New technology is a ＂double-edged sword＂： tapping the potential of blockchain and being alert to various potential risks.

　　During the 18th collective study in the Political Bureau of the Communist Party of China (CPC) Central Committee, General Secretary of the Supreme Leader emphasized that "we should strengthen the guidance and standardization of blockchain technology" and "we should implement the rule of law in the management of blockchain and promote the safe and orderly development of blockchain".

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

　　Beware of investment risks

　　He Ping, a professor of finance at Tsinghua University Institute of Economics and Management and director of China Financial Research Center, revealed that the blockchain industry is booming and new enterprises are constantly pouring into the track. "Some track participants don’t really understand what distributed storage is, and they don’t understand how blockchain can promote business model improvement. Over-investment is one of the risks currently facing the blockchain industry. "

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

　　On August 28, 2018, China Banking and Insurance Regulatory Commission, the Central Network Information Office, the Ministry of Public Security, the People’s Bank of China and the State Administration of Market Supervision jointly issued the Risk Warning on Preventing Illegal Fund Raising in the Name of Virtual Currency and Blockchain. It is mentioned in the risk warning that some lawless elements have issued so-called virtual currency, virtual assets and digital assets under the banner of financial innovation and blockchain.

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

　　Beware of financial risks

　　He Ping emphasized that fraudulent acts with the concept of blockchain emerge in an endless stream in the market, and the financial risks caused by it cannot be ignored. For violations of laws and regulations, regulators should strictly enforce the law, learn from past mistakes, and prevent Ponzi schemes from appearing.

　　Yang Dong, director of the Big Data Blockchain and Supervision Science and Technology Laboratory of China Renmin University, said that technological innovation will bring quantitative risk and qualitative risk. For example, he said, financial technology will greatly reduce the connection cost between fund providers and demanders, but the characteristics of financial risks such as concealment, suddenness, contagion and negative externalities will not disappear.

　　"Not only that, financial, technical and network risks are more prone to superposition and aggregation effects, which make risks spread faster and wider, and are more prominent in technical risks, operational risks and systemic risks." Yang Dong said.

　　Yang Dong also said that the blockchain is being integrated with different technologies, and the boundary between the real world and the virtual world is being blurred, and the risks caused by it in the field of financial technology have gradually emerged.

　　Beware of regulatory risks

　　Yang Dong believes that in view of the rapid development of the blockchain industry, the traditional regulatory model is weak, and various risks brought about by information asymmetry are increasingly prominent.

　　Yang Dong pointed out that the rapid changes in science and technology make the fact-based supervision path overwhelming managers, and the urgency of supervision will make data identification more difficult.

　　"In an era of changeable, complex and destructive innovations, it is not easy to determine the regulatory targets, regulatory timing and regulatory methods."

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

　　"On the whole, the principle of supervision tends to sum up lessons afterwards. The principles, concepts and even theories of such traditional prudential supervision and behavioral supervision cannot effectively cope with the rapid development of new formats such as financial technology." Yang Dong said.

　　Beware of technical risks

　　The "Blockchain White Paper (2019)" issued by China Institute of Information and Communication shows that the number of applications for open blockchain patents in the world is as high as 18,000, with China accounting for more than half, ranking first in the world.

　　The white paper also shows that in terms of patent authorization, although the number of blockchain patent applications in China ranks first at present, most of them are in the review stage, and most of the authorized patents are utility model and marginal patents.

　　By the end of 2018, 771 blockchain invention patents were authorized in the world, and only 53 in China.

　　Zhou Ping, director of the Software Engineering and Evaluation Center of China Institute of Electronic Technology Standardization, believes that there are many risk points in blockchain technology. Openness, transparency and non-tampering are the main characteristics of 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 upgrading of foreign open source technologies. Large-scale applications have the risk of interconnection, which may form many new information islands and may even be technically controlled by people. In addition, it is necessary to prevent overheating investment in blockchain infrastructure to avoid waste of resources.

　　How to supervise scientifically and effectively?

　　With the popularization and application of blockchain technology, in addition to technical supervision, legal and policy supervision has become more and more urgent.

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

　　"Science and technology have profoundly affected the legal and governance system, and adhering to the combination of science and technology governance and legal governance is an effective way to reshape the regulatory capacity." Yang Dong said that the impact of blockchain lies not only in the reconstruction of productivity and technology, but also in the level of production relations and rules, affecting the distribution mechanism of interests and the pattern of interests.

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

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