Imagine paying for your groceries, not with cash or credit card, but with bitcoins.
Gov. Doug Ducey signed HB 2544 in May to establish the Blockchain and Cryptocurrency Study Committee, a group that reports on what could help the cryptocurrency market grow in Arizona.
Cryptocurrencies, a form of digital money, are a massive market. The global cryptocurrency market size was valued at $1.49 billion in 2020, according to PR Newswire.
The Blockchain and Cryptocurrency Study Committee is made up of government officials, university professors, and representatives of cryptocurrency companies, according to the meeting notice. Notable names from the cryptocurrency world, like Ryan Taylor, CEO of Dash Core Group that made the Arizona-based Dash cryptocurrency, are part of the committee.
Cryptocurrency transactions are tracked and kept secure by blockchain technology. Blockchain is an immutable digital leger, and it is the underlying technology that makes cryptocurrency possible, according to IBM.
Dragan Boscovic, Arizona State University research professor and founder of ASU’s Blockchain Research Lab, is a committee member who attended the committee’s first meeting on Sept. 27. Boscovic said cryptocurrency and blockchain technology could change how transactions occur in the real estate market.
If someone buys a house, “we are going to go through a trusted intermediary, a relator and the title agency,” Boscovic said. “Blockchain basically does not require that because the history of the transactions for that specific property is on blockchain. It is immutable, and I can easily verify that property … It is significant because it speeds up (the) transaction.”
Cryptocurrency is already used in Arizona to purchase real estate. The Hudye Group, a real estate firm, accepts the cryptocurrencies Bitcoin and Ethereum as payment for its condos in Scottsdale, according to AZ Big Media.
What can be purchased with cryptocurrency is not limited to the real estate market. DropParty, a business started by an ASU student that helps creators sell digital art, built its business around cryptocurrency transactions.
Xavier Santos, CEO of DropParty and an ASU senior majoring in marketing, created the business to support people making nonfungible tokens, or NFTs, unique digital items that can be bought and sold.
“Right now, everything online doesn’t really have ownership, up until NFTs,” Santos said. “With NFTs, it’s stuff that you own online.”
NFTs come in the form of videos, GIFs and JPEGs. Since the process of creating an NFT can be complicated and requires coding knowledge, Santos started DropParty to make the market more accessible to creators, according to Santos.
Cryptocurrency is a decentralized currency, meaning people can deal directly with each other when making exchanges without needing a third party, according to Investopedia. Santos believes the universality of cryptocurrency is what will help it grow.
“As time goes on, I bet you more people are going to accept cryptocurrency, because it’s a universal currency that (is) not associated with any specific place,” Santos said.
By the end of next year, the Blockchain and Cryptocurrency Study Committee must provide a report on what steps Arizona legislators can take to support the cryptocurrency market to the speaker of the House, according to the bill.
In 2017, the Legislature passed a law legitimizing electronic signatures secured through blockchain technology, according to House Bill 2417. The following year, the Legislature passed a law protecting Arizona’s who provide computing power to validate or encrypt transactions in blockchain technology from restrictions by a city or county, according to Arizona Revised Statutes 9-500.42.