Macro-Finance Salon (No. 55) and Fintech Open Classes (No. 2): The Characteristics, Risks and Regulations of Blockchain
2017-04-16 IMI
Starting from the characteristics and principles of blockchain, Dr. Wu introduced the main application, present and future of blockchain in detail, and analyzed its regulation. He pointed out that with distributed data storage, blockchain possesses a high degree of transparency, autonomy and data security. Through decentralization, disintermediation, smart contract and timestamp, a reliable database is established. In terms of specific application, blockchain mainly has government use, civil use, and commercial use. Blockchain includes six levels—application, contract, incentive, consensus, data, and network. In the application level, blockchain is closely linked to the digital economy, Internet governance and big data.
Dr. Wu believes that due to the academic consensus on blockchain,the more frequent application, and the value flow in the strategic level, the blockchain technology has become a hotspot issue in recent years. At present, government departments begin to pay close attention to this technology, develop various guidelines, and establish some research institutions. The relevant departments of the People's Bank of China are also stepping up the research on the frontier areas such as blockchain and electronic money, focusing on the development of the blockchain technology and its future application. Meanwhile, more and more institutions are applying for related patents, and using the technology in specific business.
As a new technology that is not yet mature, blockchain has its own problems. First of all, there is an "impossible triangle" paradox in high efficiency with low energy consumption, decentralization and security. Meanwhile, its size, large power consumption, and broadcast storms may waste lots of resources, and pose a threat to platform security and application security. Dr. Wu suggested that China should seize the opportunity of the blockchain technology, and adopt the "follows strategy" to build a SC / BC alliance. This alliance is in line with the needs of China's financial market, and involves wide participation of commercial banks and various non-bank financial institutions to accelerate the formation of China SC / BC standards. We should notice the risks of the application platform of the blockchain technology, study relevant legal and regulatory system in advance, as well as improve the investor protection mechanism.
