Miami's Mayor Backed MiamiCoin Crypto -- Then Its Price Dropped 95% (qz.com) 91
An anonymous reader quotes a report from Quartz: On Feb. 2, the city of Miami cashed out its cryptocurrency MiamiCoin for the first time, depositing $5.25 million into city coffers. Miami mayor Francis Suarez hailed it as a "historic moment" and predicted the cryptocurrency could one day even replace municipal taxes as the government's primary source of funding. MiamiCoin's creator, an organization called CityCoins, has been no less enthusiastic, portraying the coin as a financial experiment that will empower citizens with a "community-driven revenue stream" while spurring new digital city services.
Miami is not the only city with big cryptocurrency dreams. CityCoins announced a similar cryptocurrency for New York in November 2021, and plans to release a coin for Austin, Texas, soon. Other cities have launched their own crypto ventures: Forth Worth, Texas, for example, will soon be running bitcoin mining rigs in city hall. But only Miami's mayor has thrown his full endorsement behind a CityCoin-branded cryptocurrency so far. After promoting MiamiCoin to residents and investors since its launch in August, the city of Miami received millions of dollars through its agreement with CityCoins. Over the last nine months, however, MiamiCoin has lost nearly all of its value, falling about 95% from its September peak to just $0.0032 as of May 13. Its rapid descent has burned investors on the way down, muting the dreams of Miami's city leaders, and possibly raising red flags for regulators now investigating cryptocurrency transactions.
Miami is not the only city with big cryptocurrency dreams. CityCoins announced a similar cryptocurrency for New York in November 2021, and plans to release a coin for Austin, Texas, soon. Other cities have launched their own crypto ventures: Forth Worth, Texas, for example, will soon be running bitcoin mining rigs in city hall. But only Miami's mayor has thrown his full endorsement behind a CityCoin-branded cryptocurrency so far. After promoting MiamiCoin to residents and investors since its launch in August, the city of Miami received millions of dollars through its agreement with CityCoins. Over the last nine months, however, MiamiCoin has lost nearly all of its value, falling about 95% from its September peak to just $0.0032 as of May 13. Its rapid descent has burned investors on the way down, muting the dreams of Miami's city leaders, and possibly raising red flags for regulators now investigating cryptocurrency transactions.
The Worgl Miracle requires 10% monthly tax (Score:5, Interesting)
The original version of a local currency was in Worgl, Austria during the Great Depression. It was an expiring stamp currency- for a bill to remain in circulation, somebody had to take it to the central city bank, pay 10% of its value, and get a new monthly stamp. After 10 months, the bill was effectively worthless but still in circulation.
This process defeated the natural inflation that exists when you inject cash into an impoverished area, and without this process, any new local currency will lose value quickly.
Re: The Worgl Miracle requires 10% monthly tax (Score:4, Informative)
Local currencies have existed for much longer than that. The United States didn't have a national currency until about a century after its founding. Before that, it was all privately issued money.
Many communities in the United States continue to this day to use "trade dollars", which are a privately issued currency pegged to the USD.
Re: The Worgl Miracle requires 10% monthly tax (Score:5, Insightful)
The US also used to have local banks go under -- taking everyone's money with them -- all the time, and suffered from frequent crippling depressions.
Controls over banking and investment in the 30s, along with substantial progressive taxation and several other factors brought things under control for years and is clearly the way to go.
But pointless and expensive wars, poor energy policy, the siren song of greed, and a rather stupid attitude that because things were basically all right it was safe to dismantle the regulations that kept things basically all right, have been causing the economy to break down again over the past few decades.
Re: (Score:3)
Progressivism is the root cause of most of the violence American finds herself involved in.
The actual track record of most non-Progressives proves otherwise. Nixon? Reagan? HBush? WBush? Ever heard of them?
American culture has been steeped in warmongering for about three centuries. Progressivism did not invent it. But Progressivism has been so successful that war mongering does need some Progressive colored lipstick to keep relevant.
Re: (Score:3)
Neo-cons are every bit as dangerous but don't ignore the progressive you are defending Obama for example escalated every middle eastern conflict he could, and started an entirely unnecessary conflict in Libya because reasons.
As we speak Chuck/Nancy/Joe and falling all over themselves to flood Ukraine with weapons that we have no fucking clue how will be disposed other than its damn near certain they will sold to someone who will shoot them at our boys and girls eventually.
At the end of the day though - you can't escape the simple fact American progressivism is what has created the large central government that can engage in foriegn wars. Without Wilson policies and the federal income tax - there is no US force projection.
Progressiveness kills. That is before we even look at the social impacts of things like abortion, no fault divorce, etc - that created two income households warped our moral senses and enabled us to continue to fight foreign wars..
This comment is the very definition of red-pilled.
Re: (Score:3)
Progressiveness kills. That is before we even look at the social impacts of things like abortion, no fault divorce, etc - that created two income households warped our moral senses and enabled us to continue to fight foreign wars..
Did the schools you attended, by any chance, forget to include history in their curriculum? There were far bigger and bloodier wars back when women were "in their place", gays were in the closet, and whatever else you're seeing though those rose-colored glasses when you view the past.
In fact, legalized abortion actually correlates with a corresponding reduction in crime. Turns out when you don't force parents to raise kids they never wanted, you have less of them growing up to be criminals. Real shocker,
Re: The Worgl Miracle requires 10% monthly tax (Score:4)
Your willful ignorance is not an argument. That you slavishly repeat easily disproven lies is not an argument.
American imperialism predates the Civil War. In fact, it enjoyed the strongest support amongst those who were decidedly non-Progressive. The Mexican-American War of 1846, a is a bit before Wilson's tenure, you might notice. As is the Spanish-American War of 1898.
And I love how you squeeze in the insiuation that Americans were so peaceful if only women were barefoot and pregnant and kept in their place. But I suppose it is true that modern American rightwing attitudes and those of Incels have much in common.
Re: (Score:2)
Re: (Score:2)
Many communities in the United States continue to this day to use "trade dollars", which are a privately issued currency pegged to the USD.
I have never heard of this. Can you give an example?
Re: The Worgl Miracle requires 10% monthly tax (Score:2)
I'm guessing you can start by looking here:
https://en.m.wikipedia.org/wik... [wikipedia.org]
Re: The Worgl Miracle requires 10% monthly tax (Score:5, Informative)
I have never heard of this. Can you give an example?
Ithaca Hours [wikipedia.org] may be the best known private currency scheme.
I believe Ithaca Hours are no longer circulating. The scheme failed for several reasons, including widespread counterfeiting.
One rationale was to allow people to donate to the homeless with a currency that couldn't be used to buy drugs, but drug dealers were happy to accept IHs because they had enough margin to absorb the conversion to dollars.
Another rationale was to keep economic activity local, which makes little sense. Prosperity increases with wider integration, while autarky leads to stagnation.
Re: (Score:2)
A lot of those currencies I saw listed were also intended for use in programs for fighting poverty, homelessness, and so forth. They're just fancier coupons and vouchers. They're not being used by those cities a primary currency, and the city workers are not being paid in Monopoly Money.
Re: (Score:3)
Paying employees with anything other than legal tender has been illegal in America since 1938.
Fair Labor Standards Act of 1938 [wikipedia.org]
Re: The Worgl Miracle requires 10% monthly tax (Score:2)
You should read the link you posted. Nowhere is preventing drug purchases mentioned in the article and according to the article as of 2015 they still had a board.
Re: (Score:2)
Nowhere is preventing drug purchases mentioned in the article
One of the founders of Ithaca Hours did an interview on NPR many years ago where he specifically said discouraging substance abuse was a goal. I don't know if that was an explicit objective of the project, but at least one of the founders thought it was important.
Re: (Score:1)
I like the ones pegged to time, it speaks to my Marxist roots to value everybody's time the same.
But all of these still have the same problem that only Worgl solved- an injection of cash WILL result in inflation.
Re: (Score:3)
Right, but that local money still had value behind it - you did work, you got paid, you used that currency to buy food and pay rent. The difference here is "we invented a new investment instrument that's backed by nothing, and we believe it can replace our existing revenue streams!" It's stupid: it's no difference than the local city manager investing the coffers in junk bonds because someone told him it was a sure thing (which happened several times in the past).
If MiamiCoin was intended to be a currency
Re: (Score:2)
... that local money still had value behind it - you did work, you got paid, you used that currency to buy food and pay rent.
This is fundamentally what made these schemes function as money. The notes were transferable IOUs. Cryptocurrencies don't have that property, which is why they are not money.
Bitcoin in particular appears to be intended as something like digital silver: a commodity with intrinsic value, that can represent money, but is not actually money as such. There is a difference between a silver spoon and a silver dollar. A silver spoon is presumably worth something, but that is only decided in trade. A silver dollar
Re: (Score:2)
True. All those people insistent on gold or silver standard should remember that coins stamped in gold or silver had a different value than the equivalent amount of the raw metal had. Or at least not since the medieval times. If the value of the metal went up, it did not mean that the one dollar coin was now worth more. The same applied to silver certificates and the like; they were denominated in "one dollar's worth in silver" and not "0.05 oz of silver's worth in dollars".
Re: (Score:2)
Re: (Score:2)
There's an interesting book that covers a lot of that (and some more even archaic styles of economies) called "Sacred Economics". Worth a read, but gets repetitive about half way through.
Re:The Wörgl Miracle requires 10% monthly tax (Score:2)
ITYM "Wörgl"...
All crypto currencies are scams (Score:2, Insightful)
Re: All crypto currencies are scams (Score:4, Insightful)
I don't think libertarians are on board with a currency issued by the municipal government. That has all the problems of the USD and none of the benefits.
Re: All crypto currencies are scams (Score:5, Insightful)
So far, it appears that the USD is working much better than any cryptocurrency. Even with current inflation, cryptocurrencies are tremendously more volatile than USD, and many of them can't scale up to the necessary transaction volume to be practical anyway. On top of that, exchanges keep getting robbed, we had that recent announcement about how your cryptocurrencies become shareholder property if the exchange (coinbase, I think it was) goes belly-up, and the deregulated nature means you have less protection from crime.
We keep being told that crypto currencies are inflation-immune since there is a finite supply, but there is NOT a finite supply: anyone and his brother can spin up a new cryptocurrency every other day! And anyway the "finite supply of currency" experiment was tried long ago and it led the world to the brink of economic collapse, which is why we switched over to fiat currency in the first place.
Cryptocurrencies will not actually function as a normal currency until they have all the features of a normal currency, at which point the primary attractors will no longer exist. This entire escapade is an enormous farce.
Re: All crypto currencies are scams (Score:5, Interesting)
but there is NOT a finite supply: anyone and his brother can spin up a new cryptocurrency every other day!
I make this point often - there are more cryptocurrencies than there are countries in the world, but none of the crypt-hos here have yet to come up with a counterargument.
How can keep they going on about governments printing money, when people can literally print a whole national government's worth of money by creating yet another cryptocurrency?
Re: All crypto currencies are scams (Score:2)
The counter argument is so obvious, no one probably bothered to explain it to you:
There's also an infinite supply of cash because any nation can print as much as they want. Your argument against cryptocurrency is silly.
Re: (Score:2)
You idiots are promoting cryptocurrency as BETTER.
You can't be better if you aren't better by definition. You just admitted it's not better.
And no, there isn't an infinite supply of cash, and nations can't print as much as they want, because there are regulations and financial controls. Fiat money is a well studied phenomenon, with plenty of people working to keep it stable, because no one wants to print as much money as possible because people UNDERSTAND THE RISKS.
Y
Re: All crypto currencies are scams (Score:2)
You can't send cash over the Internet. That feature makes cryptocurrency objectively better. So, it's up to you to demonstrate it's worse. And you didn't even come close.
Re: (Score:2)
The inflation immune idea is a slogan by goldbuggers who understand neither gold nor money nor economics nor cryptocurrencies. They want it to be true, so they ignore the ever mounting evidence that they are wrong.
My argument against cryptocurrencies is that while they do provide objective measurable value by the ecosystem of transactions provided on a daily basis, this foundation of value is unstable because (1) an individual crypto is easily devalued by the printing of more cryptocurrency, (2) these curr
Re: (Score:2)
A finite limited currency really only works if you have a finite limited population, or a finite limited GDP, or some way of halting the economic growth. If the economy grows but the money supply is stagnant, then the motivation of the money holders will be to hide it in their mattress instead of spending it. Because the longer you hold it the more valuable it becomes, and if you spend it you are losing potential value.
Re: All crypto currencies are scams (Score:2)
By that argument, there's also an infinite supply of cash because any nation can print as much money as they want.
Deflationary by design == defective by design (Score:4, Insightful)
Regardless if the libertarian nutjob in case is the "guns and beans and water filters" kind or of the "vote for me so no one can take away your guns and beans and water filters" flavor.
In both cases, political and monetary, the set of ideas all of it is based on is simply "fuck you, got mine".
Which is retarded for a species that is neither immortal nor capable of procreation through mitosis and filial cannibalism.
The only reason inherent stupidity of the ideology is more apparent with crypto currencies is that, by its nature, ideas it is based on have to be hard coded into the system - which then runs on those rules, faster than a human would, following those same rules.
I.e. You can't lie and propagate the ideas of libertarianism, and then turn around and ask protection from the state - be it Ayn Rand signing up for Social Security and Medicare OR a simple thing as leaving inheritance to your children after you're gunned down while protecting your cans of beans.
You want YOUR, personal, non-government, money, without inflation and the state? Fine. There you go.
It's worthless, cumbersome to use AND should it, for a time, be attached to some speculative value - your children and grandchildren would be condemned to eternal poverty.
No one is making it that way but the ideas inherent AND ENCODED in the system itself. YOUR OWN IDEAS! [youtube.com]
Because deflationary by design means that no matter how fast one runs and how hard one works - they can never catch up to those who've simply started earlier, investing more cause they already had more.
It's not even "rich grow richer while poor go poorer".
It's "rich go super-rich so fast that poor can't even take part in the economic system, so the super-rich have to invent fake shit like NFTs for the poor to gamble on, just to pretend that the whole thing makes sense - long enough to scam the poor and gullible of what little they have left".
And what do you know... the pool of poor and gullible with money to scam out of has ran out.
Re: (Score:2)
That's an extremist libertarian view. A proper member of the Libertarian Party (which I am not) is essentially a cross between a classic Republican who wants more economic freedoms, and a classic Democrat who wants more social freedoms. Ie, a Republican who's fine with drugs and gay marriage. Economically, a Libertarian is really no different than your standard moderate Republican. Lower taxes, free markets, minimum regulation (but not zero), etc. Boring stuff. A Libertarian isn't anti-government, they
Re: (Score:2)
I.e. You can't lie and propagate the ideas of libertarianism, and then turn around and ask protection from the state
not so fast there... Vitalik Buterin is trying to popularize the idea of bailing out Luna's investors, citing the FDIC's protection of bank accounts as a precedent. of course, FDIC is insurance. Banks in the US must pay into the DIF and follow certain regulations. And the FDIC covers deposits when a bank goes insolvent, not investments that become worthless.
but talk like that kind of tips his hand that any talk the crypto industry has about welcoming regulation is just them trying to weasel their way int
Re: Deflationary by design == defective by design (Score:2)
Ethereum already forked once to reverse fraudulent transactions. They can fork again if they want.
This type of thing doesn't happen with Bitcoin by the way. The Bitcoin community will not accept these clawback forks.
Re: (Score:2)
Then call them "cleptocurrencies"
Re: (Score:3)
All crypto currencies are scams? Then call them "cleptocurrencies"
Save the bother and just call them scams.
Re: (Score:2)
Re: (Score:2)
There's a already a perfectly good name for crypto; it's called "Ponzi scheme"
Re: (Score:2)
I've started up a PonziCoin with a hyper optimized block-chain. Can I interest you in becoming an early investor?
Re: (Score:2)
There's a already a perfectly good name for crypto; it's called "Ponzi scheme"
A tender trap, you say?
Well, I'll venture up Mt. Gox, and think about it.
Re: (Score:1)
Deregulation once taxes and laws interfere with the bottom line. Then we are all stupid for voting and shit.
Pay bills with pine cones, we produce plenty and they are unregulated.
Re: (Score:2)
Nah, choose something that has some good side effects. You don't really want people picking up all the pine cones.
Lawn clippings maybe. Or litter. No, cigarette butts!
Ha ha! (Score:5, Funny)
Re: (Score:2)
Illusions of wealth (Score:2)
You can't just magic lots of money out of thin air.
As soon as enough people want to spend it instead of hoarding it like Scrooge McDuck then it will crash and burn. It's basic math.
Re: Illusions of wealth (Score:2)
Basic math says the exact same thing about USD.
More complicated math includes the fact that if your market is growing, it takes care of this problem.
Re: Illusions of wealth (Score:5, Insightful)
Basic math says the exact same thing about USD.
Sure, but USD has centuries of being worth something.
Cryptocoins pushers are trying to print your own money at home then trying to convince the dollar owners to swap some. There'll be a few gullibles but it's not a winning strategy in the long term.
Re: Illusions of wealth (Score:2)
Re: Illusions of wealth (Score:5, Insightful)
No. Not the same at all. The USD is backed by all of the people of the USA who work there and pay their taxes. The economic activity in the US dollar area gives the currency its value. US dollars are issued in response to economic activity rather than because a computer did a calculation that is somewhat hard.
There is $21trillion worth of economic activity that you can access just by having US dollars, and the government is also not generally in the business of debasing the currency and therefore its value holds.
Re: (Score:2)
So not Bezos, then.
Re: (Score:2)
It's a stupid argument based on terrible philosophy. According to these wackos, a religious commune with a well armed militia can issue currency that has "inherent value", because of the tired trope
Re: Illusions of wealth (Score:2)
Well, if the religious commune produces useful goods and services of value and they demand to be paid in a currency of their own creation, then that currency will have value precisely because they stress producing value.
On the other hand, cryptocurrencies have âoevalueâ because people (mostly early adopters) say they have.
Re: Illusions of wealth (Score:4, Insightful)
More complicated math includes the fact that if your market is growing, it takes care of this problem.
No. The growing market isn't what takes care of it. The fact that money is circulating in its original form at high trading volumes takes care of the problem.
The OP used the word "spend" incorrectly. If someone spends cryptocurrency directly it improves it's resilience by at the time pegging its value to something physical. The issue that the OP was describing is not "spending" but rather "cashing out" or trading into another form of currency. When two liquid fiat items are traded against each other at a large volume with finite supply they change in value. The same doesn't happen when for example 100 million people trade a USD for a loaf of bread.
Re:Illusions of wealth (Score:5, Funny)
You can't just magic lots of money out of thin air.
But what if you use blockchain, with AI? It's got what plants crave.
Re: (Score:2)
You can, but eventually you'll run out of people.
(which is what just happened here)
Re: (Score:2)
You can't just magic lots of money out of thin air.
Yes you can. That is exactly what banks do when they lend money. The bank simply writes some accounts stuff to give $50 to Joe Bloggs, while balancing that with an accounting entry that says Joe Bloggs owes the bank $50. The accounts entries balance, which might make one think that no money has been created. In practice, Joe Bloggs has $50 to spend, that he did not have before, so $50 has been created. Of course, the bank won't give $50 to anybody who asks for it. You have to meet certain risk criteria. The
Re: (Score:2)
You can't just magic lots of money out of thin air.
Yes you can. That is exactly what banks do when they lend money.
Banks are highly regulated, they have limits on how much they can magic and they usually require some sort of collateral or guarantor in return for the magic money.
Re: (Score:2)
There are indeed rules about how much banks can lend. That does not seem to have halted the expansion of consumer debt. House price inflation has outstripped average wage rises for many years, resulting in increased mortgage debt. This is all very well if you consider the property to be worth at least the value of the loan. If the price turns out to be unrealistically high, then there is trouble. Credit cards are a relatively new way to lend money, usually at very high interest. Presumably, this is consider
More crypto news? (Score:3)
We just had 6 crypto stories in the last 24 hours. Can we discuss something else maybe?
Re:More crypto news? (Score:5, Insightful)
Re: (Score:1)
plus the energy requirements are like lighting all the coal mines in a mid sized country on fire.
re: commodity backing? (Score:3)
I'm no economics major, so forgive me if I'm way off base.
But, it seems to me that the biggest impediment to making crypto work as a successful decentralized currency was the "bridge" created between it and centralized currencies (via "crypto exchanges" and such).
As soon as you connect them in that manner, all of the regulations that apply to centralized currencies start affecting it too. (You can't even create a user account on a site like Coinbase without submitting your photo ID and other info!)
And then,
Re: (Score:2)
MOD PARENT OFFTOPIC
Just because it would be funny.
Re: (Score:1)
We just had 6 crypto stories in the last 24 hours. Can we discuss something else maybe?
As the value drops, each story counts less in proportion.
This is negligent management (Score:2)
And he should be charged with it.
I invite everyone to start mining my new coin... (Score:4, Funny)
WhatTheFuckIsWrongWithYouCoin
Re: (Score:2)
But can it do NFTs?
CityCoins: griftfest (Score:2, Funny)
The Clear Problem (Score:2)
Bankrupt organizations, districts, governments fleeing to crypto as a last bastion of solvency should not be considered in the "pro" side of the pro/con board. It should be absolutely viewed as a huge warning sign for the financial vehicle in question. When Venezuela steered in that direction, the crypto community should collectively have said, "Wait... something's wrong. Are our premises sound?"
Waste of power (Score:5, Informative)
Forth Worth, Texas, for example, will soon be running bitcoin mining rigs in city hall.
The same Texas that can't keep the power on when it gets too cold or too hot?
Hmmm.... (Score:2)
A monorail, you say?
$5.25 Million (Score:3)
So... 52 people's low-to-medium salaries for a year, after benefits and operational costs... That'll solve everything.
Wait. Miami's 2021-2022 budget was over $9 Billion? So, 0.57%?
Might not be the bastion they hoped for.
Re: (Score:2)
Don't the creation and the sale happen in different fiscal periods? Seems to me they can claim the creation in year 1 as a resounding success, and the sale in year 2 as complete profit.
Everybody wins.
like magic it's gone! Now the magic city needs tax (Score:2)
like magic it's gone! Now the magic city needs more tax to make up for the loss.
Pretty good idea actually (Score:2)
That's not a bad idea. Everybody gives you their money, then you decide how much to give back, with the difference going to fund municipal operations. Then you can eliminate all taxes, because people hate taxes.
I bet they would have gotten away with it too, if not for those meddling kids!
CityCoin (Score:3)
That actually could work... Randy sells the pot farm, YOLOs into CityCoin, makes millions, goes on a bender in a lambo, passes out, wakes up with Elon Musk, and they try to get home. Meanwhile, Cartman is manipulating the price so it crashes after he makes his money, buys a KFC, eats the inventory, and loses the restaurant because of it.
Re: (Score:2)
You got to put memberberries somewhere in there.
"Remember when money was something you put in your wallet" "Oh yeah, I 'member!"
Zero Calorie Magic Beans (Score:2)
Company scrip is worthless? Who knew? (Score:2)
Hillarious (Score:1)
...predicted the cryptocurrency could one day even replace municipal taxes as the government's primary source of funding.
WOW! Just wow!
I am truly speechless.
Can I get my chicks for free along with all this money for nothing?