The state has passed more than a dozen pieces of legislation, creating an unprecedented legal foundation for blockchain business in the United States. Stakeholders sense that much more is on the horizon.
Wyoming is known for cowboys, rugged landscapes and a robust mineral-extraction industry. It's also taking deliberate steps to position itself as the blockchain capital of the nation.
The state has passed more than a dozen blockchain-related bills, and more laws have been proposed, illustrating the growing impact of Wyoming’s Blockchain Task Force. Already, Teton County has put all of the land records that it can on a blockchain. And last month, the state hosted its second annual blockchain hackathon, which featured prominent tech figure Jesse Powell, founder of Kraken, as a speaker and offered about $200,000 in prizes, making it “one of the richest hackathons on the planet,” according to event producer Rich Kopcho.
The blockchain world has its eyes firmly on Wyoming. It’s all part of a plan. Rep. Tyler Lindholm, house majority whip of the Wyoming Legislature, exudes confidence about his state’s legislative approach to blockchain.
“You don’t have to adopt our laws verbatim, but you should at least be looking at the situation and realizing that technology is moving much faster than government, which is normal,” Lindholm said. “So we’re playing a catch-up game right now, and without legal clarity or legal precedence, your companies will exit your state. And it’ll be my goal to take them away from these other governments.”
Lindholm’s argument is simple. “Any concentration” on passing bills to regulate or institute blockchain for transparency, auditing and other things in government is a “foolish endeavor.” Instead, legislators should focus on making a regulatory climate that accommodates blockchain businesses.
“There’s multiple states out there that have ran legislation to put drivers' licenses on blockchain, those types of things, which I think is a great use case,” Lindholm said. “But that’s kind of putting the cart before the horse. You need the industry in your state that is going to be interested in helping you with those things. Because, let’s be real, industry experts are not looking for opportunities to leave their $200,000-a-year job to go work for $70,000 for a state government so they can implement blockchain, right? They don’t want to do that.”
Lindholm’s philosophy is inspired by the example of Delaware. Notwithstanding its low population (fewer than 1 million people) and “less attractive” tax environment, Delaware rakes in about $1 billion annually through business registrations, and more than 60 percent of Fortune 500 companies are registered in Delaware.
But why? Lindholm said it’s all about legal certainty. Delaware has a chancery court and dozens of years of legal precedence, which provides a lot of clarity for businesses that want to minimize legal risk. Caitlin Long, a member of Wyoming’s Blockchain Task Force, told CoinSpice that it’s “very clear” that many people don’t understand what her state has done for the blockchain industry.
“I thought it was important that we stand up and define what the rights and obligations of parties in these transactions are from a legal perspective, so that if there is a dispute, a judge knows exactly how to handle it," Long said to CoinSpice. "And also, perhaps more importantly for the development of the industry, if these assets are going to be used in financial services such as collateral for a loan … then how do you know legally what the rights and obligations in a loan of a crypto-asset are? And the only state that has defined that is Wyoming.”
In an interview with Government Technology, Long said Wyoming saw an uptick of business registrations in the wake of its legislative approach to blockchain. An exact number of registered blockchain businesses cannot be determined because the state does not require business registrants to cite their industry, but the impact of the laws is clear.
One compelling example of Wyoming’s legal focus is a proposed bill that defines code as free speech. Specifically, this law would ensure that software developers can avoid legal trouble if someone takes their code and uses it to perform illegal activities.
“[M]ost developers in open-source projects use an avatar or a pseudonym to conceal their identity for precisely this reason: They don’t want to get sued, and especially criminally sued just for having written a line of code that someone else someday might misuse,” Long said.
For all of Wyoming’s business and legal talk, the state and its players are not completely divorced from practical solutions based on blockchain. Indeed, blockchain’s potential use in government is what attracted Long in the first place. For more than 20 years, Long was on Wall Street, which, she argues, lacks “true honesty” in its ledgers. She eventually worked with the Delaware Blockchain Initiative to try to solve this type of issue.
“Wall Street’s bookkeeping systems are not accurate, and it results in overissue of securities, and that is a form of theft, in my mind,” Long said.
Then there’s the case of Teton County and its land-record blockchain. The blockchain was created by Medici Land Governance. Lindholm said this project stemmed from a conversation during a Blockchain Task Force meeting, when companies became curious about what they could do for government use cases. Medici Land Governance and Teton County Clerk Sherry Daigle connected, and the county didn’t pay a dime for the blockchain, Daigle said.
Daigle has held her position for more than 20 years. She explained that during the 1994-1996 period, her office started handling land records differently. The office began assigning a unique 14-digit number to every parcel of land. Any transaction related to a specific parcel — whether a deed, a mortgage, or something else — was then linked to the parcel based on the 14-digit number.
Now, all of those records are on the blockchain, which was established in June. Since that time, Daigle said her office has added more than 900 records to the chain. On the Teton County website, one can view parts of the blockchain by exploring the “Scanned Documents” section of the site or by clicking on parcels of land on the site’s GIS ownership maps.
Daigle said there are limitations to this blockchain. As of now, the county office can’t transfer ownership or perform financial transactions on the blockchain. It’s also unclear how land records that precede the 1994-1996 period can be added to the chain, given that those historical transactions lack the unique assigned numbers for the parcels. But Daigle believes it’s a successful project on the whole and that other Wyoming counties, once they advance their technological capabilities and electronic records, may follow suit.
For Lindholm, the relationship between Wyoming and blockchain has “somewhat evolved” from the initial business-centric stance. He saw the fruits of this evolution when he watched kids compete at the blockchain hackathon last month at the University of Wyoming. He thinks things could get wild from here.
“I hope it gets crazy in Wyoming, you know?” Lindholm said. “The fact that we’ve got these 12-year-olds that are debating Cardano’s infrastructure with the owner of Cardano, and these kids are from Shoshoni, Wyoming ... I mean it’s 700 people, you know it’s an old cow town that’s … the sidewalks are rolling up on it.”