A bipartisan bill before Colorado lawmakers encourages state agencies to research uses for blockchain technology to potentially reduce costs by eliminating redundancies and preventing fraud.

The bill’s advocates and the state’s blockchain community said it has a greater message: Colorado can be a powerhouse for the burgeoning technology, and the public sector is integral in making that happen.

Sponsored in the senate by Sens. Kent Lambert, R-Colorado Springs, and Angela Williams, D-Denver, Senate Bill 86 is pending review in the appropriations committee after wining initial approval in the business committee in February. If approved by the Senate, it then goes to the House for consideration.

Blockchain, the technology behind bitcoin and other cryptocurrencies, is a decentralized ledger in which the verifiability of each transaction is dependent on the previous one, so the ledgers are virtually unalterable and easy to track.

“I heard from my constituents that they were concerned about the compromising of sensitive information, especially with that whole story about the Russians tapping into our voting information,” Williams said.

High-profile national cybersecurity breaches have gotten local lawmakers’ attention. In September, credit bureau Equifax reported a data breach of 143 million customers’ data. In late February, a ransomware attack hit the Colorado Department of Transportation, causing employee computers to go offline and delays in departmental operations.

Hackers are getting smarter, and their targets need to keep up, said Chad Bacher, senior vice president for product strategy and technology alliances at Webroot, a Broomfield-based cybersecurity firm.

“Breaches are in the news on a regular basis, and companies are really trying to evolve the ways that they protect themselves,” he said. “It’s encouraging to see things like blockchain technology be evaluated, and hopefully good things come of that.”

The blockchain community is willing to help where it can, said Sasha Shtern, a long-time member of the Denver startup community who founded an investor group called Blockchain Angels. Even though blockchain is associated with bitcoin and supporters of a decentralized currency, it has applications in the public sector, he said.

For example, distributed ledger technology could be used in voting systems for Colorado residents serving in the military overseas, or it could provide a public identification key that could be used at any state agency, Shtern said.

The government should reciprocate the blockchain community’s support, he said.

“The bill … has been put forward without any collaboration between the entrepreneurial and tech community,” he said. “Ideally, what … the state legislature could do is create some symbolic gestures that say we’re open to this industry in Colorado.”

The bill represents an inflection point for the blockchain community in Colorado, which could become the “Silicon Valley” of the technology, said Vance Brown, the CEO of the Colorado Springs-based National Cybersecurity Center.

“The systems today are not working,” Brown said. “The NCC is 100 percent behind putting research dollars into blockchain. The decentralization it offers changes the economics of the whole (cyber) war.”

Arren Kimbel-Sannit is a student at the Walter Cronkite School of Journalism and Mass Communication at Arizona State University.



