Mayor Ken Sim of Vancouver is working to project a tech-forward image, donning T-shirts, using headset microphones, and even keeping an exercise bicycle in his office.
Mayor Ken Sim of Vancouver is known for presenting a tech-forward image, be it through his T-shirts, headset microphones, or even the exercise bicycle in his office. This persona is largely in keeping with his recent push for cryptocurrencies.
In December, the ABC-majority council led by Sim passed a motion that directed staff to investigate whether Vancouver could be made a “bitcoin-friendly city.” The investigation would include things like whether or not the city’s tax collection or staff payments could be made in Bitcoin and various digital assets, and would potentially include whether the city should invest in bitcoin or other digital assets with some of its surplus funds.
This proposal has created some excitement, but it is still mostly symbolic. A real effort to incorporate cryptocurrencies into municipal transactions would require the approval of the provincial government, which appears to be extremely unlikely. However, city staff are expected to return with a report by the end of the month, and there is also an upcoming byelection on April 5, which may give Sim a stronger majority, and could help this gain more traction.
At their core, cryptocurrencies are digital assets that can be traded and sometimes spent. They are based on complex encryption codes to prevent counterfeiting. But, as a $1.5 billion hack in Dubai—that’s the largest known theft of any kind in history—shows us, crypto exchanges are not free from the risks of hacking.
The key problem with cryptocurrency is that it creates negative environmental effects. Crypto tokens are produced through a process called “mining,” which requires immense networks of computers powered day and night to consume significant amounts of electricity. In 2023, global consumption of energy utilized in cryptocurrency mining was about 200 terawatt-hours, approximately the same as total energy consumed by a middle-income country. Cryptocurrency companies may state they use “clean energy,” yet critics argue that the negative effects of crypto companies’ energy use is just greenwashing.
Critically, Sim’s assertion that the energy consumption required for crypto could result in new renewable energy projects in British Columbia is misguided—clean energy projects and initiatives are not constrained by demand for energy, and renewable energy should be used to displace polluting energy sources, not to use more.
Another core challenge associated with cryptocurrencies is their total absence of base value. Unlike real estate, stocks, or even precious metals, crypto has no actual economic purpose. Most crypto holders are speculating and do not spend their crypto at all. The speculation generates extreme price volatility, with crypto consistently swinging dramatically in prices or losing or gaining 50% of value in days. This is because its price is driven simply by investor sentiment, much like a Ponzi scheme, where its sustainability depends solely on new buyers coming in.
