In what could be a world first, a billion-dollar blockchain company donated $500,000 in its own cryptocurrency to help fund the new Advanced Blockchain Research and Development Laboratory at the University of Wyoming.
The University of Wyoming Foundation converted the donation to dollars, thanks to new laws on the Wyoming books that allow it to take donations in cryptocurrency. A former donor who tried to give the University of Wyoming a large donation in bitcoin catalyzed and even lobbied for the law changes.
The donation drew matching funds from the state and required a partial match by the University of Wyoming, ballooning total funding for the lab to more than $1.3 million out of the gate. The donor, IOHK, moved its official headquarters to Wyoming from Colorado in 2019 because of the state’s progressive laws surrounding the worlds of blockchain and cryptocurrency.
“I really love that Wyoming is trying to make my life easier as an entrepreneur,” IOHK co-founder Charles Hoskinson said in a 2019 interview with Wyoming Business Report. “These laws are pretty forward thinking.”
IOHK’s move to Wyoming was done purely by paperwork, and it has no physical presence in the state, despite having 160 contractors and employees spread throughout the world as of 2019.
“Part of their goal is to open an office in Laramie – kind of a ‘skunkworks’ operation here in Laramie,” said Jim Caldwell, the former computer science department head at UW who will co-lead the new lab. “But currently their people are distributed literally all around the planet – it’s insane. When IOHK asked ‘Who wants to move to Laramie?’ nobody raised their hand.”
Finding tech-savvy talent is an ongoing problem in rural Wyoming, but Hoskinson and co-founder Jeremy Wood said in 2019 they planned to open the door to working with UW’s computer science department and later its business school. The basic plan at the time was to create the technology (and talent) in the computer science department, then lean on the business school to help create business models that could capitalize on blockchain technology.
“They’ll grow people out of the UW program here,” Caldwell said. He speculated that the company could end up starting its Wyoming office in the Wyoming Technology Business Center, the University of Wyoming’s startup incubator, and grow its state presence from there.
Since IOHK’s paper-based move to the Cowboy State, the company’s market cap for its in-house cryptocurrency, Ada, has grown about 12.5% to $1.35 billion.
The gift to UW opens up a new kind of collaboration for the university. Many such gifts come with massive strings attached that essentially make the university a talent feeder to the giver of the gift, Caldwell explained. While this collaboration will do that naturally and perhaps push a physical presence in Wyoming, all the research will be open-source, meaning it will be accessible to any company that can see a way to profit from it.
“The intellectual property is as if you were working on a federal grant, for instance,” Caldwell said of the arrangement, calling it a perfect fit. “It makes it closer to the academic model of research. It’s all in the public domain, and it’s free for anyone else to use.”
Cameron Wright, interim dean of the College of Engineering and Applied Science, welcomed the collaboration in a statement.
“This gift will enable students and faculty across multiple departments in the college to work together with IOHK to push the envelope on blockchain technology, including software, hardware and new blockchain applications,” he said.
Caldwell said the research will leverage his theorem proving and software verification to prove the algorithms and protocol while relying on his co-lead, Mike Borowczak, for incorporating and proving hardware.
Borowczak is an assistant professor in the computer science program with similar expertise in blockchain technology, but more experience on the hardware side. The pair will work to expand the university’s expertise with visiting faculty members and talented Ph.D. and postdoctoral students, and even undergrad researchers.
The research will likely focus around integrating blockchain technology to solve world problems. In his 2019 interview with the Business Report, Hoskinson referred to his Ada cryptocurrency as a “third-generation cryptocurrency,” with bitcoin being the first, and Ethereum with its programmability being the second. Hoskinson co-founded Ethereum, but left over a philosophy shift at the company.
His third-generation cryptocurrency and others, he said, are conceptualizing ways to work with established systems at scale to become the “financial operating system for places that don’t have it.”
While IOHK’s projects don’t always serve those ideals – one deal put a line of New Balance shoes on the blockchain so that a simple scan with your phone would reveal if it was a knockoff or real – many projects do.
Caldwell, who will be running the UW lab, pointed to an IOHK project in the Addis Ababa, the capital of Ethiopia.
“They built a system there to let people pay their electric bills using a smart card,” he said. “Before they came in and built this thing, it would take anyone eight hours to pay their electric bill. They’d have to go to the bank and get cash, and maybe the bank didn’t have cash, so they’d go to another bank to get more cash. Then they had to stand in line at the electric company. Now they do it with their phones.”
And that’s just the start of future applications for blockchain technology that could spring out of UW and bolster Wyoming’s technology sector.
“If you look at it – double-entry bookkeeping was invented in the renaissance,” Caldwell said. “I’ve claimed this is first significant technological advance on double entry bookkeeping – a distributed ledger is virtually impossible to go back and change entries in it. That’s a pretty valuable tool that can be used in a lot of applications where you have multiple parties and some kind of agreements where they may not trust each other completely.”