The mayor of the American town of Cool Valley, Jason Stewart, plans to give all its 1,500 residents $ 1,000 in Bitcoin. This initiative should be implemented by the end of 2021, and Stewart is now looking for additional sources of funding to help with such a daring undertaking.
We will remind, earlier the US government has already distributed «free money» to its citizens, but only in national currency. And now, front-line officials want to move to digital assets.
Note that this is not the first American mayor who believes in the prospects for the development of cryptocurrencies. Earlier, the approval of the coins was expressed by the Mayor of Miami, Francis Suarez. First of all, he was going to invest part of the city’s funds in Bitcoin. At the same time, soon after his venture, he spoke about his readiness to invest his own money in coins. Francis chose Bitcoin, Ethereum and Doge as investment targets.
Distribution of money in Bitcoin
The mayor seems to have a lot of faith in the innovation that the main cryptocurrency brings. Here is a quote from an interview with a local news outlet published in Decrypt.
See, Bitcoin is digital gold. I would like every household in my city to receive some amount of Bitcoin, be it the equivalent of $ 500 or $ 1000.
As a reminder, Bitcoin is often referred to as digital gold due to its characteristics. In particular, the maximum volume of BTC is previously capped at 21 million, and the rate of release of the cryptocurrency is halving approximately every four years. This event is known as halving, and it is one of the important innovations of the Satoshi Nakamoto project.
It is not yet known if only third-party sources of funding will be attracted for this initiative, or if there is a suitable amount in the Cool Valley budget. The Mayor continues.
I have very active sponsors who agreed to donate any money up to several million dollars. I also try to use at least some of the government funds. Or, perhaps, some of the money that was previously received as part of financial assistance during the quarantine.
However, there is one detail in Stewart’s strategy: even if the people of Cool Valley receive their bitcoins soon, they will not be able to immediately sell the coins. The Mayor is in favor of long-term storage of cryptocurrency, which after years may well grow in price «at least up to 500 thousand dollars. » Here are the details of the idea of the head of the city.
We are implementing something like a Bitcoin allocation schedule. The idea is that perhaps the recipients have not touched their coins for five years and only then they will be able to dispose of the BTC as they see fit.
Stewart’s opinion clearly would not be shared by the CEO of the gold mining company Evolution Mining Jake Klein. In a recent interview, he criticized the high volatility of Bitcoin’s price, that is, abrupt changes in the exchange rate. In his opinion, this will ultimately lead many investors to buy gold. As the expert noted, the crypt is allegedly still a purely speculative instrument and is not suitable for long-term investments with low risk.
However, Klein is quite liberal about BTC, given that his business is related to gold. The Evolution Mining chief noted that Bitcoin and the precious metal may coexist in the future, but the former will never fully catch on with the latter. That is, gold will forever remain one of the most popular investments of investors from all over the world.
We believe that the idea of buying cryptocurrency for city residents seems to be cutting edge. And although it is quite risky, because coins can fluctuate in price, the inhabitants of Cool Valley will surely appreciate such a gift. Especially if you get access to your bitcoins after a few years, when BTC will probably cost more due to its massive popularity.