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Vt. city’s officials aren’t just talking about blockchain, they’re experimenting with it

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Monitor staff
Wednesday, February 07, 2018

A few weeks ago, this column snorted in derision at the idea that blockchain, the technology underlying bitcoin, was actually useful in the real world.

Perhaps I snorted too soon, as what I thought of as one of the sillier proposals – using blockchain to register local land and property ownership – is being put into practice not too far away.

“The reason we agreed to the pilot is that it is an interesting technology,” said Donna Kinville, city clerk of South Burlington, Vt., the neighbor of Vermont’s biggest city and often seen as that state’s tech hotbed because it’s home to a large facility for IBM and a computer chip firm.

Blockchain is a catchy geeky buzzword these days thanks mostly to currencies like bitcoin, but the underlying tech also adds a layer of public accessibility and unhackability that appeals to public officials – especially if it could make their jobs easier.

The pilot project comes from a California company called Propy, a startup that’s trying to establish an online marketplace for properties that can be bought with cryptocurrency like bitcoin via a peer-to-peer network. As part of this, they want to establish blockchain as a recognized method for recording and storing information about such sales – hence their interest in this pilot project, which appears to be the first of its kind in the country.

Kinville said the pilot isn’t costing the city any money or time. Basically all she’ll do is add a hashtag to paper records for any sales also recorded in the blockchain (there aren’t any, so far). She has also agreed to go into the blockchain using Propy’s software to record the deed.

“I see it as a project manager system – that’s the part I like about it,” Kinville said. “Everything is self-contained.”

And if that becomes a hassle, they can back out: “We have no obligation. I can say tomorrow, We’re done.”

Blockchain background

And now a bit of background (skip ahead if you’re blockchain-savvy):

The easiest way to think of blockchain is that it’s a super version of a shared Microsoft Word file or Google Doc – super because it’s shared with everybody, encrypted and so far as anybody knows at the moment, unhackable.

Bitcoin uses these attributes to support its role as a money-like object, but blockchain could be used, in theory, for many other things. One of those things is an online ledger, a list of accounts such as sales or profit and loss. In theory, keeping a ledger in blockchain allows other people to trust the record without having to depend on a central agent such as a bank – or a city clerk, for that matter.

Why do adherents say blockchain can be trusted? Because of the way the entire ledger is shared via the cloud among everybody who uses it.

Let’s say I was able to hack South Burlington’s blockchain-based property records to show that I had bought City Hall, then showed up to evict the tenants. They could point to thousands (millions?) of copies of that blockchain existing on other servers that did not include my hack, showing that it was a fake.

This is why it’s called, oddly, a “trustless” system. You don’t have to trust a central authority, like a city clerk’s office, that says the records haven’t been fiddled with: The technology makes it clear.

The result could be a more efficient, quicker, cheaper way of handling records or contracts or anything that has to be tracked and monitored.

In theory, at least.

That’s it for the background

“We are approaching this on a very pilot, proof-of-concept basis: Hey, show us if it works,” said attorney David Thelander, who specializes in financial technology for companies and has been part of the state’s interest in blockchain for a while. “Many states are looking into this, to support this type of innovation, see where it goes – we don’t want Vermont to be left behind.”

Vermont paid for a study in 2016 to see whether blockchain should be adopted by the state government. The study concluded that the cost wouldn’t be worth the benefit to Vermont, but found no serious drawbacks.

Propy has signed a contract to use blockchain for property records in Ukraine. Trust in government record-keeping is pretty low there, so using a blockchain system makes sense.

Whether it makes sense in the U.S. is another matter, since, despite our hand-wringing about government, we’re pretty good at city hall stuff. Hence the idea of a pilot project to weigh pros and cons.

When I pooh-poohed blockchain recently, I leaned heavily on the expertise of Rob Fleischman, a principal software architect at Akamai Technologies in Manchester and a fellow N.H. Public Radio commentator. He is unmoved by the Vermont experiment.

“I can easily see how a secure online platform brings value to this space. I don’t see how adding blockchain to that provides any additional value,” he wrote in an email that included several all-capitalized words, just in case I doubted the strength of his conviction. (I didn’t.)

The big difference I see is that blockchain holds out the promise of eliminating the city clerk’s job. Thelander says that’s not the point.

“This is not about rendering the clerks redundant. This is about helping their ability to prioritize in other areas rather than spending time in a highly manual, highly inefficient process, to help them carry out their other roles,” he said.

Perhaps. And perhaps not. I’ll be interested to see what our Green Mountain State friends find out.

Bonus Geek at the end of the week

Politics and mathematics intersect more than you might realize, and on Saturday I’ll be moderating a discussion about one of those areas: Alternative voting methods.

The conversation is prodded by a couple of bills floating through the Legislature that would allow New Hampshire elections to choose winners based on something other than just “who got the most votes.”

The panel is part of the weekendlong Liberty Forum hosted by the Free State Project folks, who tend to be big supporters of alternative voting systems, so you have to register and maybe pay to see it, unless you can figure out how to sneak in. It starts at 4 p.m. Saturday in the Radisson Hotel in Manchester.

In case you’re wondering, my participation is unpaid and indicates neither support nor opposition to Free Staters and their varied (to say the least) points of view. I agreed to moderate the hourlong session only because this is an interesting topic and I like to hear myself talk.

For more information, check nhlibertyforum.com

(David Brooks can be reached at 369-3313 or dbrooks@cmonitor.com or on Twitter @GraniteGeek.)