A lot has been made of the environmental impacts of NFTs and cryptocurrencies. Some of this criticism is reasonable: certain networks do require significant resources to operate. Likewise, there are solid counterpoints indicating that the impact may be overblown.

Regardless, with environmental impact in mind, CityCoins is designed to leverage the security of Bitcoin with no added environmental cost. 

Energy consumption is the cost of security

Before we go too far, you need to understand a little bit about how Bitcoin works. To oversimplify a complicated process: Bitcoin spends electricity to ensure security.  

The Bitcoin network uses Proof of Work (PoW). In short, Bitcoin verifies everything that happens on the network by asking miners' computers to solve complex computational puzzles––the “work” in PoW. The more they solve, the more complex the puzzles become. 

That computing requires an army of constantly-running computers. Those computers demand a lot of electricity, and that power is often generated by natural renewable resources. This is the cost of creating a permanent, immutable ledger in a PoW system. 

Ultimately, Bitcoin’s strengths stem from its use of resources. The PoW mechanism ensures on-chain consensus is secured through actual physics. Without a physical cost, a system is inherently flimsier and easier to compromise.

CityCoins use Bitcoin’s security at no extra cost

In a process CityCoiners have dubbed Recycled Proof of Work, CityCoins builds on the Bitcoin network’s security at no additional environmental cost. 

Since Stacks is built on top of Bitcoin, its Proof of Transfer protocol is directly underpinned by Bitcoin’s PoW consensus protocol––this is the mechanism that serves as Bitcoin’s undisputed and secure “source of truth.” It is the immutable and permanent record of every transaction on the network.

CityCoins uses a light version of the same protocol as Stacks, which recycles Bitcoin’s PoW protocol outputs to power its own network. 

Computers need to work hard to add to Bitcoin’s immutable ledger: it’s what makes that ledger immutable. But where Bitcoin miners spend electricity, CityCoin miners spend cryptocurrency. (That crypto isn’t wasted either: all crypto spent mining CityCoins goes to Stackers and the city’s treasury.)

Ultimately, CityCoins gets utility from Bitcoin without additional energy costs. And because CityCoins are built on Stacks, every transaction settles on Bitcoin.

Making the most of energy

The good news is that we don’t need numerous Proof of Work networks out there devouring resources. If we’re smart, a single PoW network can act as a foundation for many other protocols to build on top of––just like CityCoins has done with Bitcoin. 

Each of these protocols receives the benefits of Bitcoin at no added cost to the environment. 

Bitcoin requires upfront energy to work—that’s unavoidable if you want to have a secure network. But these additional protocols maximize the return on those resources, wringing every bit of usefulness out of them.

This is what we mean by Recycled Proof of Work. CityCoin recycles the energy used to power Bitcoin to maximize efficiency. The more protocols that get built on top of that foundational system, the more efficient the entire system becomes. (It also means that people can mine MIA and other CityCoins without the same sophisticated hardware required to mine Bitcoin.)

CityCoins empower communities. Sensible use of natural resources is just another way to keep communities healthy and thriving.