Former Oakland mayoral candidate Bryan
Parker says the city missed an opportunity
with Bitcoin for reason greater than finances.
As Oakland voters headed to the polls during the November 2014 mayoral election, the cost of a single Bitcoin was roughly $350. Last December, the astronomical success of Bitcoin saw the cryptocurrency top $19,000. Today, one Bitcoin is worth $9,100.
For investors, Bitcoin has been a wild ride over the past five years. But during the 2014 Oakland mayoral campaign, Bryan Parker, one of 15 candidates for the seat, raised an interesting proposal. What if the city invested in Bitcoin, perhaps with an initial pilot program, to help fund basic social services and help the poor? Oakland’s city budget, at the time, was still reeling from the effects of the Great Recession, and money for hiring sorely-needed police officers was also scarce. Parker’s platform spoke of “Two Oaklands,” one half prospering, while the other reeling in financial insecurity.
“Bitcoin is a tool we can use to dissolve inequality, be it social or economic, and facilitate change for whole communities,” said Parker in January 2014. “I see the role of technology as solving real world problems, like job creation, in lasting ways, such as providing merchants cost-effective gateways into e-commerce and online markets.”
Parker’s idea, however, was mocked by his opponents and others. A well-known Oakland tech entrepreneur even pulled Parker aside at a tech competition that year in order to voice his skepticism over the push for Bitcoin. A writer for the now-defunct tech website Valley Wag penned a blog post titled, “Electing This Man Mayor of Oakland Will Be a Disaster for Oakland.”
Few at the time had a clear understanding of Bitcoin (many still don’t). Nevermind, its ramifications as a currency and later, using its underlying blockchain technology to potentially change the Internet into a more private and secure digital world.
Today, Parker says avoiding Bitcoin four years ago was a missed opportunity for Oakland. Not only the fact that if the city had only invested $100,000 back then in Bitcoin, its portfolio would be worth more than $2 million today. In addition, he says, the policy would not only have placed Oakland on stronger financial footing, but made it the darling of the tech world.
“Bitcoin would have shown a forwardness in thinking. A sense of innovation that would have put Oakland on a different education platform–STEM education and jobs–tech centers for companies with good paying jobs,” said Parker.
Oakland would have been far different place today, he posits. “We would have ran an experimental bet,” he said, “and even a small bet would have been successful in multiples. We would have had a pot of currency and watched how it would grow. Uber would have stayed. Jobs would have been created.”
The proceeds from Bitcoin would clearly be enough to help the city’s growing homeless problem and improve its streets, said Parker. “Once proven, we may have had enough money to then also help with affordable housing,” said Parker. Psychological, he added, the attention Oakland missed out from being the first city to accept Bitcoin could have been a boost in the city’s morale by “being known for something other than a dangerous place.”
Uber’s retreat from downtown Oakland despite the fanfare stoked by Mayor Libby Schaaf, is a result of the city failing to grasp its place as the third leg in stool, along with the South Bay and San Francisco, that represents Silicon Valley, he said. “My guess is they looked at things and looked at the chaos and crime and said, ‘Look, we’re going back to San Francisco,'” said Parker. “If an ethos of innovation in Oakland was in its DNA like San Francisco or Palo Alto, I think Uber would have said, ‘Of course we’re going to stay here.'”.
Hindsight, of course, is 20/20, but Parker says the notion on cryptocurrencies have long been predicted to one day replace cash. “If you go back to when Alan Greenspan talked about digital currency. We knew it was going to happen,” said Parker. “People went from gold to paper, to credit cards, and now to digital. I think it’s the way the world is going.”
Bitcoin’s volatility despite its impressive returns on investment, however, might still spook extremely conservative municipal finance departments. Take for example, when Parker first began raising the subject of Bitcoin for use in local government, its value had just plummeted from a then impressive $1,100 in early December 2013 to $350. Furthermore, in the months since pitching this story to Parker, the value of Bitcoin has dropped from around $12,000 to $9,100 on May 2. But in just the past two years the roller coaster nature of Bitcoin and not yet come close to bottoming out.