Understanding CityCoins Mining
How Do I Get CityCoins?
Each time a CityCoin launches in a new city, the only way to obtain tokens is to mine them. No CityCoins are issued or distributed prior to the start of mining, and CityCoins’ mining process relies on the Stacks protocol — an open-source network that allows developers to easily build decentralized applications (dApps) and smart contracts on top of Bitcoin’s base protocol layer.
Each time a new CityCoin such as MiamiCoin launches, 20+ unique wallets are needed to activate the token’s mining process. Once this happens, a 150 block (~24 hour) countdown begins, signaling the start of the CityCoin’s mining process at the end of the countdown period. From there, anyone is eligible to participate in the CityCoins mining process within a given Stacks block and be rewarded for their contributions.
Mining for the first ever CityCoin, MiamiCoin ($MIA), is slated to begin on August 3rd, and you can sign up at citycoins.co for updates on the MiamiCoin launch.
There are no hardware requirements for mining CityCoins, and in order to mine CityCoins and compete to mint them, all you need to do is transfer Stacks (STX) tokens to that CityCoin’s smart contract for a given block. After miners have submitted this STX bid, a winner for that block confirmation round is selected by a Verifiable Random Function (VRF) weighted by each miners' bid relative to the total volume of bids sent in that block. For instance, if Alice sends 10 STX to the contract and Bob sends 30 STX, then Alice and Bob have a 25% and 75% chance to win the rewards for that block, respectively.
Sending STX to a Stacks smart contract is a one-way transfer, and once the STX tokens are sent to the contract, they are distributed in one of two ways:
- If there are people Stacking the CityCoin, then 70% of the bid is sent to Stackers and 30% of the bid is sent to the city’s custodied wallet.
- If nobody is Stacking the CityCoin, then 100% of the bid is sent to the city’s custodied wallet.
Please note: Right after mining is activated and during the first reward cycle (reward cycle #0), 100% of all STX sent by miners is transferred to the city. During this time, CityCoins can be stacked for the next reward cycle, and following this initialization period Stacking will be available indefinitely.
You can only submit a mining bid once per block, and once you’ve transferred STX to the Stacks smart contract that bid is locked in. Stacks blocks are generated in tandem with Bitcoin blocks, meaning that a new block is created roughly every ten minutes, and the block generation schedule will follow Bitcoin’s “halvening” timeline.
CityCoins Mining Rewards
In order to ensure the security of the platform, miners must wait for a maturity window of 100 blocks (~16 hours) before they can claim their mining rewards. After this window passes miners can claim their rewards at any time. Note that new CityCoins are not actually minted until miners claim them, which means that the total supply will only increase once miners claim their rewards.
By leveraging Bitcoin’s security to power the creation of smart contracts and dApps, CityCoins offers a secure and egalitarian way to participate in CityCoins’ mining process and earn rewards. We believe the model we’ve established — which simultaneously rewards miners and replenishes the crypto wallets of participating cities — makes it easy for anyone to help validate on-chain transactions and power the CityCoins network.
For more information, please view the CityCoins documentation page.