Miami, known as the “Magic City,” has been in the grip of crypto-mania for the past couple of years. Thanks in large part to the industry evangelism of top officials, including Mayor Francis Suarez, the city has been on a mission to become the national capital for cryptocurrency.
Miami’s Crypto Vision
Two years ago, Miami published its “Bitcoin White Paper” – a blueprint for its transformation into a crypto-centric city. Around the same time, prominent industry figures began relocating to the city. Miami even began hawking its own digital currency, MiamiCoin.
As the fever quickened, cryptocurrency exchanges began advertising on Miami billboards. Bitcoin ATMs were installed at neighborhood gas stations and convenience stores. And perhaps the most visible symbol of Miami’s crypto bragging rights occurred in March 2021.
The FTX Fallout
Miami-Dade County made waves with the announcement that it had sold the naming rights for its main sports arena, home of the beloved Miami Heat NBA franchise, to FTX. Once seen as the future of crypto, the notorious exchange is now bankrupt. Sam Bankman-Fried, the founder of FTX, has gone from the industry’s prodigy to a disgraced pariah.
That partnership, which is not even two years old, came to an unhappy end last week. On Wednesday, the beleaguered company and Miami’s local government finalized an agreement to terminate the deal and remove the now-tarnished FTX logo from the sports venue.
Over the past few months, as the scale of Bankman-Fried’s alleged fraud became clear, some city elders and the business community scrambled to unwind the affiliation.
Many parties had suspected from the start this was a terrible business deal.
Bankman-Fried, who has maintained his innocence, pleaded not guilty to federal fraud charges during a court appearance in New York earlier this month.
The financial costs of last year’s crypto crash have been enormous for the many thousands of investors. Scores of people lost funds they could ill afford to forgo. While reservations existed that FTX might crumble, its collapse was far swifter and more disastrous than most skeptics anticipated.
Critics of the partnership also cited the effects on the environment. Miami is considered by many to be a vulnerable major coastal city. Realistically speaking, crypto mining uses vast amounts of resources. As the New Yorker’s Elizabeth Kolbert wrote in an April 2021 article, “bitcoin-mining operations worldwide now use … about the annual electricity consumption of the entire nation of Sweden.”
The FTX collapse sent a devastating shockwave throughout the crypto industry. Yet it has survived and is steadily recovering from the disaster. Among the calls for reform is the task of reducing the industry’s carbon footprint.
As digital assets have become more commonplace, their mining has increased to meet demand. This was clearly demonstrated in a study performed by the research journal Nature Sustainability.
The study found that between January 1, 2016, and June 30, 2018, the mining operations for four major cryptocurrencies released an estimated three to 15 million metric tons of carbon dioxide
For cities highly vulnerable to climate change, such as Miami, the endeavor to offset crypto’s environmental impact is nothing less than critical. The environmental impact of turning this tropical metro into a cryptocurrency haven was always an underlying factor, even among the plans whose brightness rivaled the Florida sun.