Officials from the Vermont House of Representatives are testing a bill that could prepare organizations and different state associations to use blockchain innovation. Blockchain is widely known as the hidden innovation of cryptographic forms of money, for example, Bitcoin.
But technology experts and politicians see the opportunity to apply blockchain to a variety of other industries. They also recognize a possible opening in Vermont to boost economic development by making it easier for companies to take advantage of technology.
Blockchain is a record keeping system through which transactions and data are recorded in a chain of “blocks” through a network of computers. The distributed “ledger” of transactions is often public and secured with cryptography.
Through the system, many computers or nodes must work to verify that the data being recorded has not been modified. And because of its decentralized nature, experts say that the information in these books is difficult or impossible to hack or change, unlike the records kept in a single database.
“Everything that really is a chain of blocks is a decent method to follow,” said Professor Oliver Goodenough, co-executive of the Center for Legal Innovation at the Vermont Law School.
The blockchain advance in Vermont
The Center for Legal Innovation came to the fore in a December 2017 report that prescribed the Legislature’s demonstration to drive blockchain advancement and technology innovation with money in Vermont.
A bill passed by the Senate last month, S.269, resumes that position and is now being expanded in the Economic Development Committee of the House of Representatives. Senator Alison Clarkson, D-Windsor, her sponsor, noted that Vermont’s thriving captive insurance industry also provides inspiration for the bill.
For a considerable period of time, Vermont has attempted to pass laws and controls that allow for asset insurance agencies to establish and conduct business in Vermont. This year, Governor Phil Scott authorized the most recent enactment to develop the business.
Captive insurers, also known as “captives,” are small insurance companies created and owned by large companies. As of this year, there are more than 1,100 of them in the state.
“The monetary achievement of captive protection makes each and every one of us have to see financial progress as an open door for Vermont,” Clarkson said at a meeting a week ago.
“These are other areas where Vermonters can really win huge salaries by doing exciting and cutting-edge things,” he said, “and making Vermont one of the innovative centers for business technologies.”
Accountability companies based on blockchain
The S.269 draft of the House of Representatives committee would allow companies that use blockchain technology “for an important part of their commercial activities” to form limited liability companies based on blockchain.
“The suggestion was: what if we have a structure that would be accessible to perceive and give a legitimate regularization to block chain structures,” Goodenough said of the agreement. “The expectation would be that by doing that, we would become an attractive place for Blockchain,” he said. “In addition, that would encourage the national business and urge others to come to us.”
The bill initially introduced in the Senate would have simply allowed digital currency organizations to shape specific restricted risk organizations. The cryptocurrencies are mostly in view of blockchain innovation to confirm their exchanges.
But seeing that Blockchain has a much wider range of possible applications, lawmakers decided to extend the LLC provision.
As drafted, the bill would also instruct the Department of Financial Regulation to study how technology could be used in the banking and insurance industries and consider “any necessary regulatory changes in Vermont.”
Companies around the world are working with blockchain to do things such as the automation of real estate contracts and the tracking of global food supply chains.
Blockchain helps municipal governments
In addition, Blockchain has effectively discovered how to help in one of Vermont’s civilian governments.
In January, Propy Inc., a blockchain startup located in Palo Alto, California, collaborated with the City Clerk’s Office of the City of South Burlington in an experimental execution program to get property exchanges using blockchain innovation.
Vermont passed a law in 2016 that made blockchain registrations acceptable in the courts. The executive of the House Economic Development Committee, Bill Botzow, D-Pownal, said on Thursday that the S.269 draft of the board is not an unchanging reality.
By continuing to work on the proposal for this session, Botzow said the panel will balance the interests of economic development with consumer protection. There are still questions to consider about the potential risks related to technology, he said.