The State of Blockchain: Rhode Island as a U.S. Blockchain Capital
Crypto vs. Blockchain
Cryptocurrency is a store of value and a peer-to-peer monetary system used between two parties to transact goods and services without needing a “middle man” (i.e., governments, retail/investment banks, and central banks). The most famous examples of cryptocurrency are Bitcoin (store of value), Ethereum (smart contracts and Decentralized Finance), USD Coin (a stablecoin that is pegged 1 to 1 to the USD dollar), and Dogecoin (a meme coin). Blockchain is the distributed ledger technology that cryptocurrencies run on. Blockchains can be centralized or decentralized. An example of a centralized blockchain is Central Bank Digital Currencies, which can be controlled (turned on and off) by a single entity. Decentralized blockchains are ones that no single entity can control but are controlled by nodes distributed to various computers. These nodes run on a consensus mechanism in which 51% of nodes have to agree that a transaction has taken place. To date, Bitcoin, along with other cryptocurrencies, has been, and still is, the most successful use case for blockchain technology. In this article, we will explore how Rhode Island is adapting to the growing influence of cryptocurrency in our everyday lives while also becoming an emerging tech hub for expanding use cases of blockchain technology.
X Corp. and Rhode Island
As X (formerly Twitter) is growing and expanding its services, it will integrate cryptocurrencies as a payment method. Rhode Island made international news when its Department of Business Regulation gave X a license to both be a custodian for and transmit cryptocurrency on its platform. Interestingly, Rhode Island not only has the laws already in place to be able to grant these licenses, but is also currently developing a regulator sandbox to attract even more major heavyweights in both the crypto and blockchain spaces.
Crypto Law in Rhode Island
John Deaton, a cryptocurrency lawyer who is a frequent commentator on Fox Business and CNBC, along with many other outlets, on XRP and other cryptocurrencies, is based in Providence, Rhode Island. John Deaton is also the founder of Crypto-Law.us, a website that describes itself as providing “U.S. and Legal Regulatory News for Digital Asset Holders.” He is considered one of the leading legal voices in the general cryptocurrency space, so having him based in and practicing law in Rhode Island is a major asset for the state.
When I had our first conversation with the director of Business Regulation for the state of Rhode Island, now Secretary of Commerce of RI, Secretary Elizabeth Tanner, she explained to me that she had traveled to Estonia and became a digital citizen. She explained that in Estonia, everything from their version of social security numbers, birth certificates, and other important information is placed on the country’s “distributed ledger” system on behalf of its citizens. She went on to state that “Rhode Island will be the first state to have a digital identity.” In 2022, Rhode Island launched its first blockchain-based pilot program for Certified Public Accountants, and in 2023 launched a similar pilot program for Business Registration records. At this rate, within a decade, Rhode Island’s ambitious goals will become a reality.
Rhode Island Blockchain Council
In 2023, this author founded the Rhode Island Blockchain Council. At the event launch, Vice President of Business Development for Rhode Island Commerce Siu-Li Khoe gave opening remarks on Rhode Island’s projects at the state level. Other speakers in attendance included Head of America’s Future Northeast Hub (title sponsor) Larry Gillheeney, New York marketing executive Jude Somefun, San Francisco private equity and venture capital professional Alexandra Black. RIBC keynote speaker of the night is world-renowned crypto strategist and former speaker at the World Blockchain Forum – Dubai, Oz Sultan. Others in attendance included state representative David Place, who is considered to be one of the leading policymakers in the state general assembly advocating for crypto-friendly and blockchain-friendly policies, and local entrepreneur in residence and Tedx Providence speaker, Claude Arnell Millhouse.
There are companies with headquarters in Rhode Island that are expanding the use cases for blockchain in exciting ways. DIMO allows individuals to use an app to “mine crypto while you drive” RocksWellTech (based in Cranston, Rhode Island) is currently running the biggest crypto mining pool in the northeast while working with other crypto startups in search of ways to expand its services in the DeFi space.
Pernimed: Have you ever been to an emergency room and had to fill out cumbersome forms when you just wanted to get better? Imagine going to new doctors and specialists and having to do the same. Pernimed is working with Brown University and the state of Rhode Island to launch a pilot program leveraging the blockchain that will give state residents 24/7 access to their healthcare records. What’s even better is that Pernimed will also be offering residents the ability to monetize their records (in a HIPPA-compliant manner, of course)!
Rhode Island has a lower living cost than New York City and Boston, which are two of the nation’s leading tech hubs. Rhode Island is strategically a one-hour drive south of Boston and three hours north of New York City. Providence, Rhode Island’s airport, T.F. Green Airport, is considered to be one of the best airports in the world. Not only is Rhode Island within a 100 miles radius of Massachusetts Institute of Technology, Harvard University and Yale University; but both Brown University and Rhode Island School of Design are based in Providence! Alongside a vast talent pool, Providence launched CIC Providence on October 4th, 2019. CIC is “Rhode Island’s Silicon Valley,” complete with conference rooms, dedicated desks, office spaces, an innovation space, and a free incubator program that provides incubation space and a mentorship program! Little Rhody is the smallest geographic state in the nation and the second most dense which makes it perfect for launching statewide pilot programs.
This post does not serve as financial advice.