TRENTON, N.J. – Corporations in the state are now legally permitted to maintain records on an electronic network, including those using blockchain technology – the digital ledger invented for keeping track of the cryptocurrency Bitcoin.
On Tuesday, Gov. Phil Murphy signed legislation (A1178), sponsored by Assemblyman Christopher DePhillips and Assemblywoman BettyLou DeCroce, clarifying that New Jersey corporations may use the technology to simplify recordkeeping requirements.
“We need to use the technology at our disposal to ensure our information is safe,” said DePhillips (R-Bergen). “Permitting companies to use blockchain not only helps protect the company’s data but allows for full transparency of that data. Large companies like Microsoft and Walmart have embraced this technology and we need to make this available to all companies, not just big box stores.”
Blockchain is a type of distributed ledger or decentralized database that keeps records of digital transactions. It works like a chain of digital blocks that contain records of transactions. Each block is connected to those before and behind it, making it difficult to tamper with because a hacker would need to change the block containing that record and all those linked to it to avoid detection.
“Blockchain technology has been used for much more than just cryptocurrency, and it’s time New Jersey recognizes its versatility so companies can maintain more secure records,” DeCroce said. (R-Morris). “We need to modernize our business practices so that we can keep up with current best practices.”
Blockchains are kept in peer-to-peer networks that are continually updated and kept in synchronization. Records are secured through cryptography and participants have their own private keys that act as personal digital signatures. Each bitcoin is digitally signed each time it travels from one owner to the next.
Lawmakers formed a task force last session to study how blockchain can be used for government recordkeeping and service delivery.