Li Lihui, former president of the Bank of China: Blockchain is good but has new risks

Baozou Comment : Blockchain is developing rapidly, and more and more problems are exposed, and its potential risks are still unknown. But at present, as a representative of new technologies, the existing prevention and control measures based on big data centers are far from satisfying the risk control of new technologies such as blockchain. It is necessary to develop new risk control technologies and emergency measures for new technical structures.

Author: Amber Dingding

Recently, Li Lihui, former president of the Bank of China and leader of the blockchain research working group of the China Internet Finance Association, attended the 6th Shanghai New Finance Annual Conference and the 3rd Internet Finance Bund Summit, and delivered a keynote speech on blockchain titled "Linking Finance, Linking the Future". Regarding the current development of blockchain, Li Lihui said that its investment prospects should be cautiously optimistic and there should be a large space in the future. With the development of blockchain, the potential risks of blockchain technology applications have also begun to be exposed. New technologies have new characteristics, and risk management and control must adapt to new technical structures.

Li Lihui, who has been in the financial industry for many years, responded to the question of whether blockchain can be applied to real-world scenarios. Blockchain is an application technology that conforms to the modern lifestyle. Its own smart contract function can be applied to the maintenance and execution of contractual relationships and contractual principles. For bill supervision, the blockchain technology can build digital bills, which may realize the specific restrictions of commercial agreements through programmable smart contracts, introduce regulatory control nodes, and confirm transactions by all parties to the transaction to ensure the uniqueness of value exchange. In addition, the distributed, timestamping and asymmetric encryption functions of blockchain can be applied to information query, verification and protection of information privacy.

Li Lihui has such unique insights on the development of blockchain. He said that the development of blockchain has formed a trend, but it is still in the starting stage. IT giants have begun to deploy blockchain. For example, IBM has participated in the investment of blockchain companies such as DAH, jointly developed the HyperLedger plan with the world's largest open source community Linux, and created a blockchain innovation center; in addition, Microsoft deployed blockchain basic tools on the cloud platform Azure and launched the world's first BaaS service. Financial institutions jointly conduct blockchain research, for example, the R3 Alliance, the world's largest distributed ledger technology alliance with more than 50 members. At the same time, it has also attracted the attention of officials from various countries. However, for investment in the blockchain field, we must maintain a cautious and optimistic attitude, as there is more room for development in the future.

The rapid development of blockchain has also brought many problems. In response, Li Lihui said that blockchain technology seems to make complex economic life simpler, but at the same time, the potential risks of blockchain technology applications have also begun to be exposed. For example, in May this year, TheDAO, a crowdfunding project that had just completed the world's largest crowdfunding record and raised $150 million, was hacked on June 17 this year, and 60 million US dollars worth of Ethereum was hijacked, which attracted widespread attention from the outside world. The final solution to this problem is mainly through hard forks, which set the time back to before the attack, so that the hijacked funds can be returned to the initial investor's account. Although blockchain technology is good, it also has risks. The reliability of smart contracts must also be professionally and authoritatively reviewed and identified to prevent loopholes in advance.

For high-tech, we must pay attention to the risk of technological monopoly and technical operation. If someone monopolizes some high-end technologies such as smart contract programming in the blockchain, he may set some traps in it. Or because your technical level is not high enough, there may be some loopholes when you set up the programming, which may be attacked and misappropriated afterwards to form technical loopholes that may be exploited. It is necessary to build a technical firewall that can prevent moral risks. In the application of blockchain technology in different scenarios, the security, stability and reliability of core programming such as smart contracts, timestamps and keys must be deeply analyzed and authoritatively certified. In addition, there is currently no risk management and control that is compatible with new technologies. The existing prevention and control measures based on the big data center are far from meeting the needs of blockchain technology. New risk control technologies and emergency measures should be developed for new technical structures.