* Press release…
In an ever-evolving Illinois economy, the popular new currency Bitcoin creates exciting possibilities. A new Illinois House committee is aimed at making sure Illinois embraces those innovative opportunities while providing the proper oversight to protect consumers.
State Rep. Jaime Andrade, chairman of the Illinois House Cybersecurity, Data Analytics, and IT Committee, announces the creation of a new subcommittee on cryptocurrencies and distributed ledgers. Andrade, D-Chicago, leads the full Cybersecurity Committee to review critical questions over how Illinois oversees the challenges that come with technological innovation, such as how online companies keep personal data shared on their platforms private and secure.
The cryptocurrency subcommittee will be chaired by state Rep. Mike Zalewski, D- Riverside, who already has been working on legislative oversight of Bitcoin and the blockchain to ensure the innovative economic tools can be fully and securely implemented in Illinois. Zalewski also leads on critical financial issues as chairman of the Illinois House Revenue and Finance Committee.
Bitcoin is a new digital currency held electronically, with no physical backing, that has taken the world financial sectors by storm. Bitcoin transactions work on a decentralized network of computers around the world, instead of through traditional paper and electronic payment transactions. Bitcoin’s value has been volatile in recent months, facing infrastructure challenges and high transaction fees.
The lawmakers said the subcommittee will be the perfect vehicle for policymakers to better understand Bitcoin technology.
“Technology can quickly outpace our state’s laws, and create unforeseen problems,” Andrade said. “I am confident Rep. Zalewski and this subcommittee will consider Bitcoin’s future carefully and allow us to support both innovation and consumer safety.”
Rep. Mike Zalewski
“In my work on other technological advances such as fantasy sports and ride-sharing services, we have found ourselves trying to catch up to popular services,” Zalewski said. “As lawmakers, we all want government to run more efficiently and transparently. Distributed ledger technology has the promise to do just that — replace old antiquated systems with a modern approach to serving citizens’ needs. My hope is we can understand whether Bitcoin is the right investment or a risky gamble, and create policy that puts consumers first.”
The Rauner administration has been exploring the blockchain for well over a year now. They’ve come up with some interesting preliminary ideas. A summary is here.
* Public Radio…
The value of the digital currency Bitcoin has been volatile during its existence so far, but its blockchain backbone could have other uses for the state. Blockchains are encrypted ledgers of transactions that can be shared. […]
“Regardless of how much Bitcoin is selling for, we can really use the technology that Bitcoin has provided to make government more efficient,” Zalewski said.
Zalewski said that could include sharing real estate and healthcare information more easily and securely.
“It would be great if people could control their own health records and not having to worry about documents going from Point A to Point B,” he said. “If everyone just had access, you could give clearance to who looked at your health records online in a very safe and secure way.”
* Tribune…
Rep. Mike Zalewski, D-Riverside, who will chair the new subcommittee, said the group will focus on the software behind bitcoin, called blockchain. Zalewski said that technology could help state government run more efficiently.
“We are under tremendous pressure in this state to make government more efficient,” he said. “This technology has the opportunity to help remake government. That’s what we’re interested in.”
But lawmakers, who first began discussing digital currency and its application this fall, also want a more focused way to examine bitcoin’s use by consumers, Zalewski said, though he doesn’t expect there will be a rush to regulate or restrict bitcoin’s use.
“The goal of this is not to regulate it in a way that’s going to make people uncomfortable to use it in the future,” he said.
* Either way, I hope Rep. Zalewski has updated his Bitcoin thinking from mid-December…
“I’m skeptical there’s a bubble and I’m skeptical it’s going to burst,” Zalewski said. “Anything’s possible. Just based on the testimony we’ve received, the agency input, I’m very skeptical this is going to go away anytime soon.”
* Related…
* Blockchain: Hype, Reality And Opportunities
* Estonia, the Digital Republic: Its government is virtual, borderless, blockchained, and secure. Has this tiny post-Soviet nation found the way of the future?
* 4 Blockchain Bills Introduced in New York State Assembly: Horrified by reports that the Russians might have hacked voting machines and the fact that one county lost a high number of voter records in 2016, New York Assemblyman Clyde Vanel introduced four bills this past week to prevent this from ever happening in the state. “In 2016, Kings County lost 120,000 voter records,” Vanel said. “I felt we needed to secure and safeguard our election system. I wondered if blockchain (technology) was the solution.”
- Chicago 20 - Thursday, Jan 4, 18 @ 11:03 am:
Anything can be hacked. It’s just a matter of time.
The biggest reason to use cryptocurrency is to avoid government regulations and avoid oversight.
https://amp.businessinsider.com/nicehash-bitcoin-wallet-hacked-contents-stolen-in-security-breach-2017-12
“NiceHash is only the latest cryptocurrency company to suffer a major hack in recent months. Despite the widespread notion that the blockchain technology behind bitcoin and other cryptocurrencies is safer and more trustworthy than that underlying other kinds of digital financial transactions, startups in the industry have struggled to secure their sites and software against hackers.”
- Robert the 1st - Thursday, Jan 4, 18 @ 11:12 am:
Thank goodness! Now I feel safe to invest. What would we do without our caring state government?
- Michelle Flaherty - Thursday, Jan 4, 18 @ 11:12 am:
Put all the pension funds in Bitcoin.
It’s now or never.
- ughhh - Thursday, Jan 4, 18 @ 11:13 am:
“I’m skeptical there’s a bubble and I’m skeptical it’s going to burst,”
https://coinmarketcap.com/charts/
- ughhh - Thursday, Jan 4, 18 @ 11:16 am:
–Put all the pension funds in Bitcoin.–
Bitcoin is slow and has high transaction fees. There are much better Cryptocurrencies to use an emulate. Bitcoin was first to the market, but has been stagnant recently as other cryptos have leapfrogged it with their technology - only a matter of time till the prices reflect that.
- Too Much to Handle - Thursday, Jan 4, 18 @ 11:19 am:
I think that cryptocurrencies need to be regulated like securities. The lack of regulation has made me skeptical of what is really going on behind the curtain.
- Sen. Blutarsky - Thursday, Jan 4, 18 @ 11:23 am:
“allow us to support both innovation and consumer safety”
The scariest words a legislator can utter. In my opinion, the technology is decades away from being implemented by government. Bitcoin isn’t even the right crypto to use. Ethereum has much more to offer government than BTC, which is just a currency. And the technology is nowhere near ready for primetime. But there is a reason that the Ethereum Enterprise Alliance has attracted tons of institutional support from JPM, IBM, and a host of others.
If the state wants to do this right, they need to hire consultants with the appropriate backgrounds to make sure that they don’t screw this up.
Please, please don’t regulate this technology out of Illinois in the name of “consumer safety”.
- Mama - Thursday, Jan 4, 18 @ 11:24 am:
What happens when Bitcoin is bought out by another currency company?
- Rep Z - Thursday, Jan 4, 18 @ 11:26 am:
Lesson learned: stay away from market predictions.
- Mama - Thursday, Jan 4, 18 @ 11:27 am:
If Bitcoin is hacked, how will your money be protected?
- Just Visiting - Thursday, Jan 4, 18 @ 11:28 am:
Good grief. This is nothing more than a PR stunt. I would rather our legislators focus on the real issues of Illinois… budget, pension liability, jobs, stopping the exodus of people leaving, corruption, etc. How long until Flowers wants a bitcoin transaction tax? It might actually be interesting to see her try and explain how THAT one would work.
- Sen. Blutarsky - Thursday, Jan 4, 18 @ 11:31 am:
What a terrible PR stunt. Most legislators don’t even know what the blockchain is. Makes perfect sense that they would start regulating it under the guise of “balancing innovation with consumer safety.”
What a joke.
- Henry Francis - Thursday, Jan 4, 18 @ 11:40 am:
Wasn’t there a similar commission on driverless cars? I trust the legislators resolved all those issues before moving on to blockchain technology.
- Rich Miller - Thursday, Jan 4, 18 @ 11:41 am:
===Most legislators don’t even know what the blockchain is===
So… maybe the subcommittee is a good thing then? Gotta learn to crawl before you can walk.
- Rich Miller - Thursday, Jan 4, 18 @ 11:43 am:
===I trust the legislators resolved all those issues before moving on===
Why is that necessary?
- Last Bull Moose - Thursday, Jan 4, 18 @ 11:49 am:
It is useful to educate the legislators. As long as they understand that what they learn today will not quite be right in a week.
Crypto currencies are useful for people providing services over the internet. If the buyer is using a stolen credit card, the service is provided before the payment is denied. The provider eats the loss.
Crypto currencies are like paying with a cashiers check.
- California Guy - Thursday, Jan 4, 18 @ 11:49 am:
@ Mama: bitcoin is not a company, nor can another company “buy it”
Crypto is indeed a tool that can be used to avoid government oversight, which is why it was created to begin with. Currently, the transaction fees that miners get to process a transaction are too high - even higher than Visa, Mastercard, ACH, etc.
The blockchain technology could be useful if State agencies spend a lot of effort transferring money around (I don’t know if they do). Blockchain is a really good ledger system and can be used independent of bitcoin.
It’s great that the State is looking into new tech savvy stuff.
- Sen. Blutarsky - Thursday, Jan 4, 18 @ 12:02 pm:
Fair point Rich. I guess my concern is that they move to regulate too soon without giving the technology a fair chance to work. My other concern is that the tech aspects of it, which are crucial to understanding how it works, will not interest legislators enough for them to take the initiative to actually learn about it. Some certainly will, but I have serious doubts about many members.
- David - Thursday, Jan 4, 18 @ 12:13 pm:
I’m with Michelle! If the state had put the pension money in Bitcoin just 12 short months ago the system would now be vastly over funded. Either invest in Bitcoin or take it all to Vegas and let it all ride on red at least three times in a row.
- 47th Ward - Thursday, Jan 4, 18 @ 12:15 pm:
Crypto currencies were created to facilitate transactions between people who do not meet, know or trust each other. The distributed ledger system has tons of applications. Because it records each and every transaction, now and forever, it doesn’t require a third party to administer or verify. Possession is digitally stamped, available for all parties to examine. It is essentially indisputable.
Take property records, for example. There would be no need to record deeds in a county vault if the property information was recorded via distributed ledger. It would be clear to all interested parties who the owner is, how the property was acquired, whether there are any liens, etc.
I wouldn’t invest in bitcoin, but blockchain technology is going to change the way government works and it’s going to change the way we think of money forever.
The biggest obstacle to this technology becoming widespread is the huge amounts of computing power and the energy needed to scale this up.
- Anonymous - Thursday, Jan 4, 18 @ 12:22 pm:
Kinda ironic coming right after the news about the computer chips being used having the flaws. Pretty soon nothing will be safe.
- A Jack - Thursday, Jan 4, 18 @ 12:45 pm:
Perhaps they can start a Bitcoin mining operation in southern Illinois for out of work coal miners.
- Puddintaine - Thursday, Jan 4, 18 @ 12:50 pm:
Legislators want to promote a currency that is hip, and the kids will dig it…
Apologies to Joe Piscapo, Zombie Frank Sinatra and Zombie SNL.
- Henry Francis - Thursday, Jan 4, 18 @ 12:59 pm:
Of course you are right Rich. My point was with all the real, critical issues and challenges that Illinois is facing, this seems to be an odd choice.
- Pritzker's Toilet - Thursday, Jan 4, 18 @ 1:09 pm:
–Perhaps they can start a Bitcoin mining operation in southern Illinois for out of work coal miners.–
Considering the mineable BTC is finite and its costs to mine are increasing exponentially thats a really bad plan, and an even worse joke at the expense of our fellow illinoisans…
- blue dog dem - Thursday, Jan 4, 18 @ 1:10 pm:
Are rogue and terrorist nations able to avoid international economic sanctions by using cryptocurrency?
- California Guy - Thursday, Jan 4, 18 @ 1:59 pm:
@Blue Dog Dem
Yes, just like they avoid them now with cash and commodities. The existence of Bitcoin does not start or stop anything from happening that isn’t happening already.
- Duopoly - Thursday, Jan 4, 18 @ 2:04 pm:
It would seem that state legislators’ time would be better spent learning about US dollars and cents function and how repaying debts reduces costs.
- Da Big Bad Wolf - Thursday, Jan 4, 18 @ 2:27 pm:
Since cryptocurrency has seen such steep price changes it is impractical as a currency. The only reason to buy it would be because othwr people are buying it, the essence of a bubble. I don’t see where Zalewski is coming from. And yes a lot of Illinoisans will get hurt in the coming crash.
- Blue dog dem - Thursday, Jan 4, 18 @ 2:50 pm:
California Guy. Did you say cash? Like pallets.of cash?
- California Guy - Thursday, Jan 4, 18 @ 3:19 pm:
Blue dog dem: No, I did not say pallets of cash?
- ArchPundit - Thursday, Jan 4, 18 @ 3:38 pm:
Block chain technology is very useful and the state should be looking into it and the promise for many tasks the state does. That said, cryptocurrencies are a sub set of block chain technology that need regulating as any commodity does. It’s not some magical thing–it’s a commodity without, you know, the commodity.
- L. Marion Bitcoin - Thursday, Jan 4, 18 @ 3:38 pm:
I hope that right after the geniuses in the GA regulate bitcoin and blockchain they take on Schrute Bucks next.
- Jake From Elwood - Thursday, Jan 4, 18 @ 4:21 pm:
Perhaps I am missing the vote but I don’t buy stock in anything I don’t understand.
- Logan - Thursday, Jan 4, 18 @ 4:25 pm:
“Since cryptocurrency has seen such steep price changes it is impractical as a currency. The only reason to buy it would be because othwr people are buying it, the essence of a bubble. I don’t see where Zalewski is coming from. And yes a lot of Illinoisans will get hurt in the coming crash.”
There are coins, and there are tokens. Some cryptos out there are designed to be used for monetary transaction, some are to be used for various products such as file storage, decentralized internet usage, etc. The “currency” in cryptocurrency is misleading.
The technology behind it would do wonders to make things more efficient for us. There’s already cryptos out there which would be in line of what Zalewski was saying, specifically the medical industry. If there’s something that a blockchain can be used for, it probably already exists or is in development.
- Anonymous - Thursday, Jan 4, 18 @ 5:09 pm:
“Bitcoin is a new digital currency held electronically, with no physical backing”
As oppossed to what? How many people have stock certificates and duffle bags of paper money in their homes? Every asset apart from physical commodities are just bits in a database (including USD)
- SameolG - Thursday, Jan 4, 18 @ 5:47 pm:
Stock market is up 25% over last year and people call cryptos a bubble. Lol. Um ok.
- Just Visiting - Thursday, Jan 4, 18 @ 5:58 pm:
Anon @ 5:09,
The US Dollar is backed by the full faith and credit of the United States of America. To say that the US Dollar is just “bits in a database” shows a complete lack of understanding currency. True, we don’t have enough gold in Ft. Knox for each dollar in circulation, but we certainly have the assets and the ability to tax backing every Washington, Lincoln, Hamilton, Grant and Franklin out there by the US Government.
- ITEngineer - Friday, Jan 5, 18 @ 8:27 am:
Drop Bitcoin from the discussion and focus on BlockChain and they have the right idea. Block Chain has lots of uses in regulation. A creation of industry specific ‘webs of trust’ that function as a NaaS (Network as a Service) has endless uses in transferring data in a highly secure environment. Perfect examples are Insurance and Healthcare. The side effect would be budget savings in the number of investigations of fraud for instance.