3 Reasons Why Arizona is a Hub for Blockchain Innovation

3 Reasons Why Arizona is a Hub for Blockchain Innovation

Whatever you think about the ups and downs of cryptocurrencies like Bitcoin, it’s undeniable that blockchain engineering is one of the hottest job fields in computer science. Demand for blockchain engineers increased 400% from 2017 to 2018, with blockchain developer salaries ranging between $150,000 to $175,000 a year, on par with artificial intelligence developer salaries.

Still, blockchain companies have found that outdated regulations at the federal level (as well as in some states) can hamper development. That’s enabled Arizona to establish themselves as a leader in blockchain innovation with laws designed to encourage the development of this technology. Arizona State University has followed suit with blockchain courses as part of its Online Master of Computer Science degree.

Arizona has been called Silicon Valley Southwest thanks to its booming tech economy, and Phoenix has been named one of the fastest-growing cities for tech jobs by ZipRecruiter. This boom builds on a history of investments in the state by tech giants like Intel, Motorola, and Apple, as well as the intellectual capital of schools like Arizona State University.

This is also due to a tech-friendly legislature and organizations like the Arizona Technology Council and StartupAZ, who worked together to provide a favorable regulatory environment for startups. That includes passing a pair of laws that provided assurances blockchain companies need to move forward with new business models.

  • Smart Contract Law: Because blockchain provides an immutable record and support for self-executing contracts, the technology has the potential to reduce fraud as well as improve efficiency for a wide range of transactions. And in March 2017, Arizona became the first state to pass a “smart contract” law guaranteeing digital signatures recorded on a blockchain. This clarity is critical for startups, allowing them to move ahead with smart contract applications that are protected under law.
  • Corporate Blockchain Law: Similar to the rules protecting smart contracts between individuals, an April 2018 “Corporate Blockchain Bill” provides legal recognition for data stored and shared by corporations on the blockchain. This will allow companies to use this technology for all types of recordkeeping and provide legal certainty for both business and consumer-facing startups.

Last August, Arizona took its support for the blockchain ecosystem a step further by becoming the first state to create a “sandbox” for startups working in fintech. Based on a model first developed by Britain’s Financial Conduct Authority (FCA) in 2016, Arizona’s sandbox will allow startups to test their fintech products for up to two years and serve as many as 10,000 customers before applying for the formal licenses usually required for finance companies.

In fact, two of the three companies that have joined the sandbox are developing blockchain products:

  • Omni Mobile, the sandbox’s first participant, uses blockchain to underpin digital wallets for quicker payment transfers. Thanks to the friendly regulations of the sandbox, Omni will be able to test its platform by handling guest payments at the Westward Look Grand Resort and Spa in Tuscon.  
  • Sweetbridge is using blockchain to reduce costs and risks for consumers taking out vehicle title loans. As recognized by regulators, title lending is too often characterized by predatory lending practices like disguised fees and inflated rates. Sweetbridge believes that blockchain’s ability to provide transparency and cut out middlemen will allow them to lower APRs from an industry average of around 300% to approximately 20%.

Just as Arizona has opened its doors to blockchain startups, Arizona State University has made itself a hub for blockchain innovation. Its Blockchain Research Laboratory launched in 2017 and conducts foundational research on this technology with corporate and government partners. The student-led Blockchain Innovation Society provides opportunities for additional collaboration with students around the world.
ASU’s blockchain leadership is no surprise; it has been ranked the #1 most innovative school in America for four years in a row by U.S. News & World Report. Its Online Master of Computer Science provides an opportunity to gain an advanced education in areas including blockchain engineering as well as cybersecurity, artificial intelligence, and more. With an unparalleled combination of expert faculty and a flexible, affordable degree program, the ASU MCS is as innovative as the technologies it covers.