Cities getting smart, not SmartTM
Decentralized tech is the exact opposite of major Smart City projects.
By now you may have noticed I’m bullish on Bitcoin. I believe in it not only as currency but as a complete system of social organization and creation of wealth.
That is what the Smart City TM movement tried to do from the Top Down for a while, in a push to increase surveillance and oversight of city systems. Smart City programs cost cities billions of dollars and require constant reinvestment to keep up with the latest tech.
The current trend, known as web3, is towards decentralization. That shift is smart, not SmartTM, and I believe that it has the potential to reset how our cities were growing before they grew out of scale.
Cities have always been smart. Otherwise, they would not have invented sewers or aqueducts and devised systems to protect property rights. They grew exponentially because they were once independent systems of social organization, collaboration and creation of wealth.
Aleppo in Syria has been inhabited for about 8000 years and is among the oldest cities in the world. It was a major hub in the silk road bridging goods, ideas, innovation and delicious food between Southeast Asia and the West.
Lübeck is another great example, as the de facto capital of the Hanseatic League, a network of merchant guilds and independently chartered market towns in the Baltic region that promoted trade and mutual defense.
They and thousands of others grew because they allowed free agents to make independent decisions within loosely regulated systems that moved in the direction of the sum of those individual decisions. Not by fiat, but decentralized.
In these tumultuous days, local governments have an opportunity to make their cities engines of wealth and prosperity again. Emerging technologies like Blockchain, which push for decentralization are allowing much of the energy that made Aleppo or Lübeck grow to be channeled into new frontiers before our eyes.
@VitalikButerin, founder of Ethereum, an “alt-coin” that is the apparent runner-up in the cryptocurrency environment, gives a good overview of relevant ways in which cities spearhead the future. See his article here.
I am bullish on technology allowing cities to become the engines of creation they once were, by going one step above the current decentralization trend and allowing citizens to make many of their own decisions. I wrote about this a few months ago here on Substack.
Among other areas of the regulatory framework in cities, Zoning is a specially destructive force, because it has rationalized the components of the city and broken it up as if it was possible without horrible consequences. We are living those consequences now.
Homelessness, high housing prices, struggling local economies, vacancies and sprawl are all effects of meddling with the system and separating its components so no organic growth can happen. They have all been legislated and regulated into being.
Technology now allows for “DeZoning” or “decentralized Zoning”, which can fix several of those problems. This is my vision of how that could happen. The TL;DR is:
Property records go on-chain, with no trusted third party acting as custodian
Actual Zoning is downgraded to a set of rules (a master code) for cohabitation that change for each case and are enforced by smart contracts
Amendments to the master code are made by the direct voting of every node in the network
Another great emerging application is city coins. Miami under the leadership of Mayor Suarez, who was just reelected, has issued MiamiCoin, San Francisco seems to be interested and Eric Adams, the newly elected mayor of New York City mentioned that he’d be interested.
Stacks is a company that is creating a programmable layer over Bitcoin, which has allowed apps like City Coins to emerge. Follow @muneeb, the founder of Stacks for exciting information about their work.
Reno is a city that is making great progress into the exploration of blockchain-based city management.
The mayor is planning to turn public art into NFTs to help finance arts programs. She intends to create RenoDAO, which is a Decentralized Autonomous Organization, which would manage the project, and a RenoCoin that would gain its value from the management and growing the city’s real estate portfolio.
City budgets from State and Federal allocations will be dramatically reduced in the future, so exploring other forms of revenue using technologies with such a tremendous potential is simply smart.
At a recent visit to Flint, some discussion came up about the potential of DAOs, blockchain and local coins to help struggling towns in the Rust Belt. Cities like Flint and others with similar economies that could use a boost are prime for such experiments. I wrote another Substack about my vision after that trip and those talks.
I’m currently trying to figure all of this out and come up with something concrete to start writing local governments about. If any of this resonates and you think you could add clarity and find value, write back so we can chat. I truly believe cities are at a crossroads that can take them back to being creators and build prosperity.
But they need a push.