San Jose opts not to extend crypto pilot


12 July 2022

by Sarah Wray

A project using a crypto-mining Internet of Things (IoT) network to raise funds for digital inclusion in San Jose won’t be continued beyond the pilot phase, the city has confirmed.

The pilot with Helium was announced in September and ran from January.

Volunteer residents and small businesses hosted a total of around 20 hotspot nodes on a decentralised IoT network. These mine Helium cryptocurrency tokens (HNT) based on providing wireless coverage and transferring data from nearby devices.

San Jose’s programme set out to cover the expenses of low-cost internet plans for over 1,300 low-income households for a year.

As the pilot phase comes to a close, Clay Garner, the City of San Jose’s Chief Innovation Officer and Director of the Mayor’s Office of Technology and Innovation (MOTI), told Cities Today: “We’re shifting our digital inclusion efforts toward accelerating device refurbishment – which has already generated more than US$130,000 for the San José Digital Inclusion Fund with just two partnerships.

“We believe this is a more scalable, reliable and green fundraising model for cities to bridge the digital divide.”

Through its Digital Inclusion Fund, launched during the pandemic, San Jose aims to raise and distribute US$18 million in grant awards for internet connectivity, digital training and devices over the next ten years. The device refurbishment scheme restores donated devices from technology companies and sells them to fund new devices for San José students in need.

On the Helium pilot, Garner added: “We are in the process of converting the HNT tokens to fiat currency with Helium. The final amount of dollars generated will be subject to price variations of HNT on the day of conversion from HNT to USD – thus determining how many residents will receive the subsidy. We will conclude the Helium pilot after the funds are fully disbursed.”

A spokesperson for Helium said: “The Helium ecosystem is currently working with other companies that are focused on smart city applications, and at this time we are focused on building the network with important use cases.”

Crypto crash

Cryptocurrencies had begun to pique the interest of a handful of US cities, but San Jose’s decision comes during what is being described as a ‘crypto winter’ as the value of Bitcoin and others has plunged in recent months.

Miami was the first to agree to accept funds from CityCoins, which aims to create a new revenue stream for local governments alongside miners through city-specific crypto tokens. Miami received a US$5.25 million payout from the project in February, but the coin has lost over 80 percent of its value since it launched in August 2021.

After MiamiCoin, CityCoins also launched NYCCoin but Mayor Adams’ administration has apparently not engaged since he took office in January. Philadelphia briefly explored the idea of its own CityCoin but swiftly dropped it again.

In a separate initiative, San Jose recently announced a US$750,000 programme funded by the Knight Foundation to increase transparency about technologies such as automated licence plate readers and to use data to drive equitable outcomes. This builds on work led by Harvard Business School Leadership Fellow Christine Keung to establish a data equity team and develop an equity framework.



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