Colorado could use blockchain encryption to secure government data and track legal marijuana under proposed state laws that would put the state on the leading edge of the technology behind bitcoin and other cryptocurrencies.
One bill, introduced in the state Senate, requires Colorado’s chief information security officer to assess cybersecurity threats and specifically to look at encoding or encrypting state data using blockchain or other “distributed ledger” technologies.
State Sen. Kent Lambert, R-Colorado Springs, a former Air Force colonel who co-sponsored the bill, believes everything from the state comptroller’s checkbook and Colorado voting records to the state’s registry of cattle brands could be done on a blockchain, bringing new levels of security and transparency to the data.
“That’s the exciting part about this. There’s hundreds, if not thousands, of use cases for this,” he said. “It’s a transformative technology. We don’t know what it’s going to do, but we know it’s very powerful.”
Lambert said he’s had supportive conversations with Suma Nallapati, Colorado’s secretary of technology and the state CIO, and Debbi Blyth, Colorado’s chief information security officer, about the bill. The pair are enthusiastic about starting pilot projects using blockchain, he said.
A separate bill Lambert is co-sponsoring would push Colorado to apply blockchain technology to the seed-to-sale tracking of legal marijuana, seeing blockchain as part of a system to guard against diversion of legally-grown Colorado pot into the black market or out-of-state sales.
All this emphasis on blockchain by Colorado lawmakers is turning heads of experts far away.
“This is unique in what I’ve seen in terms of regulation and policy,” said Joe Stuntz, vice president of cybersecurity at One World Identity, a San Francisco-based cyber security consultancy.
Stuntz is a former technology policy expert at the Office of Management and Budget in the White House, who in recent years worked with state CIOs and government technologists on cybersecurity.
He’s never seen bills forward-leaning about a specific technology as what’s being proposed in Colorado, Stuntz said.
If Lambert’s government cryptology bill becomes law, Colorado’s chief information security officer would be asked to assess using blockchain in ways that aren’t yet done commercially.
The law could position the state as a partner and laboratory for developing uses of blockchain.
The bill also directs the state to try to start a center for blockchain excellence in partnership with the federal government’s National Institute of Standards and Technology, which has a campus in Boulder.
While he’s surprised to see it, Stuntz doesn’t think embracing the technology is a bad idea.
Blockchain and “distributed ledger” technologies use a series of digital keys distributed across hundreds or thousands of computers and requires consensus across the "chain" or ledger to authenticate a person’s access or to decrypt information.
The technology is most associated with virtual currencies such as bitcoin, distributing the information across the blockchain so there’s no centralized record or any storehouse to be stolen from or its information faked.
Spreading around such virtual keys in a blockchain could make information much harder to hack while still letting it be accessible to members of the public.
Startups are developing such uses for the technology, but no one has yet made a commercially available data product using blockchains, said Gil Beyda, a managing director of Comcast Ventures, the venture arm of Philadelphia-based cable giant Comcast Corp.
The state would be “on the bleeding edge” of using decentralized, consensus-driven technologies to secure electronic data.
“I’m glad to see Colorado’s at the forefront,” Beyda said. “These new models of protecting customer and citizen information — we’ll be seeing a lot more of it in coming years. It’s an interesting use-case, and one we hadn’t really seen talk about before.”
Having a state government pushing ahead could speed the technologies’ overall development, he said.
State and local governments maintain big databases of important data — property ownership records, occupational licensing, identity — which makes it a good use for developing new kinds of secure technologies.
Colorado’s effort likely would take months just to establish and have a state agency build its own private blockchain, then the state would have to figure out how to start figuring out bring the public into it, Beyda said.
Pushing the development of a particular technology is an unusual position for a state government, and a departure from the traditional cybersecurity strategies experts in government usually recommend, Stuntz said.
But given the continued insecurity of the digital world, maybe it’s time to look for completely different approaches, he said.
“What we’ve been talking about and hoping people would adopt hasn’t worked.” Stuntz said. “To me this is a push in a certain direction…It’s sort of a leapfrog.”
Lambert, the Colorado Springs state senator, said companies from outside Colorado have already been inquiring about helping in the push toward blockchain.
There are enthusiasts who believe the technology will change the way information flows have as big of an impact on the digital age as the internet itself.
If that’s the case, there’s a lot of good could come out of Colorado being a model for blockchain development, Lambert said.
“Eventually this is going to happen. Why shouldn’t Colorado be a pioneer and take part in this?” he asked.
Bills at the state Legislature that push the state to explore the technology behind bitcoin are turning heads.