Eric Adams, who will serve as New York City mayor for eight more days, on Friday unveiled the city’s new “blockchain plan,” a 61-page document intended to guide agencies as they research new uses of distributed ledger technology, best known for supporting cryptocurrencies like bitcoin.
The plan is designed to help agencies “investigate potential opportunities and risks, raise public awareness of emerging technologies, and establish mechanisms to track progress and coordinate efforts citywide,” according to a letter attached to the plan signed by the city’s chief technology officer, Matthew Fraser. Apparently developed over the past 18 months, the new plan is a continuation of Adams’ many years of policies and measures aimed at boosting the blockchain and cryptocurrency sectors.
According to a press release, the plan also expands on the executive order Adams signed last October establishing an Office of Digital Assets and Blockchain Technology. The office is led by Moises Rendon, who served for more than a year and a half as a digital asset and blockchain policy advisor in the city’s Office of Technology and Innovation. (After repeated calls and emails over the past two months, the city’s technology office would not grant Rendon an interview or answer questions about the new blockchain office’s operations. When contacted for this article, a spokesperson for the technology office provided an excerpt of Fraser’s letter.)
The city plan notes that blockchain is a “rapidly growing technology attracting intense interest and development globally,” and highlights the technology’s marriage to bitcoin and a recent increase in the number of new “digital assets.” The plan presents blockchain as an “emerging technology” that must be studied before the city can “chart a responsible path forward.” (A contact for Mayor-elect Zohran Mamdani did not immediately respond to an email asking whether the blockchain plan would continue under his administration.)
The plan outlines several new initiatives, including a pilot project led by the city’s Department of Environmental Protection that explores the use of blockchain to verify asbestos certification. No further details about the pilot are provided, except that the IT office “will also engage other interested agencies on potential applications such as digital credentials, permits and licenses, or broader data management efforts.”
There are plans to create an interagency working group, a new “clearinghouse” to advance public information and consumer safety, and technical guidance for agencies, focused on issues of “equity, data privacy and security, access, and the public interest.” The plan does not address why the nation’s largest city is devoting resources to a technology widely considered, outside the crypto industry, to be of little use.
More than four years ago, this publication published an article highlighting the rapid decline of blockchain, a technology buoyed by the success of cryptocurrency but never widely used in state or local government. This is despite numerous pilot projects across the country and repeated attempts by the industry to break into the sector.
“Besides crypto, tell me how to use it,” Ed Toner, former Nebraska chief information officer, said in 2021. “Tell me what widespread value blockchain has ever brought. I challenge everyone.”
A lot has changed in the public sector over the past four years, but the status of blockchain is not one of them. The technology’s primary role as the technological backbone of the crypto industry is sometimes punctuated by attempts to use it for other purposes before it disappears again.
Blockchain sometimes appears in association with digital identity software being considered by state agencies, or is proposed as a way to record historic places. Last year, the California Department of Motor Vehicles used blockchain to record 42 million vehicle titles, hoping to reduce fraud and give owners more autonomy when selling their vehicles.
In 2023, the Rhode Island Department of Commerce, led by Secretary Elizabeth Tanner, experimented with using blockchain to replace an outdated paper business license application process. The department, which is no longer led by Tanner, did not respond to an email seeking an update on the success of this project.
Early iterations of mobile voting software used blockchain, only to be easily dismantled by security researchers. Joe Kiniry, a cryptographer who designed the technology behind the Mobile Voting Project, a new effort led by political strategist turned venture capitalist Bradley Tusk, recently called blockchain “nonsense.”
Blockchain has been tried for many other uses, such as recording property titles or streamlining disaster response processes within the federal government, although the added value of blockchain has never been evident. In 2022, more than 1,500 software engineers and other technologists signed a letter telling Congress that they were fed up with blockchain technologies, which “facilitate few, if any, uses in the real economy.”
“We dispute claims made in recent years about the novelty and potential of blockchain technology,” the letter read. “Blockchain technology cannot and will not have transaction reversal or data privacy mechanisms, as they are antithetical to its core design. Fintech serving the public must always have fraud mitigation mechanisms and allow a human in the loop to reverse transactions; blockchain allows for neither.”
Hilary Allen, a law professor at American University in Washington, DC, said blockchain is a performative gimmick that shows no sign of going away, despite the clear message sent by the technology’s many detractors.
“Frankly, people in the industry were tired of people saying: well, blockchain can fix it“, Allen said of the 2022 industry letter. “And they say: no, blockchains suck.»
The conceit of blockchain is largely the same as that of the cryptocurrencies it enables: centralized power, like that of banks, has led to levels of corruption, injustice and institutional lethargy that do not serve the interests of the masses – but decentralized and transparent technologies can usher in a new paradigm in which people are empowered to transact on their own terms. But, Allen pointed out, blockchain hasn’t done much in the crypto industry except shift a modicum of power from banks into the hands of the people who run crypto companies, many of whom are bankers and wealthy entrepreneurs.
“There are always concentrations of power,” Allen said. “You always trust someone. So why use this inefficient, cumbersome database when it doesn’t cut out the middlemen, it doesn’t remove the concentrations of power? So just use the simple, fast, efficient database.”
