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SSome of the key advocates of the Vermont blockchain law passed the last session, creating a favorable regulatory environment for blockchain-based businesses, have initiated a trade association to better position the state as friendly towards emerging technology.
A group called the Vermont Distributed Ledger Governance Association, or DLGA, announced Monday that they had trained in Burlington to help promote industry and develop best practices.
The entrepreneur John Burton, president of the board of directors of the DLGA, said that the group is modeled freely by the Captive Insurance Association, which helped to position Vermont as a popular site for captive insurance policies, employing about 500 people in Vermont.
"It can help us all in Vermont," said Burton from the blockchain industry, which mainly creates software. "All we can do to put the state on the map for something besides maple syrup and skiing is fantastic."
Blockchain is better known as the technology behind cryptocurrencies like bitcoin. But more generally it is a decentralized record keeping system used by companies around the world, from banks to insurance companies, media distribution and supply chain monitoring.
Through the system, transactions and data are recorded in a chain of "blocks" through a computer network, with many computers distributed to verify that the data to be recorded are unchanged. The distributed "register" of transactions is often public and protected using cryptography. Because of its decentralized nature, experts say that information on these registers is difficult – if not impossible – to modify or modify, unlike records stored in a single database.
This year, the San Francisco-based company Propy set up pilot projects in South Burlington and Hubbardton to test the blockchain as a means of recording real estate transactions, Burton said. Propy is a website and an app that allows real estate investors to buy property anywhere in the world using any currency, including bitcoins, and then to record transactions remotely via blockchain, according to the company's website.
Propy chose Vermont as a place to test its technology because the state has responsive government officials and favorable laws, said Burton. He said the company is piloting its technology in Burlington.
"It's highly reliable, easy and cheap," Burton said. "This is an example of an industry that is starting to use Vermont as a way to test it in nature, we are willing, we are interested, we are innovative, and the laws are tending in their favor."
Burton was referring to the legislation that the government Phil Scott signed into law at the start of this year which aims to make Vermont a benchmark for blockchain technology and companies that want to use it. The law, which came into force in July, creates a new type of business entity, "limited liability company based on blockchain", for entrepreneurs and companies who want to set priorities and create customized governance structures tailored to technology.
Burton said it is not yet clear how many blockchain companies operate in Vermont. This is one of the things he is trying to find out while the association is establishing itself.
The association is working closely with state officials, Burton said. Also on Monday, the attorney general's office in Vermont announced that four state agencies set up a working group to study the opportunities of the blockchain. The group includes the office of the AG, the office of the secretary of state, the department of financial regulation and the agency of trade and community development.
Other states, including Wyoming and Arizona, have recently passed laws to carve out a legal framework for blockchain technology.
Burton recently sold the technology business he had operated for 30 years at South Burlington, NPI Technology Management, and is currently dedicating his retreat to Vermont's promotion to block companies.
"These are clean and well-paid jobs, and we need more people and more jobs," he said. "It fits perfectly with Vermont's weak point in terms of job growth, captive insurance has done the same thing, and it's huge."
