PBOC’s Di Gang: Blockchain Needs A Central Governor
Blockchain needs centralization, a view shared by veteran digital currency researchers from China’s central bank.
Di Gang, deputy head of the digital currency research institute at the People’s Bank of China, said Wednesday in Shanghai that blockchain’s decentralization is embodied in technology, not in governance. And its physical decentralization and logical consistency do not conflict with each other. In his opinion, blockchain should be governed by a central entity.
Likewise, Yao Qian, the PBOC’s digital currency institute lead, stated in an opinion article published by Chinese business news site Yicai in April that abandoning absolute decentralization could solve many of the problems facing blockchain technology.
Di also pointed out four significant challenges of blockchain on Wednesday’s
First, the consensus of technology is not equal to the consensus of business.In other words, blockchain technology will provide multiple parties an opportunity to negotiate, but it is uncertain about the final negotiation outcomes.
Second, the reliability of blockchain is still questionable. Blockchain’s reliability and credibility is extremely important, but if a project is created by an unreliable entity, it may not be trusted by the community.
Third, the complexity and coordination of operating distributed ledges are in urgent need of governance. Besides,a blockchain-governed distributed platform might be introduced soon.
Fourth, the authenticity of asset blockchainization is still needs to be verified, and it should be ensured that the account entries on chain is consistent with the actual amounts.
According to Di, blockchain technology alone cannot solve all the problems, and a mashup architecture is an optimal choice. The role of blockchain is to optimize and supplement the existing architecture.
Although China is stepping up efforts on banning ICO and cryptocurrency-related activities, authorities have been keen on supporting and adopting blockchain. The research department of China’s central bank filed the highest number of blockchain technology across the world last year, according to data from IPRdaily and incoPat. Among the top 100 blockchain patent filing organization, the PBOC topped the list with 68 patent applications related to the technology, followed by Alibaba group with 43 patents.
In addition, Di mentioned in an op-ed on June 5 that the PBOC has completed its initial work on a blockchain-powered system to digitize paper checks, aiming to combat financial fraud and to reduce expenses for printing checks.