Money for nothing: Cities’ crypto push attracts supporters and detractors

<p>A small group of cryptocurrency enthusiasts has made an offer that they hope cities in the United States will be unable to refuse.</p> <p>The organisation City Coins is requesting that Miami and New York accept the equivalent of millions of dollars in a new cryptocurrency, and at least some of the money is real: Miami Mayor Francis Suarez announced last week that the city had received $5.25 million from City Coins.</p> <p>The dizzying proposal has leaders in other cities, such as Philadelphia and Dearborn, Michigan, clamouring to get in on a deal they hope will patch budgets, similar to how some cities and states hoped lotteries or legalised gambling would solve financial problems.</p> <p>That hype also benefits those who invest early in new currencies, which contributes to claims that cryptocurrency startups are too similar to pyramid schemes.</p> <p>When Suarez announced his city's partnership with the group in November, one of its leaders, Patrick Stanley, told news outlet and cryptocurrency price index company CoinDesk TV that Suarez "just turned his city into an oil producing country that gives Bitcoin yield to its citizens, which is incredible."</p> <p>That hasn't happened, and there are many legal and technological hurdles to overcome before it can.</p> <p>To begin with, the value of cryptocurrencies can fluctuate greatly. Between November and the end of January, the popular cryptocurrency Bitcoin lost nearly half its value, falling from a peak of $67,500 to just above $35,000; it has since recovered slightly to around $43,000. Cryptocurrencies are also popular among criminals due to their anonymity. Scams abound in the world of cryptocurrency trading.</p> <p>The proposal by the group builds on the blockchain technology that underpins Bitcoin and other cryptocurrencies. People who want to support the city of Miami can invest in Miami Coin (as can anyone else), with a portion of their money going to the city. The remainder is divided among Miami Coin's other investors. The system is set up in such