September 21, 2021
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Blockchain, or distributed ledger technology (DLT), is a tamper-evident and tamper-resistant digital ledger.
This new and rising technology that enables direct transactions within a ledger doesn’t need a central authority or a third party.
Still, when considering the potential benefits of blockchain, companies should also realise that there are certain risks. Many of the risks become amplified when news of hacks or scams are reported.
Coin Rivet spoke with Ankur Banerjee – the co-founder and the CTO of well-known data network Cheqd – regarding the latest wave of cybercrimes that have swept the crypto community.
“I think that the aspect of how the governments are trying to regulate cryptocurrencies and the blockchains is really interesting,” he says.
“Because let’s be real, when you have blockchain projects around the world, it is very hard to find jurisdiction.”
He added that, what often happens, is that the laws of one country – the US, for example – have particularly strong regulations and sanctions.
What we often see, Banerjee noted, are minimum standards, but also the challenges for the regulators.
“The angle that a lot of blockchain regulations tend to take is to try and monitor the money that goes in and out from the state,” he said.
He also added that there are some governments that are “quite forward-thinking” regarding the whole blockchain space. For example, he mentioned European Union development a blockchain framework.
“They have been developing EU central bank digital currency that could be used in all of the EU countries,” he stated.
Money washing is one of the main challenges
Banerjee also added that, across the world, there is a lot of interest within the government agencies which want to understand new technology.
When talking about scams, Banerjee said the challenge that governments are facing is money washing.
“There was a lot of volatility in the crypto world and a lot of websites connected to the industry just crashed,” he says.
“There was this lawsuit in the US where lots of people wanted to sue Binance. However, there is no data about where Binance is registered.
“A lot of blockchain projects are just going under the radar because they don’t have scallions and that is why it is hard for the governments to regulate it.
When talking about regulation, Banerjee noted that all should be involved, meaning politicians, mathematicians and economists altogether.
“However I think technologists are the crucial part of ‘the crew’ since they are building these new platforms and new systems,” he said.
“However, they are usually not involved,” he said.
Money can be traced even in crypto
Banerjee also reflected on the recent scandal with the PolyNetwork.
“The scandal was massive,” he said
“That was a really big heist but there are tons of big companies such as Chainnalysis who can immediately trace your money flow.
“Also if you have that amount of money and you want to change it to fiat, that means you need to be identified somehow.”
Referencing the 2016 Bangladesh Bank cyber heist, Banerjee explained that traditional systems were prone to volatility.
“A couple of years ago, Bangladesh Bank got hacked and the hackers stole around one billion dollars,” he explained.
“The reason why the hack was not detected for three days was that the hackers timed it perfectly.
“They managed to transfer the money from Bangladesh to the Federal Reserve Bank, so different time zones. And, it was a weekend as well.
“This is the perfect example of how the traditional banking system can be volatile as well. I can not imagine that this happens with crypto because everything works even during weekends and, yes, it is traceable.
“I think the anonymity is amazing but I also think that the aspects of the traceability sometimes are way better than the traditional banking system.”
Ankur is an engineering and product management leader with deep expertise in digital identity and decentralised systems. He has a solid background in software development innovation as a co-inventor on multiple patent-pending solutions.
Cheqd is building the payment rails for authentic data. The company said it wants to “make it as easy as possible to create authentic data ecosystems through customisable commercial models and governance structures, all built upon a public permissionless network with a dedicated token for payment”.
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