PBoC Researcher Touts More Centralized Approach to Blockchain

Giving up absolute decentralization could solve many of the problems facing blockchain technology, according to Yao Qian, the People's Bank of China's digital currency research lead.

In an opinion article, published by Chinese business news site Yicai on Friday, Yao summarized the current state of development of bitcoin and blockchain technology and offered his view on how the future of the tech should play out.

While praising blockchain's key features of traceability and smart contract functionality, the research director restated his belief that blockchain's current bottleneck lies in how to achieve greater scalability while maintaining consensus with well-established community governance.

With that in mind, Yao wrote that the industry shouldn't be too rigid in sticking to fully decentralized governance, instead arguing for a more flexible approach.

The research director said:

A major issue with decentralization in public blockchains, he continued, is that there is no way to pause or shut down the system when facing an emergency requiring technological updates.

For instance, he argued that The DAO project, which experienced a notorious hack in 2016 due to coding bugs in its ethereum smart contracts, exposed a problem where decentralized systems must resolve technological issues through what he called "chaotic" hard or soft forks.

As such, Yao envisioned that an alliance of blockchains forming a non-centralized network, with each acting as a center of control, as a viable way for blockchain technology to grow in future – something he said is necessary for risk control and technological changes.

Yao's remarks align with statements made by other executives from China's central bank around its potential use of blockchain technology, including developing a state digital currency.

As reported by CoinDesk, at a high level, both Yao and the PBoC's vice governor Fan Yifan have previously expressed the belief that, while a central bank-issued digital currency could be inspired by cryptocurrency, it would be centrally managed and only visible to the government.

PBoC image via Shutterstock