Twenty one cities in Pennsylvania, including Pittsburgh, have faced the threat of bankruptcy for several years. A subcommittee report in late 2013 suggested several means of mitigating this problem’s causes, including acceptance of digital currency to make payment of taxes and fines more convenient. City officials declined to comply with this suggestion, however, alleging that digital currencies like Bitcoin remained too volatile for such purposes. The city’s finance director, Paul Leger, said on their behalf that “We would need to see a longer term proof of stability for digital currency to be good stewards of the public’s funds.”
Leger appears not to have heard of BitPay, a Bitcoin payment processor that offers free and unlimited payment processing. Bitpay immediately converts Bitcoin payments into USD, and deposits them into the recipient’s bank account. Contrary to Leger’s claim, such a payment method would avoid any of the risks associated with digital currencies’ volatility.
A city spokesperson further said that “Currently residents cannot even regularly use credit or debit cards for all payments,” presumably because such payment methods’ implementation would demand too much skill from the city employees. BitPay offers a solution not only of similar simplicity and convenience as using a credit or debit card, but also liberates all parties involved from the processing fees typically imposed by these conventional methods.
Assuming that Pittsburgh experiences a typical rate of funding loss to fraud, this factor alone drains about $200 million annually from its economy. Since the blockchain can practically immunize its users against fraud, fully implementing it (beyond merely accepting Bitcoin) could completely remedy Pittsburgh’s threat of bankruptcy. The blockchain’s efficient assurance of uploaded documents’ integrity and minimal transaction fees would further reduce legal expenses, in ways that no credit or debit card processor could otherwise possibly manage.
In light of these facts, Pittsburgh’s residents ought to question the true reason for their officials’ decision. As evident by Pittsburgh’s ongoing financial failure, incompetence might offer the most likely explanation. Further justifying suspicion of this cause, Pittsburgh’s previous mayor fired Leger from his position as finance director in 2006. Assuming that ulterior motives didn’t influence the officials’ decision, the city might want to consider electing officials who can keep pace with contemporary technology.