Introducing Crypto Cities
What's this all about?
Let’s Start with Cities
I love cities. I believe Ed Glaeser when he says “cities are humankind’s greatest invention.”1 And I think they can be better. Designed better. Governed better.
This is not a shocking revelation that cities can be better. Everything can improve, and many professionals and academics are already working on it. The improvement of cities is a major part of the curriculum and ethos behind multiple fields like urban planning, urban design, architecture, landscape architecture, and urban studies. But we need more research and thought on how cities are run and governed. There’s some happening already,2 but more is needed; especially now that there are new digital tools that make it possible to completely rethink how city government functions.
Cryptocurrency’s underlying technology, the blockchain, is truly transformative. Like in the same way the internet was transformative. That’s a big claim, I know, but there are enough very smart and wealthy people3 saying this that I’ve started to pay attention. If we apply blockchain along with crypto, Web3, and other digital technologies to our cities and government processes, we can have more trustworthy, more efficient, more participatory forms of government. And better places to live.
City Government and the Internet Transformation
There used to be a time where all government records were only on paper, and stored in big file cabinets. If you needed to look something up, like a deed to your property (a document that says you own a certain piece of land), you would have to go in person to a government office and look in actual file cabinets with real pieces of paper. Either that, or call the government office, and ask them to find it and then send it to you via fax or snail mail. Then, computing and the internet came along and slowly, governments adapted… slowly being the operative word.4
Now, in cities like Washington, DC, you can search for a deed on the internet and pull up a PDF on your screen. You can even see the the history of deeds at each property over time. For official real estate transactions (like buying and selling a home), you’ll still need a physical paper copy to include in your closing documents, but the ability to find the data you need in the internet era is vastly better than before. Other internet-era improvements include the ability to have residents fill out forms online (and automate next steps based on their input), and the ability to create databases with information from residents, properties, or permit and aid applications that can help governments better target outreach or provision of new services.
These are just a few small examples, but hopefully it illustrates the kind of efficiencies that are now a part of government operations thanks to the internet. Crypto has the potential to make even bigger improvements to how governments are run.
City Government and the Crypto Transformation
If the internet was the new technology that became mainstream in the 1990s, today it’s crypto.5 I broadly call it crypto technology (in this case, crypto is short for cryptography, not cryptocurrency) because crypto technology includes blockchain and cryptocurrency as subsets. Blockchains wouldn’t work as we know it without cryptography. And blockchain technology is the key building block for the next transformation in government.
Blockchain is a way for a block (a group of transactions like “A sends $10 to B,” and “B sends $5 to C”) to be recorded chronologically on a public ledger, forming an immutable chain. The ledger is something that anyone can see. You can use a “block explorer” like Etherscan.io to view any transaction ever made on the blockchain, or even filter only those transactions associated with a particular user. The blocks and all their transaction data are not stored in one centralized place (like a bank, or government agency) but are stored in multiple locations by participants that constantly update and synchronize their copies of the ledger via connection to the network.
The decentralized nature of the blockchain is critical to its potential use case in government, because it means that citizens don’t have to “trust the government” to correctly input the transaction, not alter data, or keep the records safe.6 This has obvious benefit in countries where governments are widely considered to be untrustworthy - consider the lack of trusted land registry systems in Ghana and Brazil - but may also be useful in countries like the United States where trust in government seems to be eroding. Also critical to the government use case is that “a block could represent transactions and data of many types — currency, digital rights, intellectual property, identity, or property titles, to name a few.”7
If I had to guess, I’d say in 20 years we’ll be looking back at government now in the same way we look back at how governments were run in the 1990s. Instead of laughing at file cabinets and paper copies with official government ink stamps, we’ll be laughing at the ridiculously arduous and still paper-intensive process of buying a home. In the crypto era, I’ll sell you my house by executing a contract on the blockchain, and then sending the property title (which exists as an NFT) from my crypto wallet to yours. No paper or “wet” signatures required.
That’s just one small example of what could change, but there are so many other parts of city services and governance that can benefit from crypto. I hope to explore many of them in this newsletter - but to start, I plan to focus on voting systems and property transactions.
Why a newsletter?
I’m excited about bringing crypto technology into our cities and our government, and I want to be a part of the movement that makes it happen. But to get people comfortable with the ideas and ultimately implementation, it’s going to take a lot of explaining. Especially for people who aren’t familiar with crypto (I’m still learning too!). We’ll need to describe exactly why a change would be beneficial and how it might look. And with specifics. “Let’s become a crypto city!!!” is not really a call to action. But, “Let’s put the city’s real property database on the blockchain, and get rid of this archaic paper system, and here’s how it might look” - that’s a specific conversation that you can have. Even new “crypto native” cities, like what CityDAO is experimenting with, will need to think through how to implement new systems using crypto and blockchain that have never been tried before.
I want to help with all of that, and add to the conversation. That’s why I’m writing a newsletter. So here goes... I hope it's useful.
I’m very wary of making it seem like I know the entirety of ideas in this space (I’m certain there are some great resources I’m missing and haven’t read yet) but here's a few websites / ideas / that start to talk about how cities are run and governed. In all cases, I’d say these resources are crypto agnostic - as in the ideas don’t require crypto to implement, though I’d argue a crypto city would help make implementation easier.
Startup Cities - A newsletter about how cities can be run / built more like startup companies.
Charter Cities Institute - A non profit focused on helping to establish new cities that are granted special jurisdiction to create a new governance system and enact policy reforms.
CityDAO - Their mission is to build an on-chain, community-governed, crypto city of the future. As of June 2022, they have purchased a plot of land and issued governance rights of the land as NFTs. CityDAO will likely be a series of real world experiments with the intention of ultimately building an actual crypto city.
The Network State - Balaji Srinivasan’s website, 1729.com, and the book The Sovereign Individual by William Rees-Mogg and James Dale Davidson both talk about how governments and nation states will likely transition to a network state model. The concept of a network state is related to crypto cities, in the sense that they will be well positioned to become network states, and is a useful frame to think about what services network states/crypto cities will need to provide.
Niche fields of economics - I’ve come across a number of resources that are rooted in economics but also talk specifically about city and governance issues. The book Radical Markets and its associated non-profit group RadicalXchange discusses property taxes, voting systems, and other issues. Websites like the Market Urbanism Report, talk about the intersection of urban policy and free market ideas. Donald Shoup’s book, The High Cost of Free Parking is a deep dive on one of the core values of Market Urbansim (market priced parking), and how cities should adjust parking policies to better match their true cost.
Philosophy and History of Democracy - It sounds crazy to include this here, but in general the history of democracy from Ancient Greece and Rome as well as its philosophical underpinnings are relevant today. If crypto and blockchain makes it easier and more secure to vote, then we may want to consider the typical city council structures that have evolved through the ages. How have other civilizations experimented with representation, and what should a crypto city strive for?
If you can think of others, please send them my way in the comments!
Its been 25+ years since AOL hit 1 million subscribers in 1995. They started mailing those free CDs to homes in 1993, and then by 1996 they had 5 million subscribers. 1995 is my unscientific answer for when it became clear that the internet was a thing.
Its probably still too early to be able to say when crypto became mainstream (usually you can only do that with the benefit of hindsight), but the fact that Crypto.com, FTX Trading, and Coinbase had advertisements in the 2022 Superbowl might mean that we are officially here.
It’s hard to imagine this as a concern in a first-world country but this is a legitimate concern. For example, the Haiti earthquake in 2013 destroyed or damaged 60 years of archives - including information like who owned what property!