LARAMIE – The state’s Blockchain Task Force will meet in Laramie on Sept. 19-20 to discuss potential legislation that could further shape Wyoming’s landmark blockchain laws. If enacted, the laws under consideration could change the landscape for real estate, banking and energy, among other industries.
The premier legislation stemming from the task force passed in the 2019 legislative session, allowing the establishment of banks that could take custody of cryptocurrency assets much like a digital safety deposit box. This year, the task force is looking at refining that measure while banks ogle the state, but also at other forward-thinking measures that member Caitlin Long said could reshape several industries.
“I think over the next decade or two, a lot of traditional assets will be issued in blockchain form,” Long said.
Long is a former University of Wyoming graduate who dove into the blockchain world through her business in New York. When she tried to donate “substantially more than $50,000” in bitcoin to the University of Wyoming Foundation, she discovered that no business in Wyoming could liquidate the bitcoin.
Perhaps more importantly, it started Long on her quest to make blockchain technology more mainstream in Wyoming, which coincided with state’s goals of attracting new industries to the state as the energy markets falter. It turned out to be a perfect storm, and rafts of “phonebook-thick” legislation have made Wyoming one of the friendliest states for cryptocurrency companies.
Bitcoin and other competing cryptocurrencies operate on blockchain technology. In fact, bitcoin was the first real application of blockchain technology, said David Pope, a certified public accountant in Cheyenne who acts as executive director for the Wyoming Blockchain Coalition.
“I’m concerned with the change it will bring to government, accounting, businesses and the way all of us interact on a financial level,” Pope said in a 2017 interview. “It will change; it’s a matter of whether or not we’re on board with it.”
Blockchain technologies, Pope explained, use the power of a network to make a ledger more secure. In a traditional database for accounting or anything else, a single server holds the master copy of data, which can then be accessed from authorized computers. The result is that if the server is hacked or one employee is too loose with login info, you have an Equifax breach on your hands. Or an Anthem. Or a Target.
But with blockchain technology, every computer, or node, that has a blockchain on it houses the entire database. The safety comes in numbers. Instead of any executive decision making vast changes to the database on demand, it takes majority approval of 51% from all computers on the chain.
“You have to attack all the computers at once” to hack into a blockchain, Pope said.
While crypto heists have occurred to the tune of $731 million in January through July 2018 alone, proponents still argue it’s the safest way to store digital assets. Opponents of the technology say the digitization opens the door for more sophisticated hackers where more is at stake.
But Wyoming’s Blockchain Task Force and Legislature have opened the door to the technology, for better or worse, already attracting companies like Cardano – founded by the former co-founder of Ethereum – and others.
With that backdrop, the task force is pushing toward its next forward-thinking motion to tokenize assets like real estate and mineral rights. Tokens are a digital placeholder for real-world value. Wyoming firms are already chasing tokenization to do things like booking a vacation rental, where the token on the blockchain represents the stay at an Airbnb-style vacation rental.
Long said the measure that would replace real estate deeds with digital representation tokens is more of a conversation behind the scenes at this point, but could fundamentally change the game.
“I’m not sure we’ll pass that,” she said, indicating forward motion toward an end goal while taking all the time needed to make it right and ready. “We’re not rushing these through.”
Currently, Teton County is part of a pilot project with a subsidiary of Overstock.com to make it the first county in the country “to record land information (including warranty deeds, mortgages, release of liens and other similar documents), on a blockchain-based platform.”
“This … assures immutability of records and indicates a clear chain of title,” said Ali El Husseini, the CEO of Medici Land Governance. “This provides an additional critical layer of protection and facilitates transparency for title holders in any property transaction in Teton County.”
The pilot project, Long said, will expand to other counties soon, and the potential legislation would allow those tokens to be traded as assets, rather than connecting them to paper deeds.
“It will allow assets to be more liquid and easy to sell by the token representing the asset,” Long said.
From there, she said Sen. Ogden Driskill, R-Devils Tower, wants to expand into mineral rights tokenization.
“Mineral rights are very difficult to keep track of in paper form,” she said, pointing out that vast paper records are hard to search.
But some wonder if the simple digitization would do the trick as well as blockchain technology. Long said various faults in the proposed tokenization law have come forward, leading her to believe it only has a 50-50 shot of leaving the task force alive this go-round.