CityCoins are cryptocurrencies that allow people to support their favorite cities and, in turn, earn Bitcoin.
Ideally, they are designed to have value in a specific geographic location, unlike regular coins that have infinite value outside their creation cities.
MiamiCoin is an example of a CityCoin that allows Miami residents to mine it and use it to contribute to the city’s development.
Ideally, Miami and New York would be the first cities to launch CityCoins. Citizens can introduce CityCoins for their preferred cities inside and beyond the United States of America’s borders.
How Do They Work?
How to design a CityCoin
One may think that the project team typically generates and manages CityCoin. However, the whole process lies in the individual user’s hands. The only thing that the project does is provide a platform that supports each CityCoin’s deployment.
So let’s now look at how you can create a CityCoin for your city. The whole process consists of four phases. First, the crypto community must vote on the preferred city for which they want to launch a CityCoin. They can do this by filling out the survey form on the website.
After narrowing it down to a specific city, it is critical that the mayor show support for the initiative and agree to own the city’s wallet.
Anyone can start the new CityCoin deployment by launching a smart contract on the Stacks mainnet. To do this, one needs to:
- Download Stacks Web Wallet.
- Deposit STX tokens to the wallet. The tokens are available on centralized exchanges, for instance, OKEx, KuCoin, and Binance.
- Login to the MineCityCoins website to connect your Stacks wallet. Do this by clicking the corner button on the top right hand.
- You must then submit a registered user document through the user interface. The registered user keeps a record of all your stack addresses.
For the mining process to be activated, however, 20 individuals need to send some STX tokens to the freshly created smart contract. Once the CityCoin contract has been activated, miners have to wait for up to 24 hours so they can be able to mine the freshly created CityCoins.
What are Stacks?
In layman’s terms, CityCoin employs a decentralized protocol powered by smart contracts to provide value to interested parties and their cities.
The goal of Stacks is simply to provide a system that rewards users’ efforts for keeping the system operational and, at the same time, provides funds to develop the selected cities. As discussed earlier, CityCoins employs multiple token systems, unlike other crypto projects. This structure enables it to create unique tokens for every supported city.
It’s worth noting that smart contracts are programmed agreements installed on the blockchain to get rid of counterparty risks. In simple terms, a transaction will only be finalized when the parties involved meet all the conditions outlined in the smart contracts.
How, then, does CityCoin make use of transactions that are smart contracts enabled on a bitcoin-based framework bearing in mind the fact that the Bitcoin network doesn’t support smart contracts? That’s where the Stack technology comes in.
Stacks is a blockchain framework created on top of the Bitcoin network to ensure that smart contracts applications are performed.CityCoins majorly rely on smart contracts technology. They also use Bitcoins’ security fabric which utilizes Stacks blockchain.
The CityCoin ecosystem majorly relies on two key processes. The first process is called Mining, and the other is stacking.
How Does CityCoin Mining work?
Citycoin miners fund STX to the smart contracts aiming for a chance to earn CityCoin tokens. This process is called bidding and is carried out on the Stacks blockchain. A winner is selected when a new block is uncovered. The winner is then rewarded with CityCoins.
The probability of emerging a winner depends on the STX number a miner bids relative to the total deposited amount by fellow competing miners.
It is crucial to remember that once the deposit has happened, you lose access to the STX tokens funded into the protocol’s smart contract. 70% of the tokens are distributed among stackers, and the other 30% are forwarded to a city’s wallet.
In a case scenario whereby no users are available to stack, all the tokens are forwarded to each corresponding city’s wallet.
How Stacking of CityCoins Work
Stacking is much related to Ethereum stacking, which requires users to keep digital coins in the smart contract for a certain period, after which they can earn rewards. The difference is that earnings are generated on another cryptocurrency.
When an investor stakes ether (native Ethereum cryptocurrency), their reward will be more ether. CityCoin holders, on the other hand, stack CityCoin tokens to earn STX, which comes from a portion of the deposited STX tokens as described earlier.
Apart from earning STX tokens, CityCoin stackers can also get bitcoin, providing an extra yield on their invested assets.
What’s a City Wallet
A City wallet is a unique wallet that every city where CityCoin has been launched possesses. The wallet acts as a crypto treasury pot where 30% of the total STX bids are forwarded.
The city mayors can then claim the funds available in their wallet and use them to improve their cities and constituents. They can also decide to stack the tokens generated to earn bitcoin.
Miami and New York cities have already started generating STX in their respective city wallets.
The Future Prospects
If CityCoin achieves global popularity, we will have increased transparency in tackling immediate problems. People will become more concerned about their city leaders and how responsible they can be.
To sum it up, the CityCoin project can be termed as a landmark in the world of the crypto-verse simply because it has elected leaders backing it up and taking account of the same. This creates space for more crypto ventures and growth in the adoption of digital assets.