Blockchains stays bullish on ‘Innovation Zones,’ promises economic opportunity to skeptical lawmakers
Gov. Steve Sisolak and Blockchains LLC’s ambitious dreams of a self-governing, high-tech “Innovation Zone” fizzled in the 2021 legislative session, and advocates of the concept are still facing skepticism from legislators across the political spectrum.
State lawmakers on a joint special committee studying the zones met Thursday to probe the contentious proposal, which would give county-level authority to a brick-and-mortar community Blockchains hopes to build in Northern Nevada. A broad coalition of progressives, Republicans, tribal leaders and Storey County officials led Sisolak to drop plans for a bill last session, and hesitance lingered in Thursday’s meeting.
Representatives from Blockchains and other backers laid out a broad overview of the proposal’s potential economic impact, with legislators questioning the need to give a private sector entity the governing powers of a county. A number of attendees also voiced concerns about setting a bad precedent with granting public authority to a single company, while others expressed cautious optimism for possible benefits.
“We hope that over the course of the next four to five months, we’re able to make that case that this is maybe the single-most important idea that we’ve dealt with in our careers,” said Pete Ernaut, a Blockchains lobbyist.
The company hopes to develop a “smart city” over a 75-year timeframe on Storey County land that CEO Jeff Berns previously purchased. Representatives from the company said an “Innovation Zone” would use “hundreds of thousands” of sensors to collect real-time data combined with blockchain technology (decentralized records of digital transactions) to yield highly responsive decision-making.
Jeremy Aguero, principal analyst with Applied Analysis hired by Blockchains, said it is estimated to create $16.4 billion in construction development and provide 123,600 jobs. Aguero also projected that the community’s ongoing operations would lead to $4.6 billion in average annual economic impact and would support 40,300 jobs.
Matthew Digesti, vice president of Blockchains’ regulatory strategy, described what life in the Innovation Zone might look like.
“Innovation Zone residents will own and control their digital identities, engage in peer-to-peer renewable energy transactions, manage all government interactions from a mobile phone, share in public infrastructure revenue, cast real-time votes on hyperlocal community issues, pay taxes in real time, create passive income by monetizing assets, manage and control their medical records, and engage in other use cases that we frankly cannot imagine,” Digesti said.
But legislators expressed some reservations about establishing an “Innovation Zone” and equipping a private company with governing power.
Assemblyman Howard Watts (D-Las Vegas) asked how Blockchains plans to balance trust and transparency with personal privacy. Sen. Mo Denis (D-Las Vegas) sought more clarification on why an “Innovation Zone” had to exist outside of Storey County’s jurisdiction. And Assemblyman P.K. O’Neill (R-Carson City) asked why blockchain technologies couldn’t just be used in Storey County as it exists.
Blockchains representatives said an “Innovation Zone” would make it easier to retrofit existing county buildings and infrastructure, and the technology used throughout the community would be decentralized and encrypted to preserve privacy.
Concerns also persisted over how a new development would affect the environment, including water consumption and the Pyramid Lake Paiute Reservation.
Storey County representatives called in during the meeting’s public comment period, raising pointed questions.
“Why can't Blockchains LLC work within one county — Storey County — known as the most business-friendly, innovative-friendly county, not only in the state, but in the country?” asked Mary Walker, a lobbyist for Storey County.
Storey County Commissioner Clay Mitchell voiced support for the economic opportunity but expressed skepticism about creating a new governing entity.
“I'm quite excited about the opportunities presented here,” Mitchell said. “It leaves me wondering, why haven't the specifics of this idea been presented to the host county first?”