Blockchain, a technology that underpins cryptocurrencies, has substantial potential to transform financial industry and other businesses across the world. Advances and applications of blockchain technology is therefore particularly relevant to Hong Kong, which has a large financial sector (18% of Gross Domestic Product; 6% of employment), coupled with government's determination in developing Hong Kong into a FinTech hub of the region, leveraging especially on the latest Guangdong-Hong Kong-Macau Greater Bay Area initiatives. Moreover, blockchain technology can also be applied beyond e-trading to various domains such as healthcare, logistics, governance and identity management, thus bringing transformative effects on society as a whole.
Officiating at the opening ceremony of the Joint Laboratory on 26 Mach, Dr. David Chung, Under Secretary for Innovation and Technology, stated: "The advancement of Hong Kong as a leading blockchain development centre requires concerted efforts from the industry, academia and the Government. Positioning itself as the leading research and technology advancement centre in Asia-Pacific in the focused areas of blockchain and cryptocurrency, I am confident that the joint laboratory will help foster the development of these technologies in Hong Kong."
Ir. Professor Alex Wai, Vice President ofResearch Development at PolyU, said the University is in the leading role of blockchain and cryptocurrency research in the Greater Bay Area. "By joining hands with Monash University and Collinstar Capital, we will continue to drive the advancement in blockchain ecosystem. Through this collaboration, PolyU is devoted in making the cyberspace safer, more convenient and effective for business and financial services. We believe this collaboration will make influential change to the way of business and our living in the future."
Blockchain technology builds an open distributed ledger through a peer-to-peer network, where digital information is recorded as block, linked in chain, and secured by cryptography, with user identity being protected. Since digital records are verified by every node (computer user) in the network, any inconsistency appears in the blocks will be detected, hence data modification is inherently impossible. The innovative features, which enable comprehensive, effective and inalterable record, make blockchain a highly desirable tool for financial transactions, identity management, and complicated logistics process management such as tracking of goods, food, drugs, etc.
Despite enormous development prospect, blockchain technology has been facing rising challenges in privacy leakage, control against misuses, hacking security threats, etc. The challenges will accelerate in leaps and bounds, in face of attacks by powerful quantum computers, which may become sophisticated for real application within a decade.
PolyU's research team led by Dr. Allen Au, Assistant Professor of Department of Computing, will work on enhancing the efficiency of blockchain technology while addressing two key areas of concerns: privacy and security.
Dr. Au said the team will enhance technologies such as Linkable Ring Signatures system and Zero-knowledge Proof system, which enable efficient proving of the validity of online transactions without leaking private information, such as user identity, transaction amount and account balance. They will also develop protection systems that can be operated on today's computers, yet secured against attacks from quantum computers.
To enhance accountability measures against misuse of cryptocurrency, e.g. money laundering, ransom payment request, while still safeguarding anonymity and authenticity, the team will also develop mechanisms for introducing measures such as setting spending/transfer limit, revealing identity under court order, suspending accounts involved in suspicious transactions, etc. Yet, the extent of striking balance between "accountability" and "privacy protection" will be matters to be agreed among the parties concerned. These measures are also applicable to other types of blockchain operations and transactions beyond cryptocurrencies.