New technology is a "double-edged sword": tap the potential of the blockchain and be alert to multiple potential risks

Original: Central Broadcasting Network

General Secretary Xi Jinping emphasized during the eighteenth collective study of the Political Bureau of the CPC Central Committee that "we must strengthen the guidance and standardization of blockchain technology" and "implement the rule of law network in blockchain management to promote the security of blockchain Order development. "

At present, the blockchain is still in the early stages of accelerated development, and the technology and application prospects are broad, but the risks cannot be ignored.

Beware of investment risks

He Ping, a professor in the Department of Finance at the School of Economics and Management at Tsinghua University and the head of the China Financial Research Center, revealed that the blockchain industry is gaining momentum and new companies are constantly pouring into the track. "Some of the track participants did not really understand what distributed storage is, nor did they understand how blockchain promotes the promotion of business models. Over-investment is one of the risks currently facing the blockchain industry."

In particular, the illegal and illegal items packaged as investment targets under the concept of the blockchain have brought harm to society.

On August 28, 2018, the China Banking Regulatory Commission, the Central Office of the Internet, the Ministry of Public Security, the People's Bank of China, and the State Administration of Market Supervision and Administration jointly issued the "Reminder on Preventing Risks of Illegal Fund Raising in the Name of" Virtual Currency "and" Blockchain "" The risk reminder mentioned that some criminals, under the banner of "financial innovation" and "blockchain", absorbed funds by issuing so-called "virtual currencies", "virtual assets", and "digital assets", infringing on the legitimate rights and interests of the public.

If the application of blockchain technology cannot bring positive benefits to society, it is not a good project. He Ping agrees with this view, "There is always a risk. Investors should be cautious and carefully screen many blockchain projects."

Beware of financial risks

He Ping emphasized that there are endless scams in the market with the concept of blockchain, and the financial risks caused by them cannot be ignored. Regarding violations of laws and regulations, the regulators must strictly enforce the law, punish the front and back and prevent Ponzi schemes.

Yang Dong, director of the Big Data Blockchain and Regulatory Science and Technology Laboratory of Renmin University of China, introduced that technological innovation will bring quantitative and qualitative risk. He gave an example: Fintech will significantly reduce the connection costs between the providers of funds and the demanders, but the hidden, sudden, contagious and negative externalities of financial risks will not disappear.

"Not only that, financial, technological and cyber risks are more likely to have overlapping and converging effects, making the risk pass faster and more widespread, and it is more prominent in the aspects of technical risk, operational risk and systemic risk." Yang Dong said.

Yang Dong also said that the blockchain is merging with different technologies, the boundary between the real world and the virtual world is being blurred, and the risks it has caused in the field of fintech have slowly been reflected.

Beware of regulatory risks

Yang Dong believes that in response to the rapid development of the blockchain industry, traditional regulatory models have been weak in response, and various risks caused by information asymmetry have become increasingly prominent.

Yang Dong pointed out that the changes of science and technology are changing with each passing day, so that the fact-based supervision path is overwhelming for managers, and the urgency of supervision will make data identification more difficult.

"In an era of frequent, complex, and disruptive innovation, identifying regulatory targets, timing and methods is not easy."

At the legal level, Yang Dong believes that there is a certain lag in the development of the blockchain industry through traditional regulatory laws, which is particularly evident in the financial field of blockchain technology applications.

"Overall principles tend to summarize lesson-type legislation after the fact. Such traditional prudential and behavioral supervision principles, concepts, and even theories cannot effectively respond to the rapid development of new formats such as fintech." Yang Dong said.

Beware of technical risks

According to the "Blockchain White Paper (2019)" issued by the China Academy of Information and Communications Technology, the number of applications for open blockchain patents globally has reached more than 18,000, with China accounting for more than half of the total, ranking first in the world.

The white paper also shows that, in terms of patent authorization, although China currently has the largest number of blockchain patent applications, it is mostly at the examination stage, and most of the authorized patents are utility models and marginal patents.

As of the end of 2018, 771 patents for blockchain inventions were granted worldwide, and only 53 in China.

Zhou Ping, director of the Software Engineering and Evaluation Center of China Electronics Technology Standardization Institute, believes that there are multiple risk points at the technical level of blockchain. Openness and transparency and immutability are the main characteristics of the blockchain. With the development of technology, new privacy protection risks cannot be ignored. In addition, many current blockchain applications are mainly based on the improvement and improvement of foreign open source technologies. There is a risk of interconnection and interconnection in large-scale applications, and it is possible to form many new information islands and even to be technically controlled by others. In addition, we must prevent overheated investments in blockchain infrastructure to avoid wasting resources.

How regulation is scientific and effective

With the increasing popularity and application of blockchain technology, in addition to the technical level of regulation, the regulatory level of laws and policies has become more and more urgent.

Yang Dong said that in the face of new problems brought about by new technologies, it is imperative to break through the traditional regulatory dimension, make full use of the opportunities brought by science and technology, and resolve the "circle of chaos" in supervision to effectively control risks while promoting innovation.

"Science and technology have profoundly affected the law and governance system. Adhering to the combination of science and technology governance and legal governance is an effective way to reshape the regulatory capabilities." Yang Dong said that the impact of blockchain is not only on the restructuring of productivity and technology, but also It touches the level of production relations and the level of rules, and affects the distribution mechanism and the pattern of benefits.

In response to scientific and effective supervision, Li Ming, director of the Blockchain Research Office of the China Electronics Standardization Institute, believes that relevant departments should establish a sound regulatory system, use laws and regulations to clarify the main responsibility, use policies to guide the direction, and manage and control technological risks with science and technology. At the same time, explore targeted supervision methods and methods to manage network, hardware, software, and information-related service providers.

Yang Dong also believes that regulators should actively explore the application of blockchain, promote the development of this technology in an orderly manner, and reduce the risks brought by the technology.