LONDON - (Bywire News) Block.one has moved geographically closer to US policy makers in what could be a bid to foster blockchain-building relationships with the US government.

The EOS creator’s new US headquarters in Arlington, Virginia, is certainly a step towards building Block.one and the EOSIO blockchain’s profile further in the US. Whether the US government will choose to use the EOSIO Public Blockchain, or a sidechain, or even blockchain to any degree, is of course completely unknown at this time, however it does seem plausible, if not likely.

As it stands a number of blockchain protocols, like EOSIO, Ethereum, Hyperledger and others, are developing at a pace where soon, they may be considered for government and military applications.

Blockchains must prove themselves and their decentralized ethos

Any public blockchain protocol will have to prove its system of governance, transaction speeds, scalability and security to be given consideration for high-profile usage. Blockchain’s decentralized ethos, where governance can sit with token holders and block producers will be questioned when it comes to government project considerations.

For EOSIO concerns that Block Producers are based disproportionately away from Western countries, centralised in Asia and that some parties may have been involved in buying EOS voting power from token holders to influence the network may need to be overcome.

Dan Larimer recently said on Twitter to this point:

“Today Brendan and I came up with an amazing solution to vote buying that will completely remove the incentive to buy votes. #eos governance will be decentralized, resources will be cheaper, and incentives will be aligned! More to come!”

However, governance concerns are abated by the probability of government developers using a private EOSIO blockchain development rather than a publicly governed chain. EOSIO software, for example, could be used by developers in the construction of private, and even centrally controlled, blockchain networks. Private blockchain networks can be developed with the same software, but with bespoke governance systems and do not have to follow the design of a public blockchain.

The EOSIO blockchain has had some US political connections in the past. Block.one was once connected with Brock Pierce, who in turn had previous connections with ex-Donald Trump advisor Steve Bannon, but those connections were severed some time ago and are thought to have been impartial.

EOSIO has a number of key strengths that could be considered favourably, including potentially higher transaction speeds, ability to scale, lower costs for users and greater compatibility for traditional developers. With EOSIO, programming in popular languages like C++, TypeScript, Rust and Java are enabled.

A fourth location for EOSIO development, third in the US

The new Arlington, Virginia, site will be Block.one’s fourth worldwide. It could create 170 jobs over the next three years and the EOS company is expected to invest around $10 million into the area. Local Virginia Governor Ralph Northam says Block.one is eligible for a Major Business Facility Job Tax Credit and a grant of $600,000 from the Commonwealth Opportunity Fund has also been approved. Block.one CEO Brendan Blumer said of the new site development:

“Its proximity to the nation’s capital positions us close to the policy innovation around digital assets and distributed ledger technology in the U.S. This expansion opens up important new avenues of talent expansions for us at a time when there is rapidly increasing demand for blockchain-based technologies.”

Block.one already has a Virginia site at Blacksburg, employing 80, where CTO and co-founder Dan Larimer is based. It has other sites in Los Angeles and Hong Kong but is registered as a company in the Cayman Islands. Block.one raised $4.1 billion from its ICO token sale between June 2017/18.

US government blockchain spending will increase

The US federal government spent around $10 million on blockchain in 2017, a figure that’s expected to rise to $123.5 million by 2022, according to an IDC Government Insights report published in April 2018. US state and local governments are expected to raise a 2017 spend of $4.4 million to $48.2 million by 2022. Federal civilian agency investment in expected to hike from $20 million to $80 million over the same period.

Blockchain initiatives are already present in various stages of development in the US Food and Drug Administration (FDA), the Department of Health and Human Services, the Department of Treasury, and the Department of Defense.

The US Department of Defense (DoD) research wing DARPA is experimenting with a blockchain cybersecurity platform for secure messaging and transactions and the DoD with blockchain to cryptographically protect its databases.

The FDA is trialling a supply chain tracking system to prevent pharmaceutical counterfeiting. The project is a collaboration with IBM, KPMG, Merck and Walmart and appears to use IBM’s blockchain technology Hyperledger.

To which blockchain protocol future investment by US federal and state governments will go remains to be seen. IBM’s Hyperledger may be a strong contender due to its creator’s proven technological supply and Hyperledger’s lack of an associated cryptocurrency.

That doesn’t mean blockchains like EOSIO are out of the equation, their development, utilisation and reputation over the next few years will determine which protocols achieve wider adoption.

(Written by Melanie Kramer, edited by Michael O'Sullivan)

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