On June 8, Vermont’s Governor Scott signed a bill mandating a study to explore how blockchain tech will impact the state’s economy.
“The bill approves a study, due be delivered by 30th November, that will include “findings and recommendations on the potential opportunities and risks presented by developments in financial technology” including blockchain.
A Vermont General Assembly conference note from May notes:
- The field of financial technology is rapidly expanding in scope and application.
- These developments present both opportunities and challenges.
- On the opportunity side, Vermont has been a leader in previous innovations in finance in contexts such as captive insurance.
- The existing Vermont legislation on blockchain technology and other aspects of e-finance have given Vermont the potential for leadership in this new era of innovation as well, with the possibility of expanded economic activity in the financial technology sector that would provide opportunities for employment, tax revenues, and other benefits.
Sounds fantastic! But what’s a blockchain?A 2016 “Blockchain Technology Report” prepared by Vermont’s Secretary of State describes it as:
“an electronic ledger of digital records, events, or transactions that are cryptographically hashed, authenticated, and maintained through a “distributed” or “shared” network of participants using a group consensus protocol. Much like a checkbook is a ledger of one’s personal financial transactions, with each entry indicating the details of a particular transaction (withdrawal or deposit, recipient and sender, amount, date, etc.), the blockchain is a complete listing of all transactions, whether financial or otherwise.
However, unlike a checkbook, the blockchain is distributed among thousands of computers or “nodes” with a process for validating transactions that utilize a group consensus protocol. Making an addition to a blockchain ledger requires the approval of the network at large making retrospective changes essentially impossible.”
- Coindesk offers a simpler explanation with images right here.
- Business Insider has a good overview here.
Why is it important?
The market opportunity is huge. Indeed, eventually, the opportunity could be the entire market.
Goldman Sachs says the technology “has the potential to redefine transactions” and can change “everything.”
And investor and Internet pioneer Marc Andreessen says, “The practical consequence […is…] for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”