Mercedes, Texas, plans to take crypto for utility bills

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(TNS) – Do you have Bitcoin, Ethereum, Dogecoin, or some other form of cryptocurrency? Mercedes residents could one day use them to pay their utility bills.

And that day could come sooner than not, after the Mercedes City Commission voted unanimously for city staff to conduct more research on the matter at a commission meeting on Tuesday night. .

The idea of ​​allowing residents to use digital currencies to pay their utility bills was devised by Place 1 Commissioner Jacob Howell, who said it could be a way to help Mercedes move towards the future.

“As we all know, the future is always important. And being innovative and forward-thinking is important,” Howell said as the committee began its discussion on the idea.

“Now I think this element would help not only boost not only business but also innovation, future growth and future thinking for the city of Mercedes and for the region. This element not only represents today, but it represents plans for tomorrow, as well, and progressive, forward-thinking, ”Howell said.

Cryptocurrencies, or crypto, are digital currencies that can be used to purchase goods and services. They can also be traded for profit.

With no real assets to back up a digital currency like Bitcoin, it is through trading that cryptocurrency investors make profits – hoping that buyers will pay more for the crypto than they have. paid themselves.

According to nerdwallet.com, “Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread over many computers that manages and records transactions.”

It is this combined effort of multiple computers, often referred to as nodes, that helps make cryptocurrency so secure.

“This network of thousands of nodes around the world competes to confirm the transaction using computer algorithms,” says nerdwallet.

And this is where there is another way to profit from cryptocurrency. This 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 obtain validation of a transaction first receives a new Bitcoin for their efforts.

But, as the competition to become the first to validate a transaction increases, so does the computing power required to mine cryptocurrencies.

Since the invention of Bitcoin in 2009 by Satoshi Nakamoto – a pseudonym for the anonymous Bitcoin developer – thousands of cryptocurrencies have entered into circulation online, each requiring significant computing resources to operate.

Research by Columbia Climate School at Columbia University shows that Bitcoin alone consumes over 700 kilowatt-hours of electricity per transaction and over 121 terawatt-hours per year. That’s more electricity than tech giants Google, Apple, Facebook and Microsoft together consume in a year, the school reports. Bitcoin alone consumes more energy in a year than Argentina.

But back in the Rio Grande Valley, if Mercedes approved the use of cryptocurrency utility bill payments, it would be the first city in Texas to do so.

So far, only a handful of other cities in the United States have approved such uses of the cryptocurrency, most notably Williston in North Dakota.

The city, which has a population of just under 30,000, began accepting cryptocurrency payments for utility bills through 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 he can one day use to pay the city’s wages, among other uses.

“I think it’s something innovative, it’s something that will inspire other companies and think about development,” Howell said of the proposal to start accepting crypto payments in Mercedes.

But some members of the commission had questions, including the commissioner of Place 3, Jose Gomez.

“Is Mercedes ready for this? … Are we ready for this kind of currency? City Manager, do you like it?” Gomez asked, directing his questions to general manager Alberto Perez.

“Whether we’re ready for cryptocurrency today or not, I think it’s worth thinking about. What would it look like and how would it work?” Perez said, adding that he was more concerned with the security of digital currency.

Perez also raised concerns about the volatility of cryptocurrency exchange rates before referring the matter to the city’s chief financial officer, Nereida Perez.

Nereida Perez has said Mercedes should partner with an exchange service provider, but it comes with risks.

“The problem with these is that they’re not yet corporate-oriented, and they’re not SEC protected either. It’s unregulated, at least not at the moment.” , said Nereida Perez.

“They’re trying to convince the SEC [Securities Exchange Commission] that it is safe to invest because it is very risky due to exchange rates, ”she said.

The CFO was concerned that the cash value of a cryptocurrency could drop between when a resident makes payment for their utilities and when the city tries to convert it to cash.

“Let’s say a person pays their bill for $ 200, but the moment we trade it, we only get $ 160. We have a loss of $ 40,” Nereida Perez said.

Indeed, according to invest.com, the value of Bitcoin has fallen nearly 8% over the past week, from a high of $ 65,471 on Sunday to a low of $ 57,014 at the close on Thursday.

“The point is, we don’t invest in it; you accept it as a form of payment,” Howell said.

“This payment can be automatically transferred and transferred to a cash account or a cash payment,” he said, adding that Tuesday night’s discussion was not about getting crypto accepted as “a thing. overnight”.

Still, the majority of the committee appeared to be suspicious of the proposal, including Place 4 commissioner Joe Martinez, who supported Howell’s motion to consider the matter.

“I don’t think there is anything wrong with trying to find innovative ways to get people to pay their bills… but I don’t think we are fully prepared and I just don’t want us to. were jumping into something, ”Martinez said.

“I really encourage you to rescind the motion, if possible, so that we do some research and consider what it would take, what are the pros and cons, and how we can develop a plan to make this possible,” he said. -he declares.

Ultimately, Howell amended his motion to ask city staff to further research the issues. The motion was carried unanimously.

© 2021 The Monitor, distributed by Tribune Content Agency, LLC.

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