Tech
Nevada Smart City: A Millionaire’s Plan to Create Local Government
March 18, 2021
Image source, Blockchain
Image Caption: Jeffrey Berns, founder of Blockchains, made his fortune trading cryptocurrencies
In the US state of Nevada, a radical experiment is being considered. It would allow new local governments to be formed on land owned by tech companies. Jeffrey Berns, the cryptocurrency millionaire who proposed the idea, is convinced of its revolutionary potential. The challenge now is to change the minds of skeptics who are not. For some, one man’s utopia is their dystopia.
Loosely translated from ancient Greek, utopia means “nowhere.” A place that does not exist.
For now, that’s an apt description of a place that Mr. Berns and his software company, Blockchains, say could become a remarkable place.
The site is a barren 67,000-acre (271 sq km) plot of land in rural Storey County, Nevada. Mr Berns bought the land for $170 million (£121 million) in 2018.
In this site he hopes to develop a “smart city” starting from the Internet.
Called Painted Rock, it would include all the elements of a typical city—homes, schools, and businesses—but with one key difference. Residents would use the city’s services and cryptocurrency on digital applications built with database technology known as blockchain.
Unveiled last year, the plan calls for a city of more than 36,000 residents, 15,000 homes, and 11 million square feet of commercial space. Blockchain estimates that the city will ultimately generate $4.6 billion in output annually.
To make that happen, Mr. Berns says Nevada needs a new model of local government. This government would have the power to raise taxes, enforce the law and administer public services like schools, utilities and transportation.
“There are some really fantastic things we could develop if we had the space and the flexibility to do so. That’s what this is all about,” Mr Berns told the BBC.
This vision has found favor with Nevada’s Democratic governor, Steve Sisolak. In the coming months, he will seek to pass a law that would allow Blockchain and other companies to create self-governing “innovation zones” in the state.
Under the proposal, only high-tech companies with at least 50,000 acres of land that promise to invest $1.25 billion could establish innovation zones. These zones would initially be overseen by three governor-appointed supervisors. Elections for this board of supervisors would only be held once 100 residents live in the zone, which would be subject to state law.
For Mr. Sisolak, the innovation zones represent the forward-looking vision needed to revitalize Nevada’s tourism-based economy after the coronavirus pandemic.
“There’s no question about it: This is a big idea,” the governor said at a briefing in February. “But our state isn’t afraid to think big.”
Image source, Blockchain
Image Caption: Blockchains has created artistic renderings of what its smart city proposal could look like
From the beginning, the company has been inextricably linked to the governor’s legislation, which seems tailor-made for its smart city project.
While political contributions are not uncommon in the United States, they raise questions about the donor’s motives.
So what is the philosophy behind this project?
“I’m not anti-government,” Mr. Berns said. “But I think the government has been too much in our business. I think corporate America is worse than the government at intruding on our business. So I’m trying to create a place where they can’t interfere.”
For Berns, “they” represent an obstacle to a future without risk-averse politicians stifling innovation or irresponsible tech companies harvesting our data for profit.
According to Berns, blockchain will help us invent this future.
What is blockchain?
- Blockchain is a digital database technology that records information across a network of computers
- Allows anyone with access to the database to review, but not change, the information added
- Blockchain was originally invented to track transactions in cryptocurrencies like Bitcoin
- But it has also been used for other purposes, such as building platforms that record votes in elections or monitor food supplies.
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Video Caption: Karishma Vaswani Examines Blockchain and Explains How It Works
In the smart city envisioned by Mr. Berns, residents would conduct most of their business on blockchain applications, eliminating the need for “middlemen” like banks. In theory, these residents would control their own data, with their own devices, with their own digital identities.
“I want to create a place where we can rethink things. Where we can democratize democracy,” Mr. Berns said.
As for how this would work in practice, the details are vague. Aside from talk of a zero-carbon city, little is known about water, energy, and transportation provision. More importantly, many of the applications needed for the city have not yet been invented.
Even Jeremy Aguero, an economic analyst hired by Blockchains, couldn’t imagine what a blockchain-based city would look like.
He told the BBC it was inconceivable, as “putting a man on the moon” had been for those who first attempted the flight.
One feature he was confident about was a tax levied on blockchain transactions within innovation zones. He likened it to a credit card transaction fee that would raise revenue for local and state authorities in Nevada.
Like Mr. Aguero, Mr. Berns, a former consumer lawyer who made his fortune trading cryptocurrencies, has a well-rehearsed pitch for blockchain.
Yet for all his idealism, he has not done enough to address the concerns of some local leaders, residents and experts.
Image source, Blockchain
Image Caption: Blockchains hopes to one day house 36,000 people in its smart city
On March 2, Storey County elected leaders voted to oppose the formation of a “separatist” government on Blockchain-owned land.
Speaking to the BBC, spokesman Austin Osborne said leaders supported the idea of smart cities but were “not in favour of county-breaking”.
A separate government was “not necessary or appropriate” because Storey County had already successfully hosted a Tesla car factory and two data centers owned by Google and Switch, he argued.
“Storey County has transformed Northern Nevada,” he said. “Any argument that this county can’t build anything because it can’t keep up is completely wrong.”
Furthermore, he said, there are “people who are evaluating whether this kind of model fits into our democratic system.”
One such person is Professor Shoshana Zuboff, author of The Age of Surveillance Capitalism, a book about the economic logic of powerful technology companies.
He was wary of Mr. Berns’s faith in blockchain as an engine of data democratization and liberation from Big Tech.
“Blockchain technology is a substitute for contracts. It’s a substitute for social trust,” he said.
“So there may be specific applications for blockchain technology that are useful. But blockchain as a substitute for society is essentially throwing in the towel on the idea of democratic renewal.”
He said that technology companies have long been interested in finding areas in which they can establish themselves as a governance power.
Google’s Sidewalk Labs project in Toronto, Canada, is a prominent example. The effort to transform a disused waterfront into a smart city was abandoned last year after strong opposition from privacy advocates and financial pressure.
This is one of many cautionary tales for blockchains.
Now it’s up to Nevada lawmakers to decide whether the blockchain-powered smart city will succeed where others have failed.
Image source: Getty Images
Image Caption: Blockchains has a like-minded neighbor in Tesla, which has a factory in Storey County
The governor’s bill is expected to be introduced in the Nevada Legislature within the next few weeks.
Pete Ernaut, a Blockchains lobbyist, said the legislation’s fate will likely be decided by the end of May. Then, if the legislation passes, Blockchains says it will release a master plan for its innovation zone in July.
But just because it can, does that mean it should? If regulators decide it shouldn’t, or if something goes wrong, blockchain territory “will be sold,” Mr. Berns said.
In that case Painted Rock would no longer exist, it would be a mirage in the desert.