Although there have been multiple attempts over the years to build “crypto cities” — special areas that rely on blockchain technology to function — most of the experiments have failed, and cryptocurrency executives think they know why.
One recent notable project is Akon City, the brainchild of Senegalese-American singer Akon. Announced in 2018, it was supposed to be a $6 billion smart city with a cryptocurrency-based economy, but… It was officially abandoned in July.
Satoshi Island, A A project to purchase an entire island Near Vanuatu, it was launched in 2021 with the aim of creating a home for cryptocurrency professionals within it Based on blockchain economy. The last one to update It was July, and the project was still working to establish basic services and secure a licensing agreement with stakeholders on the island.
There were also big plans to build A blockchain-powered city called Puertopia At Roosevelt Rhodes Naval Base in Ceiba, which was also announced in 2018. But there haven’t been any meaningful updates in years.
Crypto cities are solving the wrong problems
Speaking to Cointelegraph, Ari Redbord, global head of policy and government affairs at blockchain intelligence firm TRM Labs, said that many cryptocurrency city experiments fail because they focus on impossible goals.
She envisions several Crypto City projects Build an entire city from scratch Which use a blockchain-based economy, are financed through tokens, and are completely independent from the wider community.
However, Ribor sees the better opportunity in modernizing existing economies – incorporating artificial intelligence to help analyze risk, detect fraud, drive smarter decision-making, and use blockchains to provide a layer of trust that ensures transparency and accountability.
“The idea of a crypto city to me is one that is already happening,” he said. “It is about modernizing the systems that we already rely on. As institutional adoption increases and governments formulate clearer rules, the world’s financial infrastructure is moving on-chain.”
“Every city will become a crypto city, not through ideology but through technology – faster, safer and more transparent rails for transferring value.”
A pure crypto city is possible, but difficult
Kadan Stadelmann, chief technology officer at blockchain platform Comodo, told Cointelegraph that self-sovereign cities powered by crypto and… Decentralized systems Possible in an uncontrolled area, such as international waters.
He believes that achieving success will require blockchain technology to ensure transparency, security and adaptability in a wide range of sectors, including energy and food.
It also requires intense dedication and central vision from residents, who must be willing to sacrifice modern conveniences for it to be fully implemented.
However, it may also come with other threats, such as those from governments willing to collect taxes and enforce local laws, and potentially powerless to defend against attacks.
“Even if an individual buys an island, what should he do if some pirates attack it? There is no police or army on the island. There is no hospital either. A sovereign city multiplies these risks many times over,” Stadelmann said.
“The vast resources of cryptocurrencies could be better used to improve the world we already have.”
Better idea: a private encryption area in a modern city
Vladislav Ginzburg, founder and CEO of blockchain infrastructure platform OneSource, told Cointelegraph that using cryptocurrencies in a modern city-state like Dubai with government support would be a more viable option than starting from scratch.
“Certain cities have already done a very good job in digitizing government services, Kiev and Dubai come to mind, so the first major step is already possible,” he said.
Maja Vujinovic, co-founder and CEO of ethereum treasury company FG Nexus, also doubts whether a cryptocurrency city can succeed without state support, as it will face difficulties with ownership law and governance.
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“The realistic path is not a new sovereign city, but rather indigenous crypto neighborhoods within state-backed areas where licensing, anti-money laundering and immigration issues have already been resolved,” he said.
“The winning ingredients are: a government partner with regulatory and visa mandate, multi-billion dollar bridge capital, clear crypto rules, and established employers in AI, crypto, and biotech.”
Sean Ren, co-founder of blockchain-native artificial intelligence platform Sahara AI, believes that if the cryptocurrency city hopes to evade government oversight and regulation, it will be doomed to fail.
However, A An area designated for this purpose within an already established city Testing new technologies, such as token equity or AI data management, will have a greater chance of success.
“The real opportunity lies not in creating walled gardens for tech elites, but in creating regulatory funds that feed lessons into national policy,” he said.
“A city designed to responsibly test AI training rules, data source standards, or token-based economies can add real value.”
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