The idea of allowing residents to use digital currencies to pay their utility bills was the brainchild of Place 1 Commissioner Jacob Howell, who said it could be one way to help Mercedes move into the future.
“Now, this item I feel would not only help push not only business but innovation and future growth and future thinking for the city of Mercedes and for the region. This item does not only just represent today, but it represents plans for tomorrow, as well, and progressive, forward thinking,” Howell said.
With no real-world assets to back up a digital currency such as Bitcoin, it is through trading that cryptocurrency investors generate profit — hoping buyers will pay more for the crypto than they themselves paid.
Cryptocurrencies, or crypto, are digital currencies that can be used to purchase goods and services. They can also be traded for profit.
And that day may come sooner than not, after the Mercedes City Commission unanimously voted to have city staff conduct more research into the issue during a commission meeting Tuesday night.
“As we all know, the future is always something of importance. And being innovative and forward-thinking is important,” Howell said as the commission began their discussion on the idea.
According to nerdwallet.com, “Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions.”
It is that combined effort of multiple computers, often referred to as nodes, which helps make cryptocurrency so secure.
“This network of thousands of nodes around the world vie to confirm the transaction using computer algorithms,” nerdwallet states. And therein lies another way to profit from cryptocurrency. That process of using multiple peer-to-peer computer networks to confirm cryptocurrency transactions is known as “bitcoin mining.”
With Bitcoin, for example, the miner who can achieve validation of a transaction first receives a new Bitcoin for their efforts. But, as competition to become the first to validate a transaction increases, so, too, does the computing power needed to mine cryptocurrencies.
Since the invention of Bitcoin in 2009 by Satoshi Nakamoto — a pseudonym for Bitcoin’s anonymous developer — thousands of cryptocurrencies have entered circulation online, each requiring substantial computing resources to mine. Research by Columbia University’s Columbia Climate School shows that Bitcoin alone consumes more than 700 kilowatt hours of electricity per transaction, and more than 121 terawatt hours per year. That’s more electricity than tech giants Google, Apple, Facebook and Microsoft consume in a year, combined, the school reports. Bitcoin alone consumes more energy in a year than the country of Argentina.
The town, which has a population of just under 30,000, began accepting cryptocurrency payments for utility bills via BitPay, a Bitcoin service provider, just this spring. And in August, a company called CityCoins unveiled a cryptocurrency called MiamiCoin, which Miami Mayor Francis Suarez hopes to one day be able to use to pay city salaries, among other uses.
Thus far, only a handful of other cities in the United States have approved such uses of cryptocurrency, including Williston, North Dakota. But back in the Rio Grande Valley, should Mercedes approve the use of cryptocurrencies utility bill payments, it would be the first city in Texas to do so.