University of Pennsylvania: If blockchain overcomes security and regulatory issues, it will be implemented and commercialized in 2017

Analysts at the University of Pennsylvania, one of the world's top private research universities and one of the eight famous Ivy League schools, believe that the blockchain hype is not over. The university said that if developers and companies can successfully overcome regulatory and security barriers in the coming months, we may see blockchain implementation and commercialization in 2017.

dead end

Banks, financial institutions and multi-billion dollar corporate giants are grappling with the various conflicts that arise during the implementation phase of blockchain, such as regulatory and security issues.

In order to comply with financial policy and money transfer regulations, banks or other financial institutions must maintain control over the network, regardless of the cryptographic or technical attributes of the network. Because Bitcoin is decentralized in nature, banks will work hard to remove the decentralized nature when trying to utilize Bitcoin's underlying technology, thereby retaining control over the transactions and other operations of the network.

But this often proves to be a dead end for all entities experimenting with blockchain technology, which either have to create a permissioned or centralized blockchain and compromise on security, or develop an immutable decentralized blockchain platform and refuse to comply with regulations.

The traditional financial industry is a heavily regulated market. There are strict regulations and policies in this industry to ensure that funds are not used for illegal purposes and any criminal activities. Failure to comply with regulations may result in hundreds of millions of dollars in fines, such as the recent mortgage fraud case of Deutsche Bank, which has agreed to pay a fine of $7.2 billion.

Blockchain or database?

The blockchain industry is currently receiving funding from venture capital firms, banks, financial institutions, angel investors and large technology companies, all of which believe that blockchain technology has great potential. However, blockchain is still in its early stages, so startups or entities seeking to utilize blockchain technology should ask themselves whether they are looking at a database technology or an immutable blockchain platform.

Tyler Mulvihill, head of blockchain startup Consensys, told Penn:

“Blockchain use case or database use case? If you have a lot of internal information that you need to store, and you don’t have a lot of transactions with a lot of vendors, and you don’t have a lot of people using your information or doing business with you, then databases are a good fit for a lot of things.”