Connecticut Non-Profit Uses Blockchain for Government Project

The Connecticut Technology Council (CTC) has partnered with blockchain startup Tierion for a trial that will find government survey data secured on the bitcoin blockchain.

As part of a drive to glean data from some 200 Connecticut technology companies, the state's Department of Economic and Community Development (DECD) is seeking perspective on issues including workforce demand and tax code awareness, among other issues, in a broad survey.

As explained by Tierion CEO Wayne Vaughan, the company's blockchain technology is not essential to the survey process, but rather provides the startup with a chance to expose new entities to the potential benefits of decentralized ledgers for recordkeeping.

Bruce Carlson, president and CEO of the CTC, suggested that his non-profit organization's goal is to encourage local technology development. As such, he saw the opportunity in a partnership with Tierion for his organization to learn about unfamiliar emerging innovations.

Carlson told CoinDesk:

"We like being on the cutting edge of what's going and we feel like this could be leading to more projects."

The DECD survey, according to Carlson, is currently being filled out by respondents, with all data expected to be collected by 11th September. He suggested the DECD remains actively interested in the results of the survey, but that the department may not necessarily be aware of any technology providers that facilitate handling of the data.

Vaughan indicated that he had previously worked with the CTC at his former business, web development provider Fuscient, until he wound down activities at the firm in 2014.

Challenging Factom

Vaughan suggested his interest in bitcoin and the blockchain began in 2013, when he decided to build his first bitcoin miner and began trading the digital currency.

"I got involved in trading because I felt the tech was really important. I jumped in," he continued, claiming that he even coined the term "Willy" for the bot network that was revealed to have been run by Mt Gox in the run-up to its 2014 collapse.

Eventually, this interest turned to business pursuits, with Vaughan joining decentralized recordkeeping protocol provider Factom to help with its business development. Ultimately, he said he left the project over issues with its business model, including the project's choice of a public token sale as a vehicle for fundraising.

"The core utility of Factom, you just don't need Factom," Vaughan said. "They could do a crowdsale, but it wasn't necessary for what they needed to accomplish. So in late 2014, I said, we're going to take this engine for collecting data and we're going to start anew."

The decision led Vaughan to create Tierion, which recently published a white paper on its open-source technology, Chainpoint, in July. The paper was written by Vaughan, Tierion lead developer Jason Bukowski and Storj founder Sean Wilkinson.

Tierion is expected to launch beyond an initial group of beta users later in September.

Open technology

Vaughan believes Tierion has so far received positive feedback on its technology, citing tweets or remarks from bitcoin core developers Jeff Garzik and Peter Todd.

Described as a protocol for recording data on the blockchain, Chainpoint secures records every 10 minutes by taking a hash of each record and building a merkle tree, the root of which is placed in a transaction on the bitcoin blockchain.

"We use the information of each path to build a blockchain receipt and that contains all the information that you need to verify that that piece of data," Vaughan explained.

The company contends that by taking this approach to securing records on the blockchain, it can record "tens of millions" of records on the ledger at a cost of 3 cents every 10 minutes.

The blockchain will only store records of the data not records directly, a function Vaughan said would be completed using Microsoft's enterprise cloud computing platform Azure.

Still, he emphasized that the intent is for the protocol to become more broadly useful other firms seeking to offer similar services.

"We want this to become a standard for anyone who is going to be creating a record of data. Anyone who is doing that with an application, we think that Chainpoint can be adapted for a wide variety of applications," he said.

SaaS model

As for its business model, Vaughan indicated that Tierion will position itself as a software-as-a-service (SaaS) firm for anyone that wants to collect data and secure records against the bitcoin blockchain.

Among its early prospective customers, Vaughan said, is a private equity fund that is seeking to organize its compliance data and a tax filing software firm that could blockchain records as a way to verify its communications with the IRS.

As for a marketing strategy, Vaughan said that Tierion is seeking to partner with firms that rely on strong recordkeeping but that may not be familiar with blockchain technology and its potential benefits.

"There are lots of companies that make legal claims, accounting software, those companies are not clamoring to integrate the blockchain," Vaughan said. "We're hoping the ability to create data without needing to rely on a third party will be of interest of them and they'll start to use our API and bake it into their software."

Vaughan indicated that Tierion took particular emphasis with its user interface, suggesting that if users can "make a contact form on a website" they will be able to use its software.

Tierion is currently bootstrapped with a team of two employees.

Records image via Shutterstock