Officials with Griffin Blockchain Services, Inc., a blockchain group that plans to operate out of the old AmerisourceBergen building in downtown Paducah, gave a presentation Thursday on the basics of blockchain technology and how it ties into the fast-growing cryptocurrency market.
About 50 people attended the seminar hosted by the Paducah Area Chamber of Commerce. Blockchain and cryptocurrency knowledge among the crowd ranged from the novice level still deciphering the two terms to some who were running their own small-scale cryptocurrency mining operation.
Qianjie “QJ” Zhao and Dennis Zhang, CEO and CFO of Griffin Blockchain Services, also shared insight about their company and what drew them to Paducah.
Zhang said he hopes business owners and entrepreneurs learned how they could apply blockchain technology to better their businesses.
“I think it’s important, for whatever business you’re in, to think about how, you know, ‘how [could] my business take advantage of this new technology?’ and how it could potentially benefit you,” Zhang said.
Zhang explained that blockchain is a digitally distributed ledger that stores information such as transaction records. Rather than data being stored with one centralized ledger, blockchain data are stored on a network of computers.
Because blockchains are stored on multiple networks, Zhang said it is close to impossible to hack blockchains. If a hacker accesses a blockchain on one computer, there would still be multiple, possibly millions of copies, of the correct blockchain stored on other networks.
Blockchain technology and its decentralized nature is commonly used with cryptocurrency such as Bitcoin, Zhang said. Blockchains keep track of the transactions of Bitcoins among different users. Without a centralized location such as a bank for transactions to go through, cryptocurrency users can bypass a middleman and transfer funds directly with each other, Zhang said.
Because of its ability to leave digital trails, Zhang said blockchain technology could also be used outside of cryptocurrency. For example, blockchains could be used to show a person who donates to charity exactly where the money is headed and how a donation is being used, Zhang said.
Zhao described the basic process of mining for Bitcoin and why the company is interested in investing in it. Computer systems solve a series of complex equations to “mine” Bitcoins. Miners then get rewards for mining the Bitcoins, and also get a portion of sales from future Bitcoin transactions, Zhao said.
Zhao said there are only 21 million Bitcoins in existence, and about 20 million have already been mined. Mining the remaining Bitcoins is a process that could take over a century to complete, and requires large-scale, energy-consuming computer systems to do so. Zhao said Griffin would like the facility to use up to 40 megawatts in order to operate their mining operation.
In an effort to draw more cryptocurrency companies to the state, Kentucky enacted a law in 2021 granting sales tax and use tax exemptions on commercial property and electricity used by blockchain companies for the purposes of cryptocurrency mining. Gov. Andy Beshear also signed a bill in 2021 that extends clean-energy incentives for corporations to large-scale cryptocurrency facilities.
Zhang said Griffin Blockchain Services looked at a few different locations in the United States to build its headquarters but ultimately chose to start in Paducah because the state is crypto-friendly, local regulations would help their business and there is an “abundant” supply of electricity and land for the business.
Zhao said Griffin Blockchain Services plans to start its mining operation at the old AmerisourceBergen building in March.