Two Hawaii representatives introduced a bill that would establish a state working group to explore the potential of blockchain, and services such as bitcoin that use the technology.
One of the chief areas of interest is the potential to serve the tourism industry, and make the state more attractive to visitors from Asia in particular.
"Digital currencies such as bitcoin have broad benefits for Hawaii," the bill, co-sponsored by Rep. Chris Lee and Rep. Mark Nakashima, states. "A large portion of Hawaii's tourism market comes from Asia, where the use of bitcoin as a virtual currency is expanding. Hawaii has the unique opportunity to explore the use of blockchain technology to make it easier for visitors to consume local goods and services and to drive the tourism economy."
Blockchain is an ordered database that, thanks in part to its structure, is particularly resistant to tampering. It is useful for recording events, logging transactions and keeping an individual's data ordered and secured. It has significant potential to enhance systems for medical records, financial transactions and court records. It is perhaps most known for its use in creating the virtual currency bitcoin.
Hawaii Rep. Chris Lee is one of the co-sponsors of a bill that would establish a state working group to explore the potential of blockchain technology to boost tourism and other industries.
"We feel we ought to be leaders in this area, and out of all the states we stand to benefit from it most quickly because of our place as a gateway to Asia." Lee said. "If we can get something in place relatively quickly, the state will benefit, local businesses would benefit, and it stands to open up a lot of opportunity."
Because blockchain-based currencies work as peer-to-peer transactions, there are no agencies in between and therefore no transfer or conversion fees. The currency, first introduced in 2008, has gradually increased its market, and now sees more than 250,000 unique daily transactions. There are now almost 1,000 bitcoin ATMs around the world, and more than half are in the U.S. On the other hand, bitcoin is a relatively volatile currency. Federal authorities have expressed concern over bitcoin's links to black market transactions, and there are concerns about computer hackers using malware and other techniques to gain control of accounts and records.
"There are a number of uses for blockchain technology, but the country is a little behind because we've had greater scrutiny and looked at its implications, both good and bad," Lee said. "Also, as a nation, you tend to have to go through more hurdles here to gets things in place, for better or worse. But now we have the opportunity to have learned from those early missteps."
Hawaii is not the only state that is interested in using blockchain technology. Arizona, North Dakota and Illinois have all taken steps to explore how the database system could be utilized in various sectors.
In addition to boosting tourism by making it more efficient and cheaper for visitors to both book travel and make purchases while abroad, the state could use blockchain in several other areas.
Lee believes the technology could help organize the state's land registry system, which has records dating back hundreds of years. It could also be used to organize and manage medical information, and secure data and payments for the state's nascent medical marijuana industry.
If approved, the bill would establish a working group of people from different industries to explore the potential of blockchain and also examine regulations that may be necessary. The state legislature will wrap up its session before summer, and if the bill passes the working group could get started later this year.
"The response since we introduced the bill has been overwhelmingly positive," Lee said. "There are various businesses and other stakeholders looking at this too who are asking to be included in this process going forward. There is widespread potential that can bee seen across all industries."