Vermont Says Blockchain Record-Keeping System Too Costly
The cost of using an implementation of the blockchain for a public records management system would outweigh any potential benefits, a report prepared for Vermont’s state legislature concludes.
The report, commissioned as part of a broader legislative effort aimed at promoting economic growth, was prepared by Vermont's Secretary of State, Attorney General, and the Department of Financial Regulation. Representatives from the Center for Legal Innovation at Vermont Law School and the Uniform Law Commission also contributed to the report, which was delivered to the legislature on 15th January.
The report’s authors state that Vermont could see some benefits from a system that is able to verify when a public record document is entered and by whom. However, the report raises questions about the cost of operating a state blockchain, how such a system would function within Vermont's legal framework for storing electronics records, and why a blockchain would be needed at all given the methods and requirements in place today.
The report’s authors state:
“In light of the very limited possible benefits and the likely significant costs for either entering into a private or public blockchain or setting up a state-operated blockchain, at this time, blockchain technology would be of limited value in conducting state business.”
Despite arguing against the creation of a blockchain-based public records system, the authors do note that it would offer some protection against forged or erroneous records.
“The hash of a document existing outside the blockchain and the hash registered within the blockchain will be identical if the documents are identical. If the documents are different (due to forgery, corruption, error, or other problems) the hashes will not match,” the report states. “Thus, the blockchain can potentially provide an immutable registration of a record, to which future records can be compared for authenticity.
The report goes on to suggest that Vermont could see some economic benefit from attracting companies that use the technology.
“To the extent that Vermont can be part of a process of economic and technological innovation that is likely to go forward with or without any legislative recognition, early acceptance of this technology may result in some economic benefit to the State,” the report explains.
The report also left the door open to future consideration of a state-run blockchain system, suggesting that a future implementation could be used to augment existing methods of public record keeping.
“Further study is required before considering it for the regular business of the State, and moreover, any application would certainly need to support rather than replace the existing records management infrastructure,” the report concludes.
The full report can be found below:
Image via Shutterstock
Bitcoin Startup Joins Baidu-Backed FinTech Accelerator
Former Deutsche Bank Director Joins Blockchain Firm...