With Bitcoin seemingly on the march again, news of yet another smart city planned for construction stirs up the debate; can self-regulating crypto cities become a future reality if cryptocurrencies surpass cash and credit, or must they continue to share the same space.
Autonomous and self-regulating crypto environments aren’t simply a pipedream, if not a reality they are becoming the target of forward-thinking jurisdictions and well documented. So how does a smart city become a “Cryptopia”, and is this possible?
Smart cities are becoming a reality; the latest announcement by the Malaysian government has certainly gained the attention of the crypto press with huge plans for a blockchain city built on over 835 acres off the coast of Malacca in a project backed by the government of China and construction and engineering company China Wuyi.
Urban development in China, at first slipping under the global radar, suddenly exploded into reality, and three decades on becoming an example to the world as just how rapid change can be when it becomes the central guiding focus of a government and its people. Clearly, it wasn’t going to be too long in cryptocurrency’s very short history before China zoomed in on the latest opportunity.
The new Malaccan project is not the only Chinese future crypto city to emerge from drawing board into reality, with a significant partnership created last year between Xiong’an and blockchain development company ConsenSys in order to create President Xi’s own future dream city just 90 minutes from the capital.
One of the aims of such spaces is to make them functional for a range of business enterprises and educational services and in some cases also integrate platforms offering a city cryptocurrency, such as Melaka Straits City’s proposed DMI coin. But are they, or can they even become, autonomous self- dependent crypto environments so early in cryptocurrency’s development, when public trust is such a huge factor? Cities have, and will, continue to launch their own cryptocurrencies, and some may even insist on established currencies such as Bitcoin being used exclusively, although at present such jurisdictions are not proven.
Slovenia, which is in the process of establishing the world’s first crypto-friendly shopping center BTC CITY will contain a collection of shops that accept cryptocurrency. It has even taken the major “wild west” step of asking customers to leave their fiat at the door. The Ljubljana based BTC City, however, is planning to use dozens of digital currencies that already exist, rather than creating new ones from scratch. Still, this is one step further than the South Korean town of Gimpo who although having created its own K Coin, then allow stores to convert the cryptocurrency into fiat.
Liberstad, the anarcho-capitalist utopian project in Norway is a privately-run smart city project by the non-profit Liberstad Drift Organization, that aims to implement the principles of a total free-market economy and lack of government interference with a special focus on abolishing taxation. This seems to be a direction towards a truly autonomous non-cash reliant jurisdiction worthy of a crypto city, or in this case crypto town, tag.
The new city now has a “City Coin” (CITY) as their cryptocurrency. National fiat currencies are entirely prohibited, and the only way to pay within the city is with the CITY token. It operates seamlessly with the blockchain-powered smart city platform. Locals have the opportunity to use CITY “on a private, internal, and voluntary basis,” though it replaced public provisions that would otherwise be offered by the government. The press release said that the blockchain’s reputation for being trustless and decentralized is the “key ingredient for the development and prosperity of sustainable and free city-societies.” The head of Liberstad Drift AS, John Toralf Holmesland, has helped to implement the libertarian ideology and non-aggression principles into the society and writes:
“We want a society where people decide over themselves and can live together without government authorities. We want a society without government coercion, blackmail, surveillance or unnecessary violence.”
There are others who want to go through the entire course, but the proof is in eating, so to speak. 37-year-old Brock Pierce, a one-time child actor and now renegade Bitcoin evangelist, being one of the more publicized, with his attempts to promote “Puertopia” in Puerto Rico – a US overseas territory recently devasted by Hurricane Maria.
Although dozens of American entrepreneurs are flooding to build up the community after carelessly naming it “eternal boy playground” in Latin, and then sensibly changing it to Sol, it remains to be seen if a true crypto-community can become reality. The Puertopians have met local resistance, despite Pierce’s promises of offering compassion, respect, and financial transparency; locals are not all as enamored with the goals of ‘Sol’ as was originally anticipated. This proves that Cryptopias cannot be created unless absolutely everyone is a participant and has a stake.
This may have been American Singer Akon’s objective in creating Akoin and then proposing building a futuristic city around it, based on the idea of Wakanda, the fictional highly technologically advanced African nation featured in the recent Black Panther movie.
Akon says he wants all to have a stake in his new 100% crypto-based city near Dakar, but how it will come to fruition is still anybody’s guess given how scant information is on the concept currently. It is true that Senegal is a country motivated by change with its new USD 700 million airport, but the only town taking shape near the airport-the proposed location for Akon City- currently is a purpose-built town called Diamniado, and the crypto city project remains just an idea.
All these concepts, ranging from the actual to the imagined, will face complexities in making a shift towards cryptocurrency and away from fiat. Security will be key for those cities launching their own cryptocurrencies and blockchains, needing to be foolproof and un-hackable, and citizens’ tokens safe. The volatility associated with cryptocurrencies will need to become a thing of the past before fiat can become irrelevant.
Digital tokens will possibly need to be backed by some other asset, a la stablecoins, an idea promoted by Brock Pierce himself back in 2014 with the launch of realcoin. Myles Snider of Multicoin Capital claims that stablecoins can offer a solution to cryptocurrency volatility, claiming that cryptocurrency’s current instability will prevent progress in terms of digital currency displacing fiat. He comments:
“The decoupling of governments and money could provide an end to hyperinflationary policies, economic controls, and other damaging policies that result from government mismanagement of national economies… and stablecoins can provide the solution”
The move towards crypto cities has clearly begun, albeit at toes-in-the-water velocity, and the Chinese, fervently anti-crypto philosophically, are ironically in the vanguard of this movement, but with blockchain as the motivator rather than any desire to replace the Yuan. Towns like Zug in Switzerland currently bridge the gap, making cryptocurrency useful and functional in the daily lives of their inhabitants.
But a true Cryptopia is yet to be created. Liberstad currently remains the only close model with its idealism of the people “living together without government authorities..without government coercion, blackmail, surveillance or unnecessary violence.”
A global financial revolution with governments recognizing cryptocurrencies’ innovative ideology for a more secure monetary future and governments switching from conventional currency to digital forms of currency, as a result, is distinctly possible. This change seems a long way off, but it is in this environment that crypto cities will begin to emerge. It’s back to public trust in crypto to get this moving.
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