Jackson City Mayor Scott Conger is hoping to bring Jackson into a new era with his recent push for the adoption of cryptocurrency in the city government.
In a series of public messages over the past few weeks, including announcing the formation of a Block Chain taskforce, a partnership with Black Wall Street and changing his Twitter profile picture to the laser-eyes image common with Bitcoin enthusiasts, Conger called the adoption of Bitcoin as a way to “usher in a new industrial revolution with sustainable economies that will help close the wealth gap.”
The topic of Bitcoin and cryptocurrency, however, is not a particularly digestible one for the average city resident.
“It’ll bring more opportunity,” Conger said. “It’s so refreshing to hear governments discussing different ways to finance things, besides ‘we’re going to raise your property taxes,’ or ‘we’re going to implement this fee.’ If we can find another way to do it, then that’s what we’re going to do.”
The idea Conger is presenting is primarily the possibility of offering cryptocurrency-based payroll conversions for city employees.
“We offer our employees a deferred compensation opportunity for their retirement already,” Conger said. “Why not add more options?”
Simply explained, the idea is to adopt cryptocurrency as an additional, alternative option for city employees and businesses to invest in—especially considering the appreciative growth of Bitcoin value.
“It’s not something that’s going to be required,” he said. “It’s an alternative. Think of it like you’re investing in the stock market. What do you want to do? You’re want to diversify your investments. And this is just another way to diversify the portfolio of how we generate revenue—potentially throughout the city.”
Bitcoin-based employee options have not yet been adopted in any local government in the U.S. In fact, very few are even considering it besides Conger and Miami Mayor Francis Suarez, with whom Conger has “opened up a conversation with.”
“It’s a big city, makes sense,” Conger said of Miami. “They have a better path of least resistance than Jackson does. But as I started easing more (into the topic of cryptocurrency) and getting more educated on it, I thought ‘why not? Why not Jackson? Why can’t we do something that can off-set the current economic system that we have?’”
On top of adding options for city employees and businesses, Conger is looking into the possibility of “Bitcoin mining.” Although the term brings to mind pitchforks and gold sieves, the process simply involves high-powered computers solving complicated mathematical problems. When these computers solve the equations, a new Bitcoin is created.
“Mining is a relatively low investment—a few thousand dollar investment—but the potential return on the asset appreciation is huge,” Conger said. “I think we get into a mindset of ‘if we need more revenue, how do we create more revenue?’ Well, the obvious answer is to go increase property taxes, or enact a fee. But if we can mine, we can get a huge return from a very low investment, put it on our balance sheet and it can appreciate four-fold within the next year.
“Why not do that? Why not—instead of putting the burden on taxpayers—do something else? There’s roads that need to be paved, deferred maintenance that needs to be done. Why would we go back to the taxpayers when we can find an alternative way to do that?”
A catch to the Bitcoin model is that there are only a finite number of Bitcoins—21 million, to be exact.
“There will only ever be 21 million bitcoins mined,” said Conger. “And every four years, the number of bitcoins mined gets reduced in half. So you’re seeing it become a higher-demand commodity. It’s only going to appreciate in its value.”
Most of the cost to begin mining will lie in computers and energy costs.
“If we get to a point where we’re able to mine, and we’re spending a few thousand dollars to get the equipment and a couple hundred dollars a month for the energy costs, but we’re mining a coin that’s worth a million dollars—and (perhaps) we’re mining five of those a year—then we opened up a whole new opportunity for Jackson,” Conger said.
Mining, and therefore creating, bitcoins also adds to the security of the cryptocurrency network. By solving the computational mathematical problems, Bitcoin miners must verify its transaction information.
Much like how physical transactions with traditional currency are verified through receipts, Bitcoin miners verify purchases by clumping transactions together in what is known as “blocks,” and adding them to a public record called a “blockchain.”
Users akin to moderators then maintain records of those blocks, so they can be used to verify purchases in the future and compare them for potential fraud.
Basically, Bitcoin mining creates higher value for all bitcoin by lowering the quantity available worldwide, while adding to the miner’s own wallet. While doing that, it also helps create more records, which ensure the security of all existing bitcoin.
“Right now, we’re having the conversation of ‘do we pave this street, or do we buy a fire truck? Do we buy a police car, or do we fix this HVAC unit?’ Whereas in 10 to 15 years (if we adopt cryptocurrency) whoever’s here in city government won’t have to have this conversation. They’ll say ‘let’s do this and this,’ because they’ll have the ability to do so. And then we haven’t placed the burden back on taxpayers. We’ll have found an alternative way to fund these things.”
Getting to such a point will take a lot of work, however. Conger admits that the main roadblock is education on the topic.
“I’m only a few months into the rabbit hole,” he said, pointing to a stack of books stacked on his desk. “And the noise of it—there’s so much economic noise about it.
“How do we communicate to people who have no clue what it is, and who don’t see it as an appreciating asset? They think it’s a fad. They don’t believe cryptocurrency is an alternative. They get caught up in the noise of the short-term volatility. I think that’s a big hurdle for some people.”
Conger believes that it’s simply a matter of changing perspective.
“It’s scary,” he said. “With anything new, there’s always hurdles with education. You know, anything different than what we’re used to is scary. That’s just the reality of it. But understanding that the opportunity far outweighs any cost you put into it…If you step back and look at the whole picture, it’s much more exciting and much more opportunistic than anything we’ve ever seen.”
Looking forward, Conger is working to gather a taskforce to being discussing the actual implementation of this idea.
“(We) need to get the taskforce together, talk about the real-world opportunities, costs and what the barriers are to do that,” he said. “Then we need to call the comptroller’s office to see ‘can we even do this in the state of Tennessee?’ We don’t know. So if we can’t, we need to see what we need to do to make it an option in the future.
“So that’s the process of where we are. The question is just ‘how do we make Jackson better?’ And how do we attract those 21st century industries—those tech companies—and utilize that amazing infrastructure that we already have to attract them here. I think it’s part of a mindset change of looking day-to-day, to looking years in advance. We need to look at how we’re going to make Jackson better, not just today, but how we’re planning for the future.”
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