The Mayor of Reno Is Betting Big on the Blockchain | WIRED

Gregory Barber

Business

06.01.2021 08:00 AM

The Mayor of Reno Is Betting Big on the Blockchain

Hillary Schieve invests in cryptocurrencies herself, and she sees the technology as a way to improve government services.

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The mayor of Reno, Nevada, has proposed offering an NFT of the Space Whale sculpture near City Hall. Photograph: George Rose/Getty Images

Hillary Schieve, the mayor of Reno, Nevada, takes my arm before we jaywalk across the street from City Hall. She continues clutching it as we traverse the gritty public plaza on the other side, and does not let go until we reach the foot, or rather fin, of our destination: a hulking steel and stained-glass sculpture of a humpback whale nuzzling its calf. Its name is the Space Whale. In 2016 a team led by artist Matt Schultz created it for Burning Man, the annual festival held a few hours north of the city, as a means of drawing awareness to “our hypocrisy toward protecting the oceans,” he tells me later. After the festival, the city leased the sculpture for $64,000.

Up close, the whales are looking a little wan. Most of the reachable panes have been shattered, and the metal skeleton is losing its sheen. Schieve, bundled tightly in a coat, her blond hair whipping in a chilly April wind, reaches toward a shard of glass and sighs. “I’m on the save-the-whale campaign,” she says. This was a controversial statement. The lease on the whale had expired in August 2019. The artists had tried to sell it to the city, which had little interest in the $500,000 price tag, and when the price later came down, the city insisted the artists pay for repairs. Schultz’s group then tried to sell it on Facebook Marketplace for $1 million. No takers. All the while, no one was giving the sculpture any TLC. In Schieve’s office, mention of “the whale” elicits an eye roll. A white whale, beached on the banks of the Truckee River.

But this spring, Schieve (pronounced SHE-vee) devised a potential solution: a non-fungible token, or NFT, offered for sale on a blockchain called Tezos. The new owner would receive a .CAD file and a video from the artist, but the actual, physical sculpture would stay in that downtown Reno plaza. The proceeds would raise funds for the city to clean up the whale and preserve it for the public to enjoy. Schieve realized this type of semi-symbolic sale might require some sweetening. So she was contemplating offering benefits, like tagging along on her annual trip to Burning Man with fellow elected officials. (They don’t stay overnight, Schieve adds; she did not intend to jeopardize any future electoral campaigns with drugs and orgies.)

Hillary Schieve

The issuance of an NFT is not, at this point, such a radical thing, even for a government. Cities and states all over have sought at times to forge links to the blockchain. In 2018, Cleveland declared itself Blockland, though the label seems to have waned. Wyoming has set itself up as the premier regulatory haven for cryptocurrency, a label that other states, including Nevada, now seek to challenge. All it takes is a few interested businesspeople and elected officials receptive to “new ideas,” especially those with a cypherpunk ring. That’s not quite what’s happening in Reno. For Schieve, the NFT was a gateway to something else.

An early sign emerged in January, when Mayor Francis Suarez of Miami, a person on a recent tear of throwing out tech-friendly ideas and seeing what sticks, tweeted about turning his city into a “hub for crypto innovation” centered around Bitcoin. Schieve was unsatisfied. “When are you going to become a $LINK marine?” she teased in reply, cryptically to most readers. She was referring to a blockchain platform called Chainlink, perhaps best known for its cult following of “marines” who swarm toward any mention of the technology on social media. Their loyalty is expressed through ranks earned by #HODLing (that is, holding) the platform’s cryptocurrency, called Link. Apparently, the mayor of Reno was a member of the battalion—“link pilled,” in the community’s parlance. “It was really sweet,” Schieve says of the meme invasion her tweet inspired.

Why had she tweeted about Chainlink, of all things? For one thing, she is an investor. In 2016 she attended a hackathon where an attendee convinced her to start dabbling in Bitcoin. She did, but found the speculation dull; it wasn’t exciting to watch the value of her bitcoin go up and down. So she began researching other blockchains and the problems they sought to solve. One day, she was reading about forms of digital identity—think blockchain-enabled driver’s licenses or vaccine cards—and came across some interesting cryptography that Chainlink was using to keep them secure. The project appeared well respected and had a number of high-profile scientists involved. So she started buying Link, among other so-called altcoins. “I like to invest in things that I believe in,” she says. “I’d never buy Dogecoin.”

Schieve has done well for herself with this approach, though she declines to share how well. Her earnings were enough that her brother-in-law, a longtime cryptocurrency enthusiast, “freaked out” when he saw her quip on Twitter, fearing the attention of thieves and hackers. “My sister saw it and said, ‘Bruce wants to kill you,’” she says. Since then, Schieve’s Twitter account has bounced between the ordinary affairs of running a small city—mental health initiatives, historic preservation, teacher appreciation—and, on occasion, promoting Link.

Schieve’s first question when we sit down in her office is whether I bought into Coinbase’s public debut. I hadn’t. She had, at perhaps too high a price, she admits. Schieve, who is 50 years old, had just arrived from a regional meeting about vaccine distribution and was soon heading out to convince a casino to beautify a sidewalk. The office is buzzing with post-vaccination energy. She comforts a worker who had recently lost his wife to cancer. (Had he read When Bad Things Happen to Good People? She hopes it’s not politically incorrect to suggest a book by a rabbi to a Mormon.) Her assistant is watching her dogs and cats over the weekend. (Had he gotten her Venmo?) The city manager drops by. (He thinks the NFT idea is a little “out there.”)

We sit in plush, studded white chairs on the 15th floor with a corner view of the snow-capped Sierra Nevada. One wall is a chalkboard covered with a to-do list in perfect, looping handwriting that includes items ranging from “Sleepover at City Hall” to “Clean up blighted downtown (paint, etc.).” (The list was written pre-Covid, she clarifies; she was meaning to commission an artist to do something new.) The other wall is covered with a black tapestry bearing a white “R” for Reno in an antique font. It was the product of an effort early in her tenure as mayor, when Schieve had convened a number of “young and cool and hip” local marketing firms to design a city rebrand. When the city council firmly rejected the design proposal, she adopted it as her “mayor’s mark.” The competing brand identity for the city of Reno can now often be seen in the background when she appears as a guest in online cryptocurrency shows.

Headaches of that sort with the council are fairly routine. Schieve had come to lead Reno’s government by an unusual path. She was born and raised in the city, and left to train as an elite figure skater until kidney disease ended her career early. She returned home and opened an online boutique and a line of physical thrift stores, which are today staffed by 27 teenagers. She delights in telling the origin story of her political ambitions, which began with a fight over a $5,000 fee to move a sign at one of the shops. In 2012 she decided to run for city council with a pro-business, nonpartisan stance (all city positions technically are, but candidates usually rely on some form of party backing). Two years later, the theme of her mayoral platform was “reopening the doors of City Hall.” The previous mayor owned casinos, but she wanted to transition Reno away from its gambling dependency. To her, that largely meant attracting tech.

Schieve knew that Reno had the right ingredients: near Lake Tahoe and Silicon Valley but affordable for home buyers, and with lower taxes than California. In recent years the region has had some success in luring startups, as well as more industrial forms of tech like the Tesla Gigafactory and data centers for Google and Apple. During the pandemic, Reno became a destination for remote workers who didn’t want to stray too far from headquarters. Critics have raised concerns about the downsides: rising housing costs and homelessness and the overall Burning Man-ification of a city known for its Old West vibe and gambler grit. But Schieve believed she could tackle those things while packaging the city as more youthful and vibrant.

Is blockchain a ribbon on this packaging? Perhaps. “I’m on the marketing and branding side of things,” Schieve says. That day in April happened to be the final day of a Chainlink-sponsored hackathon, which she had been invited to judge. She gives me a preview of the winning entries: a system for farmers to use carbon credits, and another for demand-based pricing of public transit. They were “cool,” she thought, but clearly in beta. Schieve was familiar by now with this dynamic. She had hoped to use blockchain technology to certify the provenance of the designer handbags she sold, helping to weed out counterfeits, but the options didn’t look viable yet. She considered accepting cryptocurrency for clothes, but her customers didn’t seem all that interested. “It’s all so new,” she says. “Saying it and doing it are two different things.”

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The whale NFT, Schieve hoped, would be different. Public art, and especially Burning Man art, was important to her vision for how the city should look and feel. She liked Tezos for the job, rather than Ethereum, because it uses less energy; she was working with Tezos developers to build a platform for raising funds for municipal art, which she hopes other mayors will adopt. Schieve was feeling optimistic, though the whale sale was uncertain. The precise ownership model—who would have rights to do what with the whale, and who would receive what allocation of the proceeds—was still being worked out. And of course, there was the matter of crashing cryptocurrency prices. Who would want this whale in downtown Reno? “It’s absurdist bragging rights,” says Schultz, the artist, who finds NFTs dismally late-capitalist, but was willing to go along with it.

The project attracted more favorable notice from some, including a 21-year-old undergraduate from the University of Nevada-Reno named Theodore Clapp. He was thrilled, and surprised, to see his mayor “interested in this obscure altcoin that I loved,” he says. He emailed her after seeing a tweet about Tezos, and she responded immediately. He was soon installed as the head of Reno’s Blockchain Board on Innovation (a board of one, for now; he is seeking other members to join him).

Clapp’s current job is to work on a white paper for something called a decentralized autonomous organization, or DAO. He and Schieve envision that city residents will receive cryptocurrency that corresponds to the value of certain city-owned parcels. People could buy and sell their stakes, and if the land were leased or sold, they would all share in the proceeds. This would happen automatically, through smart contracts—blockchain-based programs—that could be altered only by consensus among the shareholders. It was exciting, Schieve thought, because it could help prove out all sorts of applications. Could an unemployment system run by smart contracts be more transparent and fraud-resistant? What about the security of death certificates issued by blockchain?

All of this, including the DAO, is a long way off. When Clapp meets with city officials other than the mayor, the reaction ranges from “cautious and skeptical to very against,” he says. Schieve casts it differently: They’re in the education phase. Yes, crypto is mostly at this point about speculation, and perhaps there is a certain degree of posturing involved. But she remains a believer and hopes she can create more believers. Eventually, she thinks, the technology could help this place she holds dear. “Politicians don't like to be the first out of the gate,” she says. “I'm not afraid of that. Anything that could make your community better is worth trying.”