Gov. Jack Markell unveiled an initiative Monday that will create a regulatory framework in Delaware for the technology that made bitcoin possible.
The idea is to make the state a friendly place for businesses using blockchain and smart contract technology and keep the First State on pace with technology already being used in the marketplace.
Large companies want blockchain technology like a distributed ledger because it makes business more efficient, according to Delaware Deputy Secretary of State Rick Geisenberger.
“Imagine a world where there’s a transaction. Multiple people participate in the transaction. And each participant in the transaction is keeping a copy of the ledger of that transaction. And that’s essentially all a distributed ledger is,” Geisenberger said.
Each of these transactions is being recorded so you see a chain of transactions. Hence, a block ”chain.” And this potentially makes business more secure because the ledger doesn’t exist just in one place, it exists in multiple places.
"And some people have argued that it’s a huge security protection," Geisenberger said.
That’s because you’d have to change everyone’s ledger if you wanted to somehow cheat on that ledger.
Another component of this blockchain technology that companies want to use is called smart contracts. These smart contracts streamline labor intensive transactions by making them automatic and instantaneous.
"A lot of this stuff can be pre-programmed into the contract. And if there’s an amendment to the contract you can program what the system should do and to the extent that you can do that, you take out a lot of the manual back office processes,” according to Geisenberger.
The governor’s new “Blockchain Initiative” will create the regulatory framework to ensure these types of distributed ledgers and smart contracts are legal in the state of Delaware, ensuring its reputation for making business easy and efficient in the state.
The initiative also outlines a plan to attract blockchain technology developers to the state. A company called Smart Loans is already relocating several people to Delaware in the next few months from North Carolina.
Markell appointed Andrea Tinianow to oversee these tech companies’ transition to Delaware.
Disclosure: Tinianow also sits on the board of directors for Delaware Public Media.
