Pinedale Rally | Blockchain, Cryptocurrency Initiatives Gain Momentum At UW

LARAMIE — The state, city and University of Wyoming are focusing more on some newer areas of technology that some hope will become a major economic boost for the Cowboy State: blockchain and cryptocurrency.

On the heels of the state’s legislative efforts to give the state more support for an emerging industry, UW began teaching blockchain courses three years ago and opened its Center for Blockchain and Digital Innovation the following year. Its director, Steven Lupien, says the impact of technology on future generations could be similar to that of the internet.

“There is almost no place in UW that is not affected by blockchain,” said Lupien.

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Simply put, a blockchain is a data sharing system that works by sharing information between multiple computers or groups of computers. Information is associated in groups called “blocks” that are related to each other.

The technology is widely known as a system of registration and security for digital currencies such as bitcoin, although it could also have important applications in education, ranch management, emissions tracking and healthcare, Lupien said.

Since 2017, the state has opened the door to cryptocurrency development, passing at least 24 laws intended to open up the sector and ultimately give Wyoming a reputation as the “wild west” of cryptocurrency, according to Fortune. †

The changes came largely from advocacy by Caitlin Long, a UW alumnus who was also Lupien’s wife and CEO of Avanti Financial Group, a cryptocurrency banking company.

The cryptocurrency is known to be extremely volatile with dramatic changes in value, raising concerns about its security and reliability. Bitcoin is known to fluctuate 30% in one day, according to Forbes.

Others, such as Long and Lupien, consider it a groundbreaking financial investment that helped create jobs in Wyoming and fill the gaps left by the state’s dwindling coal industry.

At UW, blockchain and cryptocurrency initiatives are gaining momentum. The university has already established itself as a leader in the field as the first Division I university to offer education in digital assets and the first to have bitcoin miners on campus (there are now 12).

Last month, the university received a $645,000 donation from Ripple, a leading cryptocurrency and blockchain company.

The money, to be disbursed over three years, will create an on-campus Ripple Blockchain Collaboratory that will be housed in the Center for Blockchain and Digital Innovation. According to a press release, the new sector will be joined by students from the Faculty of Law and the School of Engineering and Applied Science who want to learn more about cryptocurrency, blockchain and cybersecurity.

The initiative brings the university and the state closer to their goal of using the industry to make more money, Lupien said. It also benefits industrial companies looking for cities with skilled workers and the necessary infrastructure to set up their operations.

“(The industry) wants to build the infrastructure it needs to be successful,” Lupien said.

He also hopes the growth could curb the number of students earning engineering degrees at UW and leaving the state immediately in search of a job.

“This is about jobs and opportunities for Wyoming,” said Lupien. “We have to embrace the companies that come here and we have to embrace the workforce.”

The Laramie Chamber Business Alliance also sees potential in the sector, although the group has focused on recruiting tech companies looking at intellectual property and infrastructure rather than data mining itself, even, President Brad Enzi said.

There are currently no cryptocurrency or blockchain companies in Laramie, but some are using blockchain technology as start-ups, Enzi said.

A technology company with a data mining aspect has resulted in setting up a shop in Cirrus Sky Technology Park, a technology business area in Laramie.

The company needed access to more electricity than was available at the Laramie site, leading it to choose Pine Bluffs after signing a memorandum of understanding for the local lot. The area was originally expected to have more than 70 megawatts of electricity, but some of that electricity was set aside for other uses before the company could reserve it for itself.

Enzi shared this information with Laramie City Council at a meeting on May 24, noting that the lack of adequate infrastructure has resulted in the city losing an economic opportunity as the company allegedly created new high-paying jobs in the city.

The electricity problem surprised members of the city council, some of whom were also relieved that the company had chosen to relocate elsewhere.

“I feel there is a real difference between our stated goal to reduce electricity emissions in the city of Laramie and the arrival of a company that uses (that much energy),” said board member Erin O’Doherty. “I can’t get too excited about bitcoin mining and data mining and all the things that are going to increase our carbon emissions.”

Techdata website Digiconomist predicts that a bitcoin transaction will consume 2,221 kilowatt hours of electricity — the same amount an average American household would use in 76 days — and 1,239 kilograms of carbon dioxide.

The energy consumption of cryptocurrencies stems from the methods used to give them their value. Cryptocurrencies undergo one of two potentially complex verification processes: proof of work or proof of stake.

Most of the energy consumption comes from proof-of-work methods, which have evolved as supercomputers run around the clock to solve extremely complex math problems, Lupien said. Every time a problem is solved, a piece of cryptocurrency is created and a block is added to the blockchain, where transactions are shifted. Bitcoin is the most famous cryptocurrency that uses this system.

Other devices use the proof-of-stake method, which can be completed on a normal home computer and consumes less power.

In addition to concerns about pollution, cryptocurrency mining hubs across the country have suspected complaints from residents about noise pollution caused by industrial fans used to cool supercomputers.

While Enzi didn’t describe specific environmental or community considerations that the Laramie Chamber Business Alliance uses when recruiting businesses for Gem City, he said the group only recruits companies that operate within state regulations and operate locally.

The City of Laramie allows cryptocurrency and other tech companies as long as they adhere to the rules and regulations already written in city ordinances. Businesses would only be allowed in industrial zones and would be subject to a review process, planning director Derek Teini said.

“Almost every crypto company wants to be able to buy cleaner, greener energy,” said Enzi. “There are companies that use a lot of energy, but still buy green energy.”

Lupien said that while currencies using the proof-of-work method raise concerns about energy consumption, the industry is moving towards greener verification methods.

“I believe Wyoming should embrace this asset class,” said Lupien. “That’s the way the world is.”

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