IBM awarded $738K contract to create blockchain system for Delaware

Source: Coin Geek, originally published on .

IBM will continue its push deeper into the blockchain with a recently-awarded deal from the state of Delaware. According to Delaware Online, the software giant has been tapped to design a prototype of a blockchain-based filing system for the state in a deal worth $738,000. The system will be geared towards corporations, which contribute over 25% of the revenue earned by the state.

Citing the safety of technology, Delaware blockchain advocates pushed for the system, which will allow Maryland’s eastern neighbor to charge more in document filing fees. The move would also allow the documents to be updated and changed electronically, eliminating the possibility of human errors.

Delaware has over 1 million registered corporations in the state and 64% of all Fortune 500 companies. The state has been at the forefront of blockchain adoption, led in part by Jack Markell, the former governor. Speaking at a conference in 2016, he told investors and entrepreneurs that using the blockchain could potentially allow for billions of dollars to be used for other services by removing technical procedures, reducing business risks and speeding up asset exchanges.

IBM’s prototype will be a precursor to a complete system that could be launched after the prototype testing is complete. The system will be used to decide how best to incorporate the technology into business administration in the state.

Delaware Deputy Secretary of State Kristopher Knight compared IBM to an architect who designs a skyscraper before construction begins. IBM was awarded the contract without contest or open bids due to an existing consulting agreement between the company and the state. Knight pointed out that this was a cost-saving measure, as governments have routinely launched projects that ended up costing twice as much because of improper planning. In theory, IBM’s contract prevents any cost overruns.

Despite the positive remarks, Delaware already lost $49,000 this year in a separate deal with IBM. The company was paid the money to consult on a project introduced by blockchain startup Symbiont, but that deal eventually fizzled out.

Other blockchain companies need to pay attention to the progress of this prototype. If everything goes well and Delaware decides to move forward, it has already said that IBM would not build the final system. That responsibility could be offered to another bidder.

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