The lowest floor of the Emirates Towers in Dubai houses the government's Future Foundation, which is sucking in innovative companies from around the world for a stint in the city's $300 million accelerator program. On a visit last summer, there was a company building a health scanner that looks like a phone booth, and plants grown on mist without soil. And, next to those, was a company called ConSensys that doesn't look particularly futuristic. It looks like a group of software developers working at their computers.

The iconic Emirates Towers in Dubai, United Arab Emirates. Getty Images

But ConSensys — a New York-based blockchain software company —is one of a growing wave of companies lured to Dubai to help build out the one of the world's most powerful new technologies: blockchain. Amid aggressive competition from other cities, Dubai is turning into a center of blockchain development. Reid Hoffman, founder of LinkedIn, says blockchain could be as earth-changing as the Internet, as it reshapes the way people transact with each other. The brainchild is Dubai's Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum who wants all government documentation —such as visa applications, bill payments and license renewals — to be transacted digitally using blockchain by 2020. As a result, businesses are adapting fast, and many start-ups and big companies are shifting to accommodate the government, or relocating to Dubai.

Dubai Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum (center), attends presentation and first flight of the Volocopter 2X used as Autonomous Air Taxi, in Dubai, United Arab Emirates, on September 25, 2017. Balkis Press | Sipa USA | Sipa | AP Images

It's attracting involvement from companies including IBM, Cisco and SAP and a dozen or more others who are part of a Global Blockchain Council or are working on blockchain applications in Dubai. Dubai is already home to a bitcoin exchange, BitOasis, and other start-ups and accelerators devoted to blockchain are springing up, as well. More from Global Investing Hot Spots:

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Blockchain is attractive, Chinese investor says Dubai is parlaying its position as a global trade crossroads and its government's $4 billion-plus annual spending on innovation in general into a leadership position. "Dubai has wagered on their position in trade, as a global crossroads," said Marie Wieck, general manager of IBM Blockchain, who leads a team of 1,500 around the world focused on the technology. She was in the Emirate in October at a blockchain event attended by hundreds of people working on blockchain applications. "Based on where their economy is, it is really just a natural that they would be betting on blockchain."

An Emirate in transformation

A blockchain is a network that combines a ledger with the digital item being transacted, permanently, in a way that can't be changed. In a paper world, a ledger entry is separate from a transaction. In a blockchain, the digital item being transacted, like an electronic unit of currency or an electronic copy of a deed, contains its own ledger of transactions. The first application of blockchain has been in the development of cryptocurrencies like Bitcoin. (Dubai is also home to an early bitcoin application company called BitOasis). ICOs – independent coin offerings – allow investors to bet on which cryptocurrencies will stand the test of time. Many of them are taking place in Zurich, and other places without stiff investor protection laws. The explosion of cryptocurrencies and fluctuations in their value led JP Morgan CEO Jamie Dimon to warn investors against them – and has led to talk of a speculative bubble in the area.

Based on where their economy is, it is really just a natural that they would be betting on blockchain. Marie Wieck General manager of IBM Blockchain

The bigger revolution is going on outside the headlines, in the development of other new applications on top of blockchain technology. Worldwide, blockchain seems likely to destroy millions of jobs in record-keeping and transactions, like those in the back ends of banks. What form the replacements for those jobs take and where they will land is an open question – and Dubai wants to snag as many of them as it can.

"While many other governments are writing white papers and conducting small scale tests, the government of Dubai is already developing major services across its entire portfolio," said Noah Raford, the Future Foundation's COO. Blockchain isn't Dubai's only front in what its Future Foundation CEO last year called "an economic war" to lead innovation in the global economy. For instance, the Emirate recently named a minister of artificial intelligence. Dubai's Future Foundation, a government agency, last spring said it had $300 million to invest in innovative companies. After they come to Dubai for a stint in that space at the bottom of Emirates Towers, they often relocate or leave a branch there.

Global competition heats up

Other cities and small countries are emerging as hubs, too. London, for instance, is already renowned as a center for fintech. Estonia, a tiny country that declared Internet access a basic human right in 2000, is a leader in blockchain applications. Singapore's central bank announced last March that it has completed a trial of using blockchain to power all domestic inter-bank payments, noted Christopher M. Schroeder, global venture investor and author of Startup Rising: The Entrepreneurial Revolution Remaking the Middle East. "When governments actively welcome new technologies they also signal to the rising entrepreneurial ecosystems 'Here is a place you are welcomed to innovate,'" he said.

Alexander Demianchuk | TASS | Getty Images

He added that though there will be jobs "shift" because of blockchain, many of the skills of the old world are just as desired in the new one. "For example, if one could hire the following candidate for the 21st century we would in a heartbeat: Meticulous; great at math; great at analysis; utterly trustworthy; superb at customer service; very comfortable in computing," he said. "I just described a bank teller."

Dubai at the crossroads

Dubai stands out for two reasons: the breadth of the applications that may develop in a global trade hub, and the government's commitment. Dubai has the world's busiest airport and is a gateway to growth markets in Southeast Asia and Africa. When 1776, a Washington, D.C.-based incubator, decided to host a blockchain start-up competition, it did so in its branch located in Dubai, said Brandon Pollak, co-founder and head of global affairs. "They take a broad lens to the opportunities; they are not just focused on payments," he said. "They are bringing real estate, health care and financial services into the picture, for example." Wieck pointed to some of the areas that are ripe for innovation, including cross-border payments and settlements, trade requirements and visas. But the applications are much broader. For instance, she said, a blockchain built to keep track of food could revolutionize food safety systems– you'd have a perfect record of whether the "chain of cold" was ever broken. In the medical sphere, you'd know how long an organ for transplant was in transport. A blockchain developed for gems could make it harder to finance a conflict with blood diamonds. Companies from IBM to Emirates Airline to Careem, a tech unicorn, are launching blockchain experiments in Dubai. Careem, which is sometimes called the Uber of the Middle East, is writing a blockchain application that will allow riders to use Emirates Airline miles to buy rides.

Businessman walk past an Emirates Airbus A380 during the Dubai Airshow on November 18, 2013 in Dubai, United Arab Emirates. Christopher Furlong | Getty Images

IBM and ConSensys, a 200-employee company that builds applications based on a blockchain technology called Ethereum, have both been named advisors to the government's effort. IBM just opened a garage — a start-up space — in Dubai to encourage smaller companies to use IBM hardware and cloud services to experiment with blockchain applications. Across Dubai, there are dozens of other start-ups experimenting in the area. Com Mirza, a Dubai-based serial entrepreneur, said he plans to open a "Dubai block chain city," an accelerator space he hopes will house dozens of start-ups. He also launched Habibi Coin, one of dozens or hundreds of cryptocurrencies springing up worldwide.

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