Recently, Vitalik Buterin published an article titled "Crypto City", in which he stated that the use of blockchain technology can change cities. The author of Interstellar Vision will translate the full text, and the following content is for reference only:

Special thanks to Silly and Tinazhen for their early feedback on this post, and to the many others who contributed to discussing ideas.

In the last year, there's been an interesting trend of increased interest in local governments and local governments that are more differentiated and experimenting more. Over the past year, Miami Mayor Francis Suarez has adopted a Twitter-like strategy for high-tech start-ups to attract interest in the city from the crypto community, while frequently tweeting Engage with mainstream tech industry and crypto communities. With Wyoming now having a DAO-friendly legal framework and Colorado experimenting with quadratic voting, we’re seeing more and more experiments creating a more crowd-friendly environment for the offline world.

We’re even seeing projects of varying degrees exploring — Cul de sac, Telosa, CityDAO, Nkwashi, Prospera, and more — that are trying to create entire neighborhoods and cities from the ground up.

Another interesting trend in the last year has been the rapid mainstreaming of cryptocurrency ideas such as tokens (Coins), non-fungible tokens (NFTs) and decentralized autonomous organizations (DAOs). So what happens if we combine these two trends? What would it be like to have a city with tokens, NFTs, DAOs, some on-chain records for anti-corruption? It turns out that someone has already tried to do this:

1. CityCoins.co, a project to create tokens to become a local medium of exchange, part of which is issued by the city government. Additionally, MiamiCoin already exists, and San Francisco Coin appears to be coming soon.

2. Other experiments in token issuance (for example, see this project in Seoul)

3. Experiments related to NFT, usually as a way to fund local artists. Busan is hosting a government-backed conference on what they can do with NFTs.

4. Hillary Schieve, the mayor of Reno in the United States, has a broad vision for the city's blockchain, including NFT sales to support local art, RenoDAO that issues RenoCoins to local residents, which can be obtained from government rental properties Revenue, blockchain lottery, blockchain voting, etc.

5. Of course there are other projects exploring digital cities, CityDAO, which describes itself as "building cities on the Ethereum blockchain" - DAO-like governance and more.

But, in their current form, are these projects a good idea? Are there any changes that would make them better ideas?

Why should we care about cities?

Many governments around the world have been ineffective and slow to respond to long-standing problems and rapid changes in people's underlying needs. In short, many national governments are short of live players. To make matters worse, many of the out-of-the-box political ideas that are being considered or implemented in governance today are, frankly, pretty scary. Do you want America to be taken over by a clone of WWII Portuguese dictator Antonio Salazar, or an "American Caesar" to combat the evil scourge of the American left? For every idea that can reasonably be described as free expansion or democracy, there are ten different forms of just centralized control and walls and pervasive surveillance.

Let's talk about local government. As we saw from the example at the beginning of this article, cities and states have real dynamism, at least in theory. There are huge and very real cultural differences between cities, so finding a city where the public is interested in adopting any particular radical idea is easier than convincing an entire country to embrace it. There are very real challenges and opportunities that can be addressed in local public goods, urban planning, transport and many other areas of urban governance. Cities have tightly knit internal economies where things like the widespread adoption of cryptocurrencies can actually happen independently. Furthermore, experiments within cities are less likely to lead to dire outcomes because cities are regulated by a higher level of government and have an easier escape valve: People who are unhappy with what is happening can exit more easily.

So all in all, local level government seems to be a badly undervalued government. Given that criticism of existing smart city initiatives tends to focus primarily on concerns about centralized governance, lack of transparency, and data privacy, blockchain and encryption appear to be promising key elements towards a more open and participatory path forward.

What are the current city token projects?

There are a lot of projects using city tokens, but these experiments are still small-scale and largely trying to find a solution, but they are at least some seeds that can become interesting things. Many of the most advanced city token projects are in the US, but there is interest elsewhere around the world; in South Korea, the Busan government is hosting an NFT conference. Below are some examples.

1) Blockchain experiments in Reno

Hillary Schieve, mayor of Reno, Nevada, USA, is a blockchain fan with a primary focus on the Tezos ecosystem, and she has recently been exploring blockchain-related ideas in her city's governance :

1. Sell NFTs to fund local art, starting with an NFT for the "Space Whale" sculpture in the city center

2. Create a Reno DAO, governed by Reno tokens, which Reno residents are eligible to obtain through airdrops. The Reno DAO could start earning revenue streams; one proposed idea is for cities to rent out properties they own and use the revenue for the DAO

3. Use blockchain to secure various processes: blockchain-based random number generators for casinos, blockchain-based voting, etc.

reno space whale

2）CityCoins.co

CityCoins.co is a project built on Stacks, a type of block run by an unusual "Proof of transfer" (abbreviated to PoX instead of PoT for some reason) block production algorithm chain, the algorithm is built around the Bitcoin blockchain and ecosystem. 70% of the token supply is generated through a continuous sale mechanism: anyone with STX (Stacks native token) can send their STX to the city coin contract to generate city coins; STX revenue is distributed to existing city tokens Token holders, who hold their tokens, give the remaining 30% to the city government.

CityCoins made an interesting decision to try to build an economic model that does not rely on any government support. Local governments do not need to be involved in creating CityCoins.co coins; community groups can issue coins themselves. The FAQ on "What can I do with CityCoins?" provides answers such as "The CityCoins community will create apps that use tokens as rewards" and "Local businesses can stack their CityCoins for those... people offering discounts or benefits” example. In practice, however, the Miami Coin community is not alone in doing this, and the Miami government has actually publicly supported it.

MiamiCoin Hackathon Winner: A website that allows coworking spaces to offer benefits to MiamiCoin holders.

3）CityDAO

CityDAO was the most radical of the experiments: Unlike Miami and Reno, which were existing cities with existing infrastructure in need of an upgrade, people were persuaded that CityDAO was a DAO with legal status under Wyoming DAO law trying to create a A brand new city from scratch.

So far, the project is still in its early stages. The team is currently finalizing their first land purchase in a remote corner of Nevada. The plan is to start with this land, then add other land in the future, build cities, be governed by a DAO, and make heavy use of radical economic ideas like the Harberger tax to allocate land, make collective decisions, and manage resources. Their DAO is one of the few advancements in governance that avoids token voting; instead, governance is a voting scheme based on "citizen" NFTs, and it has been proposed to further limit voting to one person, one vote by using proof-of-humanity verification. idea. NFTs are currently being sold to crowdfund the project; you can buy them on OpenSea.

What do I think cities can do?

Clearly, cities can do a lot in principle. They can add more bike lanes, they can use capnometers and far-ultraviolet lights to reduce COVID transmission more effectively without inconveniencing people, they can even fund life extension research. But my main expertise is blockchain, and this post is about blockchain, so... let's focus on blockchain.

I think it makes sense to have two distinct blockchain ideas:

1. Use blockchain to create more trusted, transparent and verifiable versions of existing processes.

2. Use the blockchain to implement new experimental forms of ownership for land and other scarce assets, as well as new experimental forms of democratic governance.

There is a natural fit between blockchain and these two categories. Anything that happens on the blockchain is easily publicly verifiable, and there are many free tools readily available to help people do this. Any application built on a blockchain can instantly plug into and interact with other applications throughout the global blockchain ecosystem. Blockchain-based systems are efficient in a way that paper is not, and are publicly verifiable in a way that centralized computing systems are not—a necessary combination, for example, if you want to make a new A polling format that enables citizens to provide real-time feedback on hundreds of different issues for a large number of votes.

What existing processes can blockchain make more trustworthy and transparent?

A simple idea that has been brought to me many times by many people, including government officials around the world, is for the government to create a whitelisted internal-only stablecoin that tracks payments within the government. Every tax payment from an individual or organization can be tied to a publicly visible on-chain record minting that amount of tokens (if we want the individual tax amount to be private, there is a zero-knowledge way to just expose all number, but still convince everyone that the number was calculated correctly). Token transfers between departments can be done “explicitly” and these tokens can only be redeemed by individual contractors or employees claiming their payments and wages.

This system can be easily expanded. For example, the procurement process of selecting which bidder wins a government contract can largely be done on-chain. More processes can be made more trustworthy using blockchain:

1. Fair random number generators (e.g. for lotteries) - VDFs such as Ethereum are expected to contain fair random number generators that can be used to make government-run lotteries more trustworthy. Fair randomness can also be used in many other use cases, such as lotteries as a form of government.

2. Certificates, such as encrypted proofs that certain individuals are residents of the city, can be done on-chain to increase verifiability and security (for example, if such certificates are issued on-chain, in case of false certificates, can be revealed immediately). This can be used for various local government issued certificates.

3. Asset registration, for land and other assets, and for more complex forms of property ownership, such as development rights. Since courts need to be able to assign in special cases, these registries may never become fully decentralized bearer tools like cryptocurrencies, but having the records on-chain can still make it easier to see in a dispute what happened.

4. Even voting can be done on-chain. Here, a lot of complexity looms and it is important to be cautious; a sophisticated solution combining blockchain, zero-knowledge proofs, and other cryptography is required to achieve all the desired privacy and security properties. However, if humanity is really going to move to electronic voting, local government seems like the perfect entry point.

What are some interesting radical economic and governance experiments?

But beyond these overlays of what governments are already doing, we can also see blockchain as an opportunity for governments to do new and radical experiments in economics and governance. These are not necessarily my final thoughts on what I think should be done; they are more of an initial exploration and suggestion of potential directions. Once an experiment begins, real-world feedback is often the most useful variable in determining how to adjust the experiment in the future.

Experiment #1: A More Comprehensive City Token Vision

CityCoins.co is one of the visions of how city tokens work. But this is far from the only vision. In fact, an approach like CityCoins has significant risks, especially in terms of how the economic model is heavily skewed toward early adopters. 70% of the STX revenue from minting new tokens is distributed to existing stakers of City Tokens. More tokens will be issued in the next five years than in the next fifty, and 2021 is a good deal for the government, but what about 2051? Once the government endorses a specific city token, it will be difficult for it to change direction in the future. Therefore, city governments must carefully consider these issues and choose a path that makes sense in the long run.

This is a sketch of different possibilities for the narrative of how city tokens work. This is far from the only possible alternative to CityCoins.co's vision; in any case, city tokens are a vast design space and there are many different options to consider.

The concept of homeownership in its current form is a notable double-edged sword, and many argue that the specific way homeownership is actively encouraged and legally structured is one of the biggest economic policy mistakes we make today. There is inevitably political tension between a home as a place to live and a home as an investment asset, and the pressure to satisfy communities concerned with the latter often ends up severely compromising the affordability of the former. Residents of a city either own their homes, exposing them to massive overexposure to land prices and introducing perverse incentives to discourage the construction of new homes, or they rent, exposing them to a negative impact on the real estate market, trapping them economically and making the city a The goal of livability is inconsistent.

But even with all these problems, many people still find that owning a home is not only a good personal choice, but also worthy of active subsidies or social encouragement. A big reason is that it motivates people to save money and build their net worth. Another important reason is that, despite its flaws, this creates an economic alliance between residents and the communities in which they live. But what if we could provide a way for people to save and create economic unions without the drawbacks? What if we could create a divisible and fungible city token where residents could own as many units as they could afford or feel comfortable with, and as the city prospered, its value would rise?

First, let's start with some possible goals. Of course not all goals are required to be achieved; a token that accomplishes three of the following five is a big step forward, but we will achieve as many of them as possible:

1. Provide a sustainable source of income for the government. The urban token economy model should avoid redirecting existing taxes; instead, it should look for new revenue streams.

2. Create economic alliances between residents and cities. This first means that as cities become more attractive, the tokens themselves should obviously become more valuable. But it also means that economics should actively encourage residents to hold more tokens than hedge funds.

3. Promote savings and wealth accumulation. Home ownership does just that: When homeowners pay their mortgage, they build their equity by default. City tokens can do the same, making it attractive to accumulate tokens over time, and even gamify the experience.

4. Encourage more pro-social activities, such as positive actions that contribute to cities and more sustainable use of resources.

5. Be equal. Don't overly favor the rich over the poor (as poorly designed economic mechanisms often do). The divisibility of tokens, avoiding the apparent binary divide between rich and poor, does a lot in this regard, but we can go further, such as distributing most of the new issuance as UBI to residents.

One model that seems to easily satisfy the first three goals is to provide a benefit to holders: if you hold at least X tokens (where X can increase over time), you get some services for free. MiamiCoin is trying to encourage businesses to do this, but we can go a step further and have government services operate this way as well. A simple example would be to make existing public parking spaces free only for those who hold at least a certain amount of tokens. This will achieve several goals simultaneously:

1. Create an incentive to hold tokens and maintain their value.

2. Create incentives specifically for residents to hold tokens, rather than other unaligned distant investors. Furthermore, the utility of the incentive is limited per individual, so it encourages widely distributed holdings.

3. Create economic alliances (cities become more attractive -> more people want to park -> tokens are more valuable). Unlike home ownership, this goes with the entire town, not just a very specific location in town.

4. Encourage the sustainable use of resources: This will reduce the use of parking spaces (of course, if people without tokens really need to park, they can still pay for parking), support many local governments to open up more space on the road to be more pedestrian-friendly wishes. Alternatively, restaurants could be allowed to lock tokens and require a table to park through the same mechanism.

But in order to avoid perverse incentives, it is very important not to be overly dependent on one particular idea, but to have multiple possible sources of income. A great goldmine for giving value to city tokens while experimenting with novel governance ideas is zoning. If you hold at least Y tokens, then you can vote quadratically on what nearby landowners have to pay to bypass zoning restrictions. This hybrid market + direct democracy based approach would be more efficient than the current overly onerous licensing process, and the fees themselves would become another source of government revenue. More generally, any idea can be combined with city tokens to give city token holders more places to use them.

Experiment #2: More Radical and Participatory Forms of Governance

This is where radical market ideas like the Harberger tax, quadratic voting, and quadratic financing come in. I've suggested some of these ideas in the section above, but you don't have to have a dedicated city token to implement them. Some limited government use of quadratic voting and funding has occurred: see the Colorado Democratic Party, and experiments that have not yet received government support, such as Gitcoin's Boulder Downtown Stimulus initiative.

One obvious place where these ideas can have long-term value is in incentivizing developers to improve the aesthetics of the buildings they're building. Harberger taxes and other mechanisms could be used to fundamentally reform zoning rules, and blockchains could be used to manage such mechanisms in a more trustworthy and efficient manner. Another idea, which is more feasible in the short term, is to subsidize local businesses, similar to the downtown stimulus package, but on a larger and longer-lasting scale. Businesses have been generating various positive externalities in local communities that can be more effectively rewarded. Local news could be refunded to revive a long-struggling industry. Pricing for ads can be set based on real-time votes on how much people like each particular ad, encouraging more originality and creativity.

More democratic feedback (maybe even retroactive democratic feedback!) might create better incentives in all of these areas. A 21st-century digital democracy, enabled by real-time online quadratic voting and financing, may do better than a 20th-century democracy, which in practice appears to be marked primarily by strict building codes and roadblocks from planning and permitting hearings. Of course, if you're going to use blockchain to secure your votes, starting with novelty voting seems safer and politically feasible than reinstalling existing voting systems.

in conclusion

in conclusion

Existing cities or new cities can experiment with many ideas worthy of urban experimentation. The advantage of a new city is of course that there are no existing residents with existing expectations of how things should be done; but in modern times, the concept of creating a new city itself is relatively untested. Maybe the pool of billions of dollars in the hands of people and projects keen to try new things will tide us over. But even so, existing cities, which are likely to remain where the majority of people live for the foreseeable future, could use these ideas.

Blockchain is useful in both the more incremental and radical ideas presented in this paper, even with the inherently "trusted" nature of city governments. Running any new or existing mechanism on-chain allows the public to easily verify that everything is following the rules. Public chains are better: The benefit of existing infrastructure for users to independently verify what is happening far outweighs the loss in transaction fees, which are expected to rapidly decrease in Rollup and sharding soon. If strong privacy is required, blockchains can incorporate zero-knowledge cryptography, thereby providing both privacy and security.

Editor: Interstellar Vision IPFSNEWS Sue

——End——

Editor: Interstellar Vision IPFSNEWS Sue