This article originally appeared on Reno Gazette Journal
The state of Nevada is well-positioned for an entrepreneurial renaissance with the convergence of business-friendly regulators and the emergence of blockchain. Proactive legislation could make the state the first in the West to legally recognize blockchain technology and attract the cover-page-worthy founders of tomorrow.
Made famous as the tech behind Bitcoin, blockchain is widely misunderstood but presents unlimited opportunity. Its impact will compare to that of the internet. Its uses greatly surpass transactional needs and will revolutionize data security.
Take Reno-based startup Filament, an internet-of-things company using blockchain technology to revolutionize the way farmers and miners do business through securitized smart systems.
Blockchain works by recording each transaction on a ledger or “block.” The ledger is shared by a network of computers and each transaction is confirmed by a consensus of the computers. With every new transaction, new data is created in these blocks, linked to preceding blocks creating “chains,” hence, “block-chain”.
No individual is capable of tampering with these sets of data because of the mathematically backed code driving verifications by a network of computers. Powerful encryption technology protects the network. Blockchain is now the most efficient, secure, reliable ledger in the world.
The capacity of this technology rules conversations among tech nerds and economists. This week, IBM announced its new cloud blockchain security service and last month the World Economic Forum named blockchain one of the “Top 10 Emerging Technologies of 2016.”
The internet revolutionized the world, yet one critical area was largely left untouched. How we transact still begs to be modernized. Escrow takes weeks to close, stocks take days to sell and wire transfers take hours. Blockchain will potentially reduce these transactions to seconds and eliminates the need for costly middlemen.
Blockchain’s secret sauce is its capacity to replace humans in transactions. Our current systematic distrust of financial entities is conditioned by a process requiring humans which are, by nature, slow, inefficient, mistake-prone, and sometimes untrustworthy. By contrast, blockchain is lightning fast, efficient, mistake-free, and inherently trustworthy. Blockchain may someday take the place of today’s banks and clearing houses and will be vastly more cost-effective. It ushers in an era of instant financial transactions, property escrow closings in as little as a day, smart contracts, and the elimination of transaction fees as we know them. Tomorrow, we will verify records, identity, authenticity, rights, titles, and contracts with the rapid ease of a Google search. It is within this record-keeping recognition that Nevada could get a leg up on the block chain business.
“With Nevada’s don’t-fence-me-in mentality and pro-business policy, the state is uniquely positioned to create policies that foster such innovation,” said Nevada State Senator Ben Kieckhefer.
A race of states looking to attract and support startups looking to go there may already be underway. Delaware, Nevada’s top competitor in business-friendly policy, is already looking to transfer its systems to blockchain to streamline its processes. Kieckhefer is leading a small group of Nevada lawmakers discussing the issue.
Dusty Wunderlich is CEO of Bristlecone Holdings.