The Building Blocks of Blockchain
Arizona lays a firm foundation for innovators in cryptocurrency and related fields.
By Ron Starner
If you haven’t followed the latest news in blockchain technology, you’re missing out on one of the hottest tech trends since the advent of Netflix.
How big is blockchain? Consider this: the global blockchain market is predicted to be $20 billion by 2024; the average investment in blockchain projects last year was $1 million; and IBM is investing $200 million into blockchain-powered Internet of Things work.
If that doesn’t grab your attention, perhaps this will. Greater Phoenix is poised to become the blockchain capital of the country.
Through a combination of innovative lawmaking, creative entrepreneurs and a high-powered higher education system, the Arizona desert is rapidly becoming the go-to oasis of cryptocurrency firms and related blockchain startups. Companies like Dash, Sweetbridge, Arena, Nexus, Coldti, Propy, Camp BX and KryptoPal already call Greater Phoenix home, and more are joining them every month
Blockchain, in short, is software that relies on multiple computers to create a tamper-proof ledger of transactions. Cryptocurrency miners are among the most well-known blockchain adopters because they mine online networks 24/7 to validate transactions. Successful miners are rewarded with cryptocurrency, Bitcoin being the most popular of some 1,200 types. The reward lowers transaction fees by creating an incentive to add to the processing power of the network. As of Sept. 14, one bitcoin was valued at $6,487.
A growing group of firms in Greater Phoenix has found success and security while innovating in blockchain. Their innovation has been enhanced by the steady stream of engineering and FinTech talent coming out of Arizona State University, Grand Canyon University, Maricopa Community College, Mesa Community College and other schools in the Valley.
Facilitating innovation in this emerging sector is landmark legislation, Arizona House Bill 2417, which makes it easier to accept electronic signatures on contracts, and the groundbreaking FinTech Regulatory Sandbox.
Dragan Boscovic, technical director of the Center for Assured and Scalable Data Engineering (CASCADE) at ASU, came to ASU in October 2016 after being a technology executive with Motorola in Europe, China and the U.S. “I have a good track record in identifying game-changing technologies,” he says, “and right now one of the biggest is blockchain.”
ASU launched the Blockchain Research Lab and Blockchain Innovation Society after Boscovic met the founder and CEO of Dash, a commonly traded cryptocurrency. “We happened to live in the same building complex in Arizona,” Boscovic says. “They wanted to build a stronger relationship with ASU. They were housed at SkySong – the ASU Scottsdale Innovation Center – and they started with a $50,000 investment.”
Likeminded firms are flocking to the desert, he says, because “Arizona has created a welcoming climate for blockchain firms. The regulatory framework does not impede innovation. Plus, more than $6,000 students are studying computer science here. As a result, we are launching a program with a focus on blockchain within the ASU School of Computer Science. Other cryptocurrency firms will establish operations in Arizona because of this.”
Sweetbridge is one of them. Located at Galvanize, the Center of Entrepreneurship in Phoenix, Sweetbridge won an award for innovation in supply chain using blockchain and is quickly ramping up thanks to its ability to tap into talent at ASU and other schools in the area.
“We are still a little over. A year old,” says Will Munsil, general counsel for Sweetbridge. “We are an open source project to make commerce of all kinds more affordable and more accessible for everyone – from businesses to individuals.”
Founded by Scott Nelson, the founder and CEO of Trax Technologies, Sweetbridge is a finance platform for commerce with a heavy supply chain focus.
Phoenix is developing a tech ecosystem with a government as a willing partner.
KryptoPal is another local success story. A platform to develop applications, websites, POS systems and IoT devices, KryptoPal uses blockchain technologies to help non-techies access the blockchain.
“We got started about a year ago,” says Jaycen Horton, chief technology officer for KryptoPal, which is also based at Galvanize. “We met up at a local meetup in Phoenix called Desert Blockchain. We moved into an office at Galvanize in October 2017 in downtown Phoenix. We are right across the hall from Sweetbridge.
KryptoPal celebrated its full launch on Aug. 8 and plans to grow swiftly, says Horton. “There are lots of people building solutions for blockchain and crypto-technology in Phoenix. People can stay here and work on these emerging technologies because they can work with several companies in this market.”
Greater Phoenix: The Connected Place