Popularity of blockchain raises security concerns

More efforts are needed to ensure security in people's digital assets, as blockchain technology overcomes initial skepticism and begins to move into the mainstream, experts said.

Li Ming, a blockchain expert at the China Electronics Standardization Institute, which is affiliated with China's top industry regulator, the Ministry of Industry and Information Technology, said blockchain, as a fundamental technology to underpin cryptocurrencies, is a digital ledger in which transactions are recorded chronologically and publicly.

The role of blockchain is to maximize the value of data. As data grows, the value surges. Such valuable data can be regarded as valuable assets, Li added.

His comments came as initial applications of blockchain are emerging in a wide range of sectors including finance, e-commerce and logistics. In August, a restaurant in Shenzhen issued China's first electronic invoice based on blockchain technology, which can help consumers apply for reimbursement in seconds.

Blockchain's hallmark is decentralization. Data can be shared among a distributed network of computers with no need for middlemen. Once recorded in a blockchain-based ledger, data is hard to tamper with.

With the growing popularity of blockchain, however, also come new cybersecurity threats. According to a report by internet giant Tencent Holdings Ltd, over 54 security breach incidents have occurred in cryptocurrencies markets from 2013 to the first half of 2018. Financial losses caused by such digital accidents exceeded $2.7 billion from January to June this year alone.

Jiang Changhao, chief technology officer of Cobo, a Beijing-based company that offers leading cryptocurrency wallet solution Cobo Wallet, said consumers' digital assets will grow rapidly and they will be able to manage everything of themselves through their digital wallets.

"A unique token, for instance, will become a consumer's symbol, through which others can recognize the consumer's identity without knowing his or her detailed personal information. Such prospect will greatly boost the liquidity of digital assets and the efficiency of transactions," Jiang said.