Since their earliest manifestations, cities have been vital to our collective future. Cities are engines of commerce, thought, culture, and innovation. Even during the downturn caused by the COVID-19 pandemic, cities have demonstrated their persistence and pushed humanity forward with critical leadership on the pressing issues facing the world. We need cities more than ever, to solve the challenges of climate change, globalized trade, and political stagnation. The best way to ensure that cities are up to the task is to bolster self-governance efforts. Blockchain technology is an ideal and underutilized tool to accomplish this task.
The founder of Ethereum, Vitalik Buterin, published a stimulating thought piece this month outlining how he believes blockchain technology and cryptocurrency can aid the development of cities and encourage better self-government. Blockchains enable innovative governance, Buterin argues, by securing information. This isn’t limited to the straightforward storing of residents’ data but can aid in more efficient tax collection, allocation of resources, and crisis management. Using the example of Harberger taxes and other zoning mechanisms, Buterin shows how blockchains can fundamentally transform how cities function. The more efficient and trustworthy a city handles the heavy lifting of capital management, the better its self-governance will become. Better self-governance stimulates economic benefits across society and in the global economy.
Cities are so revolutionary because they generally have nimble legislative environments. The effects are evident in the battle against climate change. Many city governments have been able to push through aggressive legislation than the national government regarding pollution standards because of their nimble legislative structure.
However, this comes at a cost, and cities need ample revenue to continue forward. Buterin sees cryptocurrency as a catalyst to spur revenue. The remarkable rise in the price of cryptocurrency demonstrates the sheer amount of investor appetite for new coins. A cryptocurrency backed by a city could be an attractive and secure investment for the current market appetite. After all, there are popular alt-coins named after internet dog memes that have a market capitalization in the…