Will Miami’s bitcoin push pay off for residents?

Miami’s Mayor Francis Suarez has pledged to turn Miami into a hub for crypto-innovation and tech companies.

From viral tweets and freeway billboards to entice technology businesses from cities such as San Francisco, to his YouTube Cafecito talks with influencers and celebrities, the mayor’s tactics are garnering attention but some question whether the hype will ultimately deliver benefits to Miami’s 470,000 residents as they look to recover from the pandemic.

Suarez told Cities Today: “There is a single, defining reason behind my push to attract tech to Miami: my residents.”

The mayor believes that in a rapidly evolving modern economy, cities need to be prepared for potential shocks and attracting high-paying, high-quality jobs is the best way to diversify and make the city more resilient.

“This Miami Movement isn’t about bringing in the very rich,” he added. “It’s about bringing in the innovative and productive classes from all around the country and the world, where people have been taken for granted by their local governments.”

Cryptic currency

Suarez cited companies such as Spotify, Goldman Sachs, Blackstone and Boston Private that have already decided to call Miami home. Several entrepreneurs and investors have also relocated and SoftBank recently announced plans to invest US$100 million into start-ups in the city.

The mayor even exchanged tweets with Elon Musk and met with Boring Company executives regarding the possibility of a tunnel in Miami.

And as well as seeking to draw bitcoin companies to the city, Suarez has floated the idea of paying city employees and investing city treasury in the cryptocurrency. City commissioners cautiously voted to study the proposals.

One challenge for the mayor will be to ensure residents and existing businesses don’t feel alienated or pushed out by a big tech influx. Cities such as San Francisco and Seattle  have experienced this at first hand so going big on bitcoin doesn’t necessarily seem like the most user-friendly place to start.

According to a recent survey by The Harris Poll, more than one in ten US adults have never heard of cryptocurrencies such as Bitcoin, Ethereum and Dogecoin. Six in ten people who had heard of them said they had little or no understanding of how they work, and 43 percent expressed doubts about their legitimacy as a form of payment.

Mayor Suarez said: “The easiest, cheapest way to teach people about bitcoin — or anything for that matter — is by making it more culturally pervasive, and that starts with accessibility. By making bitcoin an option for paying bills or even compensation, we spur the conversation and people will have a natural inclination to learn what it is.”

He added: “The push to attract technology to the City of Miami has nothing to do with imposing novelties on anybody but everything to do with expanding my residents’ options for financial freedom — if people want to adopt bitcoin or not, it should be entirely up to them.”

Power play

Beyond connecting with residents, there are also concerns about the amount of energy bitcoin mining consumes and the environmental implications.

In January 2020, Miami joined the C40 Cities climate action network and announced a goal of reaching net zero city-wide greenhouse gas emissions by 2050. On how a bitcoin boom could square with Miami’s environmental goals, Suarez said: “Bitcoin’s energy consumption is only as dirty as the origin of that energy.

“If you use coal-derived energy to power your city, then how could you expect mining bitcoin to be done cleanly and ethically? Miami presents the unique opportunity to not only pull some of the market share of mining back to the US, but also to do so in a place where much of its power is derived from a nuclear power plant.”

While nuclear power doesn’t release direct emissions, some don’t class it as ‘clean’ energy due to the waste challenge alongside concerns about safety and cost. Miami is also working to expand other renewables such as solar.

Skills

As cities become tech hubs, skills can also be an obstacle, with a growing need for talent in data, software engineering and analytics.

“Something that has become evident from the massive influx of tech companies coming to Miami is the fact that we do have the necessary infrastructure and talent pool to support the growing Miami ecosystem,” said Suarez. “I’ve heard it directly from the CEOs themselves, they simply wouldn’t have been able to shift their entire companies here without the existence of that infrastructure.”

However, he added that building on this is a priority.

“As Miami continues to grow and as our businesses continue to grow so too does our tech infrastructure and we need to take a multifaceted approach to this conversation,” he said. “We need to invest in and bolster our educational institutions — and not just our universities.” This also includes job-training programmes and upskilling schemes.

Working to attract major investment firms will also be a focus to spur start-up creation and business development.

“And this is arguably where we as a government will play a larger role,” he said, adding that he is asking businesses up front what they need to make Miami attractive to them and the city is exploring incentive programmes.

How can I help? https://t.co/hIC1k8ka1i

— Mayor Francis Suarez (@FrancisSuarez) December 5, 2020

Suarez has also appointed an innovation advisor to act as a “concierge” for high tech companies setting up in Miami as well as a venture capitalist in residence.

“This has to become the status quo, not a one-off attempt,” Suarez commented.

Not your traditional government

George Burciaga, Managing Partner at consultancy company Ignite Cities, which works with Miami, said while Suarez’s approach may seem non-traditional for government, it is part of a “well thought-out, strategic plan to improve and grow the city”.

He added: “If you do nothing, you only talk about what it could be. If you make the move, then you are in a position to start creating the change, culturally, from a technical perspective, and in the training that’s involved – the environment starts to shift.”

Ignite supported Miami on an initiative to provide assistance to in-need residents via prepaid cards, and is also working with the city on developing public-private partnerships and exploring ways to deliver municipal broadband to close the digital divide.

Whether Mayor Suarez’s high-octane approach amounts to more than headlines remains to be seen but other mayors are watching closely.

In June Suarez was elected as Second Vice President of the US Conference of Mayors. After the completion of his term, he will serve as First Vice President and then subsequently as the President.

He said: “The US Conference of Mayors provides me with the opportunity to take the work that my team and I have done in the City of Miami to the national level.”