Buddhist monks who live in Brooklyn’s hipster-filled Greenpoint neighborhood have been known to make their own Bitcoins. Likewise, a 23-year-old high school dropout is living in a tiny room in his family’s Queens home to create a business that’s “cornering the market in cryptocurrency”. And New York’s rookie governor, a Bay State former businessman who’s opening up the state’s doors to business, is throwing the metaphorical red carpet on a whole cluster of blockchain-focused startups.
The state’s leaders are jumping on the blockchain bandwagon because blockchain is just the right mix of technology with a specific mission, says Molly Swan, an assistant professor of business at Suffolk University in Boston.
“Banks have a mandate to ensure the security of financial transactions,” she says. “Fintech startups want to reduce costs and do it faster and cheaper than any of the [other] applications. Blockchain can do that and more.”
State government may be the perfect catch for this nascent world of “ledger technology”, she says, because it’s a mix of tech and politics. “It’s not just the technological viability of blockchain, but also the political viability of it.”
In particular, NYC is a platform for fintech startups, says Enzo Vaz, the CEO of Forward Ventures, a co-working and incubator space in Flatiron District New York City.
“Most of our flagship participants are Fintech startups or regional banks,” he says. “You have to have a face in New York [to succeed]. It’s very important that New York has a ecosystem for fintech.”
Governor Cuomo has announced $100 million in state investment in fintech firms and on 11 August, Governor Cuomo declared that 10% of state lottery sales and all state tax revenues collected in December and January would be allocated to fintech startups.
By being innovative and putting a finger in the fast-changing Bitcoin pie, New York could meet the aggressive and growing demand for fintech solutions by its current and future businesses.
Bored by the banking system and looking for a better alternative, New York’s entrepreneurs decided to invest in blockchain technology, says Gyrin Stone, the CEO of Betawave, a blockchain-centric educational web service.
“Everyone is looking to solve these interlocking problems that are growing,” he says. “When they finally find one or two [programs] that work, everyone takes notice. Fintech seems to be the next big [option] and people are taking notice.”
Born on the blockchain
The New York blockchain boom comes in the wake of widespread investment in the sector by global firms, such as Apple, Google, Amazon, Facebook, Pfizer, IBM, Lyft, PayPal, Uber, and Visa.
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Major operators are already jumping in. In 2017, Lai and his fellow bitcoin enthusiasts built PayCash, a cash-releasing payment system for bitcoin users. PayCash has been working on financial services since 2016 when it started serving the food delivery and delivery-piggyback industries, especially in the food-delivery category.
Like similar financial institutions, PayCash is agnostic about bitcoin.
“We view all cryptocurrency as equal,” says Benny Lin, the CEO and founder of PayCash. “It’s definitely a greater solution for the fact that some apps require you to input your card number. I think we’re getting there with PayCash.”
Lin and his PayCash team have sold itself as a “banking software company on the blockchain” to major banks.
It’s a valuable description, says Deirdre Cappelli, a research fellow at the Centre for Effective Organizations at the University of Warwick in Coventry, UK. “They need a bank to open their bank account,” she says. “They need a bank to accept crypto-currency as currency. This is more real-world than just working at a blockchain tech start-up. It’s valuable in how they are selling themselves, branding themselves and getting funding.”
Governor Cuomo hasn’t put his money where his mouth is with his allocation, however. “Governor Cuomo has set aside the allocated funds, but he’s in the minority,” says Randall Smith, the executive director of the Blockchain New York PAC. “The most traditional banks such as Bank of America, Wells Fargo, and TD Bank have not adopted this new technology. However, along with numerous startups, they will likely adopt, if for no other reason than to stay on the cutting edge.”
Other blockchain takeaways
More interesting blockchain startups can thrive in other industries, Swan adds. “They really allow developers to get their teeth into more