In January of 2019, the House of Representatives’ Information Technology Committee commissioned a study to research the potential for incorporating blockchain, the peer-to-peer, distributed ledger which supports cryptocurrencies such as Bitcoin and Ethereum, into the state government.
Rep. Nathan Toman, R-Mandan, spearheaded the efforts to bring forth the study in the 66th Legislative assembly.
“What I came up with when I decided to propose the study was ‘How can we track the state of North Dakota’s finances and also provide a service to the taxpayer?'” Toman said.
Blockchain could be used to provide services to taxpayers and constituents, he continued. “You could go onto a single portal with your identity and the blockchain network would make sure that everything is tied into whatever those services would be,” he said.
Rather than relying on the state’s IT department, the blockchain could track communications between state agencies and track funds in budgets on its own.
“Since the blockchain network is a self-governance kind of thing, even if it were a private one and not owned by the state government, it would still validate all of those transactions without having to have a third party do it,” Toman said. “As long as your programming is sound and it’s all tested and vetted, it runs itself at some point.”
Rep. Nathan Toman (R-Mandan)
A key security vulnerability the state’s blockchain network would face would be its location.
In a public blockchain, servers could be located anywhere from an individual’s basement to a vast corporate operation. The state’s blockchain would reside in North Dakota.
“Any hacker, political or otherwise, would know those servers reside in the state of North Dakota,” Toman said. Still, Toman believes there are cybersecurity benefits the blockchain would provide because the network would have the capability of verifying millions of transactions per second.
‘North Dakota coin’
Beyond government efficiencies and taxpayer services, Toman envisions the state taking blockchain one step further, using it to establish its own state token.
The token, which Toman dubbed “North Dakota coin,” would be used to shield the state from the type of economic downturn the COVID-19 pandemic prompted.
“That was my hope, but we’re a little bit late to the game on doing something like that,” he said.
The token would not be a form of currency but rather a store of value tied to state assets…