seemed a bit more precarious, so there were premiums and discounts to take into account. That era was a more localized version of today’s nation-state currencies.
What are CityCoins?
CityCoins is ushering in a new era of local, decentralized, programmable currencies.
CityCoins is the brainchild of Blockstack’s former Head of Growth, Patrick Stanley, who designed the concept for Stacks’ smart contract protocol. Citycoins take advantage of Stack’s Proof Of Transfer consensus mechanism used for mining STX It is what anchors the Stacks network directly to the Bitcoin blockchain, recycling the energy used to mine Bitcoin in order to secure the Stacks network.
Miami and New York City are the first cities to launch their own coins and the CityCoin community is actively lobbying for other cities. MiamiCoin (MIA) and NYCCoin (NYC) can be purchased and traded exclusively on Okcoin. Both tokens can be stacked to earn Stacks (STX), which can in turn be stacked to earn Bitcoin (BTC). A truly virtuous cycle if there ever was one. 🔥
How does CityCoin mining work?
To mine CityCoins, miners spend STX to compete to win the next block in a weighted lottery. The current block reward schedule roughly echoes the Bitcoin block reward system, including periodic halvings.
From the STX spent by miners, 30% go directly to the city as a donation. The city can use the STX as they see fit. Miami, for example, just announced that they will use $5 million earned from their CityCoin towards funding a needs-based rental assistance program. Another use case would be to stack the STX in the city’s wallet and earn Bitcoin rewards.
Blocks occur (as with Bitcoin and Stacks) about every 10 minutes. The winner of the block reward is random but based upon weighted probabilities. So if Bob spends 1,000 STX and Alice spends 2,000 STX, then the total amount committed to compete for that block reward is 3,000 STX and Bob has a 33% chance of winning the block reward and Alice a 66% chance.
Once someone acquires CityCoins, they can sell on Okcoin, stack their CityCoins to earn STX, or choose to hold them for future use. CityCoins can be stacked on our Earn platform or via the CityCoins site when using the Hiro wallet. What’s best: We charge zero fees for Earn. 👀
How are CityCoins profits used?
Since cities benefit from the mining process (they get 30% of all the STX spent on mining), they benefit even more as their CityCoin becomes more valuable. That is, the more valuable each CityCoin becomes, the more STX that will be likely spent to mine to acquire those coins. The more STX spent to mine, the more STX the city will receive and will also be paid out to those who are stacking their CityCoins. Thus, cities and the CityCoin community are aligned in the goal to imagine and implement use cases for their CityCoin. Some use cases may be individual to a particular city, but many use cases that work well in one city are likely to work as well in another.
This has been one of the more exciting areas of the CityCoin project as cities work with the community to create innovative ways to create value for their coins and for their citizens. There is even a Stacks CityCoin accelerator as well as grants available to assist individuals, teams, and cities in building the best ways to serve them.
Some are even working on structures to use the CityCoin project as a method of city finance. Mayor Suarez of Miami has suggested that it could be one way to reduce or even eliminate city taxes over time. Others, such as City Packs, are preparing to roll out NFT projects to raise money for K-12 blockchain, bitcoin, and cryptocurrency curricular and after-school education. Still others are building wallets for ease of use. The list is long and is growing daily. 🚀
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