Miami has voted to research paying its 3,500 staff in Bitcoin, as well as allowing residents to pay for city services and for their property taxes with the cryptocurrency.
The resolution was proposed on Thursday by Mayor Francis Suarez, who has claimed it is among the best ways to market Miami as a tech hub.
Suarez had wanted city commissioners to vote to use Bitcoin without hesitation but after several concerns were raised, they voted by 4-1 to carry out analysis and look into a vendor to process the transactions before any contract would be signed.
If a contract is eventually approved, the city’s thousands of municipal workers would have the option of receiving all or part of their paycheck in Bitcoin.
One city commissioner has already voiced concern, however, and warned he ‘can’t drink the Kool-Aid on this one’.
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Miami Mayor Francis Suarez is leading a push for the city to use Bitcoin for its transactions
Miami is looking into offering the option for its 3,500 employees to receive their paychecks in cryptocurrency Bitcoin. Pictured, the City of Miami Emergency Operations Center
Joe Carollo was the only commissioner to vote against the resolution yet added that he believed the ‘mayor has done a fabulous job with that, and his intentions are coming right from the heart’.
The number of people employed by Miami can vary by season but according to its website, it employs approximately 3,500 employees in a variety of occupations covering more than 500 classifications.
Mayor Suarez heralded the vote as he claimed that it was a step in the right direction for the city.
‘It’s wonderful to be a very “crypto-forward” city in the city of Miami, and I want to thank my commission colleagues for allowing that to happen,’ he said in a video posted to social media.
‘It directs the city manager, after analysis, to be able to procure a vendor to be able to get a percentage of their salaries in Bitcoin, allows our residents to pay for fees in Bitcoin and also would allow the city manager to cooperate with Miami-Dade county to allow for taxes to be paid in Bitcoin.’
‘Also, at the request of the state legislature, the city of Miami supports efforts to make Bitcoin an acceptable currency for us to potentially invest in in the future.’
In the last month alone, Bitcoin fell below $30,000 and climbed over $48,000
City workers (pictured) could choose to receive all or part of their salary in Bitcoin
City Commissioner Joe Carollo voiced concern and said he ‘can’t drink the Kool-Aid on this one’
Miami is set to launch education campaigns in English, Spanish and Creole to provide further information to residents about the cryptocurrency, which has set new record highs in recent months after a rollercoaster ride over the past decade.
Suarez has insisted that he supports Bitcoin even as the volatile cryptocurrency continues to spike and drop and has a history of losing half its value in just a month’s time.
WHAT IS BITCOIN AND HOW DOES IT WORK?
What is Bitcoin?
Bitcoin is a cryptocurrency – an online type of money which is created using computer code.
It was invented in 2009 by someone calling themselves Satoshi Nakamoto – a mysterious computer coder who has never been found or identified themselves.
Bitcoins are created without using middlemen – which means no banks take a fee when they are exchanged.
They are stored in what are called virtual wallets known as blockchains which keep track of your money.
One of the selling points is that it can be used to buy things anonymously.
However, this has left the currency open to criticism and calls for tighter regulation as terrorists and criminals have used to it traffic drugs and guns.
How are they created?
Bitcoin is created through a process known as ‘mining’ which involves computers solving difficult maths problems with a 64-digit solution.
Every time a new maths problem is solved a fresh Bitcoin is produced.
Some people create powerful computers for the sole purpose of creating Bitcoins.
But the number which can be produced are limited – meaning the currency should maintain a certain level of value.
Why are they popular?
Some people value Bitcoin because it is a form of currency which cuts out banking middlemen and the Government – a form of peer to peer currency exchange.
And all transactions are recorded publicly so it is very hard to counterfeit.
Its value surged in 2017 – beating the ‘tulip mania’ of the 17th Century and the dot com boom of the early 2000s to be the biggest bubble in history.
Some shops and restaurants are accepting for purchases, but overall this is a tiny part of the market of the real economy.
It is not clear if any other U.S. cities are looking into using Bitcoin to carry out their financial transactions yet in 2015, New York City Councilman Mark Levine did attempt to introduce it as a form of payment in the Big Apple for fines and fees.
Two U.S. cities – Riviera Beach, Florida; and Florence, Alabama – have previously been forced to pay a ransom in Bitcoin after being hacked.
The price of Bitcoin currently stands at $46,948, having dropped by 2 percent in the last 24 hours.
During that time, it dropped to a low of 46,286 and hit a high of 48,925.
In the past seven days, the value of Bitcoin has risen from below $38,000 and in the last month, it has dropped to $29,000 before climbing to its current record high.
Just one year ago, the price of one Bitcoin was only $10,000 and day-to-day, it can still see a rise and fall of thousands of dollars.
The record high of $48,000 came this week as Bitcoin gained more mainstream support.
On Monday, Tesla said that it had bought $1.5 billion in the cryptocurrency and would soon accept it in payment for its cars.
Bitcoin’s price surged 10 percent immediately after the disclosure and has continued to climb all week.
It came just days after Tesla CEO Elon Musk, who is a well-known supporter of bitcoin, briefly changed the bio of his Twitter account, which has 46 million followers, to say ‘#bitcoin’.
After the Tesla announcement, US bank BNY Mellon on Thursday announced it will manage digital assets for clients.
The same day, Uber also announced it will consider accepting Bitcoin as payment.
Twitter said Wednesday it has thought about whether to hold bitcoin on its balance sheet.
Bitcoin has also drawn support from major financial institutions this year.
The world’s biggest money manager Blackrock recently changed a handful of investment mandates to allow some of its funds to invest in the currency.
Central banks remain skeptical of digital currencies, but analysts say the more real world uses appear for bitcoin, the more attractive it will prove as a long-term store of value.
Much of the first major appeal in Bitcoin lay in the fact that it was different from traditional bank accounts and online wallets and would allow anyone in the world to open a digital bank account and store money.
Since late last year, it has been gaining traction with more mainstream investors who are increasingly convinced that it will be a long-lasting asset, and not a speculative bubble as some analysts and investors fear.
Yet at its worst, its value has dropped up to 19 percent in one day, as it did in January.
More than $200billion was wiped off the value of the global cryptocurrency market with the sudden crash.
The price of Bitcoin currently stands at $46k, having dropped by 2 percent in the last 24 hours
In the past seven days, the value has climbed from under $38,000 to more than $48,000
Strategists at the Bank of America last month warned that the rapidly rising price of bitcoin may be ‘the mother of all bubbles’, comparing it to the tech boom in the late 1990s.
Yet, many experts remain optimistic about the future of the digital currency that was invented in 2009 by an anonymous person or group known by the pseudonym Satoshi Nakamoto.
On January 5 investment bank JP Morgan said that Bitcoin has emerged as a rival to gold and could trade as high as $146,000 if it becomes established as a safe-haven asset.