Blockchain industry based in NZ

The Blockchain industry is still in it's infancy but it is a sub-sector of the tech industry that is not going to go away and will only expand exponentially over the time frame that is being considered under the Digital Strategy. 

Cities like Miami, USA are working towards being the geograpghical 'capital' of the industry. We should be competing with this and encouraging these new tech ventures to migrate to NZ or establish themselves within NZ. 

We have the lifestyle to encourage to come.

We have the infastructure.

We have the talent to support it.

We should start pitching to businesses while the industry is young and capture some of the market.

Why the contribution is important

The idea is important as we can claim the image of the Blockchain capital of the world. The amount of money flowing through the industry already is extraordinary. We should be directing the people and investment here to establish and grow as it moves out of infancy and becomes more mainstream.

by mattwooddev on October 12, 2021 at 09:50PM

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Average rating: 4.0
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Comments

  • Posted by Rialonic October 14, 2021 at 10:58

    Blockchain technology, especially some of the more popular cryptocurrencies, use huge amounts of electricity. Supporting a digital future in NZ likely involves a large government investment in cleaner electricity generation.
  • Posted by mattwooddev October 14, 2021 at 20:05

    That is partially true @Rialonic. Bitcoin is a blockchain backed by Proof of Work. There are others that are backed by Proof of Stake that require significantly less energy.

    We shouldn't be missing chances to start industry. If we lead we can start it the right way and drive a clean approach we set the ideal for what the industry should be while still remaining competitive.

    If we miss an opportunity like this we risk being left again to consume an industry built by others and importing talent required to support it when we finally decide to hop on the band wagon.
  • Posted by amevas October 17, 2021 at 22:45

    @Rialonic, while the concern for energy use is valid, the reports of excessive energy consumption by bitcoin mining have been grossly exaggerated, driven by media hype and inadequate research-- a small pool of miners using a non-renewable energy source was taken as representative of the whole community. 

    Also, when people argue that Bitcoin uses up too much energy, the question is-- compared to what? How about mining for gold, and drilling for fossil fuels? Or even the energy consumed by the world's banking industry?

    El Salvador is a model for using an economically and environmentally sustainable method to mine Bitcoin, by harnessing volcanic energy. New Zealand can follow their example, and also look to other green energy sources, e.g. solar, wind, hydropower.
  • Posted by amevas October 17, 2021 at 23:33

    I agree that developing blockchain technology in NZ is an important goal, but not necessarily with the view to competing with Miami to become the world's blockchain 'capital'. Florida, for one, has no state income tax. That is one hard to beat incentive there, among other considerations :)

    Rather, I would like to see wider education and adoption, starting with the NZ government, and encouraging private enterprises as well to step beyond the status quo and start transitioning to the new technology.  It is important to note also that there are different types of blockchains, e.g. public and private, and various implementations of these as well.

    I will try to write up use cases and maybe post in another topic for discussion..
  • Posted by JWood October 18, 2021 at 13:50

    The only reason we know about Bitcoin or Ethereum's energy usage is because it is auditable and transparent. No one seems to to know or care for that matter about the energy cost of traditional finance let alone the security and transparency of it. NZ has excellent internet connectivity, enormous renewable capacity, and the tech talent to support the industry.

    The very fact there is discussion here mentioning the energy use highlights some fundamental misunderstandings about the technology that is present in the tech space that filters through to policy makers.
  • Posted by AJ October 19, 2021 at 12:14

    Supporting PoW crypto is inconsistent with NZ's climate commitments and aspirations. I understand that that the Btc sales office/evangelists want to tell a different story, but no one with any expertise in the energy sector buys it.
    Supporting PoS/PoA crypto is going the long way around get a bad version of what we already have: Fiat currency is already founded on PoA; PoS is just the rich and extremely rich getting to play with the system to suit themselves.
    If we're going to have a PoA system, I'd prefer one where there's electoral accountability every few years; and PoS logic is just culturally toxic (PoS is a p.o.s.) but if we must have one, I want at least the arguably effective toolkit of court enforced accountability.
    All of the above is of course far too simplistic, but basically "trustless" means "without accountability" while "distributed ledger" means grossly inefficient - but there might be a version of blockchain that has neither of those and might be worth exploring.
    For instance , if NZ wanted to take a leading role in developing energy efficient CBDC's, or centralised ledger NFTs, those might successfully navigate the rocks in those rapids.
  • Posted by Rialonic October 19, 2021 at 15:20

    Everyone here arguing that "bitcoin doesn't use as much electricity as all the studies say it does" claiming its less than the current banking system, but I'd love to see proof of this at a per-transaction level. Bitcoin uses higher levels of power per transaction by design.

    Not to mention all the mining rigs leading to so, so much e-waste that we have almost no capacity to recycle. Generating enough climate friendly electricity is already a struggle.

    I could get behind @mattwooddev's approach, create an industry that can push a lower power cryptocurrency and use this to drive change and build up the IT sector.
  • Posted by mattwooddev October 21, 2021 at 10:55

    I think @AJ that by being so cynical from the outset as to a relatively new industry like blockchain tech puts us in the position of ultimately being left behind which is what I want to avoid. ​

    There are a lot of things that need to be resolved between the dichotomy of our climate policy and blockchain tech and crypto but that's the point. It shouldn't be easy. We should challenge how the industry works now. By us developing our lens of it we can drive it in a direction we want.

    Why let other nation-states attract the talent and IP that may come with establishing some subset of the industry here? What is the disadvantage in diversifying our talent and industry here in NZ?The industry is not going to disappear and is only going to get bigger. Let's not miss more metaphorical boats and get left behind by the rest of the world and end up not having a voice.
  • Posted by AJ October 25, 2021 at 12:02

    I have to thank you @mattwooddev, I agree this is a really important concept to explore as part of our national digital strategy, and we're going to need to have a really solid understanding of crypto's context and consequences in order to make our strategic decisions about it.

    That said, what you describe as cynicism I'd suggest is simply the result of 20 years of knowledge and evaluation (I mined my first Btc back when it had a market value, iirc, around 48c). You are right of course that the field of crypto is rife with misunderstandings - and you do mention two of the most widespread.

    Crypto is not a new technology - the concept was formally published 20 years ago, and Btc came into being over a decade ago. In digital terms, crypto is positively geriatric.
    Compare that with real tech over the same time period, let's say for instance smartphones: The first iPhone was released pretty much at the same time as Btc, a decade later than the introduction of crypto more generally. Since that release, mobile tech, applications, and industry has exploded - in much of the world, smartphones are now a fundamental piece of daily life, executing on functionality for billions of users; for each user dozens, if not hundreds, of times a day. And this curve just continues to accelerate, with 5G & 6G opening up even more fundamental changes, such as enabling ubiquitous, mobile IoT. That's what a successful digital tech looks like over a ten year timeframe.

    By contrast, what confuses many people about crypto, which can encourage the misunderstanding that it's a new technology, is that during the entirety of its 20 years - despite huge enthusiasm from certain ideologies, and $100's millions being pumped into it - no one has ever found anything it's actually good for.
    No one has even been able to suggest a utility it might one day have, that can't already be done better using not-crypto. I'd suggest this alone should be considered compelling evidence of its intrinsic uselessness: Lots of very smart people have spent an incredibly long time trying to find anything at all it might be useful for, and they've all failed.
    (the possible exceptions to this intrinsic uselessness being extracting cash from FOMO speculators and ransoms from cybercrime victims, providing drug dealers and terrorists with an easy way to move their loot around, and of course supplying persuasive sounding technobabble to pyramid scam operators - I'd suggest none of these should be part of NZ's digital strategy)

    And the second very common misunderstanding is that it's not going anywhere. It's already gone.

    The serious players are already well aware of crypto's catastrophic shortcomings. Authoritarian regimes translate this understanding into direct action: As I'm sure you know, China started with making crypto mining illegal, before making all crypto currency simply flat out illegal just last month. Economically liberal regimes don't have quite as simple time ruling by fiat - but almost all have already signaled their intention to eliminate crypto through both regulating it out of existence, and/or outcompeting it with CBDCs.

    I think you're absolutely correct that having the wisdom to resist the fomo bandwagan will see NZ fall behind in crypto tech: This worries me about as much as NZ falling behind in our tech for manufacturing screen doors for submarines.
    To be realpolitik on this point for second: The more talent, effort, and resource other countries waste in pursuing crypto, the stronger NZ's competitive advantage will be as we focus our resources on digital domains that actually are - or could be - important and useful.
  • Posted by andyhiggs October 26, 2021 at 21:10

    Make no mistake the reason for the latest China crypto ban is to prevent capital flight due to the collateral damage from the Evergrande collapse.

    The global mobility of digital assets is a huge opportunity for NZ to attract investment capital to world's leading demographically favourable test market.

    What is more local player has sequestered 403 tonnes of carbon to offset the energy consumption of public blockchain CENNZnet to support their carbon positive positioning. 'Carbon neutral' is a state that occurs when net greenhouse gas emissions are equal to zero. 'Carbon positive' means going beyond this, making additional 'positive' contributions to the environment. Offsetting more carbon than has been released. This is a world-leading digital innovation from Aotearoa to be celebrated and increasingly well supported by the community.
  • Posted by AJ October 29, 2021 at 14:15

    Sure, but make no mistake about making no mistake: That's exactly what I'm talking about. China hasn't made crypto illegal all of a sudden in response to Evergrande, it's been making it progressively illegal over the last two years. But yes, the timing of this last nail in the coffin is that they're anticipating the chance of a significant shock to their economy (Evergrande, in this case), they've already recognised how much worse crypto would make it (including through the capital flight you mentioned) - so they're getting rid of it before the shock can happen.
    Crypto's impact of hamstringing nation states' ability to respond to economic shocks is exactly why nation states don't want it, and nor - I'd suggest - should anybody who lives inside a nation state economy (i.e. real people).

    And similarly with CENNZnet. I do applaud the intention (assuming of course there's sincerity there and not just a marketing ploy), but there's a reason why the world's climate experts haven't all gone into retirement now that the crypto saviour has arrived. And without wanting to hijack a digital policy board with a bunch of climate science - that's basically because offsetting is not a solution.
    Offsetting is the cure for climate change the same way morphine is the cure for a broken leg: It's not.
    It _is_ potentially useful, under the guidance of an expert medical practitioner and used the absolute minimum amount possible, to serve as a painkiller while you get about the business healing the broken leg. But better yet is never breaking your leg in the first place, and worst of all is deliberately breaking your leg specifically because you're hoping for a shot of morphine.
    If we don't want to break our leg, then we skip crypto - but if you're jonesing for your opium fix, then CENNZnet's your guy.
  • Posted by amevas November 07, 2021 at 08:58


    The idea that crypto is dead is myopic and misguided.

    Crypto is a burgeoning asset class that refers to not only crypto currencies and stablecoins, but also tokens within the blockchain, e.g. utility tokens, security tokens, non-fungible tokens (NFTs)..

    It is ludicrous to pit cryptocurrency against fiat, as if the two were mutually exclusive. Cryptocurrency and fiat can coexist despite their seemingly contradictory purposes. Fiat is state-controlled and inflationary; cryptocurrency is global and deflationary.

    As an aside, China banning crypto was a gift to the rest of the world! It's their loss, and the others' (mostly America's) gain.

    While some "smart people" have their heads buried in the sand, the real smart people in the crypto space have been expanding use cases for crypto assets in the Blockchain, in the form of smart contracts e.g. NFTs, and growing the metaverse framework.

    This is where I believe the creative geniuses in NZ can shine-- to design our own Blockchain or similar infrastructure (e.g. DAGs, hashgraphs), the underlying network protocols and algorithms, the applications that will run on top, even the bridges that will link all applications to each other, as well as to the main network, and to the outside world.

    The possibilities are limited only by the imagination. For a start, I can see smart contracts and NFTs implemented in the health sector, supply chain and delivery services, transportation, driver licensing and IDs, educational certificates and other credentials, etc

    Other countries have already developed or started developing their Blockchain economies, even using sustainable energy sources.. NZ can do no less.

    As @mattwooddev suggested, it is important for NZ to start getting involved in this with a sense of urgency.
  • Posted by Jamesbr100 November 10, 2021 at 11:57

    Rather than focusing on the energy used we should look at what the technology is capable of. I feel we still have some education around blockchain, crypto and IPO's
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