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Russia’s Largest Bank is Worried About Blockchain’s Dark Side

October 18, 2016 at 11:03 AM | By Jit Sutradhar News

piano, china

After a flight through the air, my driver’s license bounces a few feet from our table, coming to a stop on the plush carpet of a Shanghai hotel.

Pavel Khodalev, the chief technology officer at Sberbank, smiles. Despite the language gap, the point seems to register. As consumers, we’re free to lose our personal items in the physical world – or in my case, throw them across a hotel lobby – if we choose.

The two of us are in China for International Blockchain Week, and Khodalev has just finished highlighting how his employer, the largest bank in Russia, is exploring applications of the technology. But after six days of non-stop blockchain, our conversation becomes more philosophical, settling on the idea that while the tech is increasingly “open for business”, some still see it as a cipher for societal concerns.

If Khodalev looks at blockchain as “inevitable”, then he argues that so too are the complications its design could have for our societal contract. In this light, the ability to carelessly lose hold of a digital document, he argues, is a development that needs to be managed – and is one that raises questions as blockchain challenges deeply held concepts of financial custodianship.

Khodalev told CoinDesk:

“Our physical world has all these services that must appear in the virtual world. Peer-to-peer relationships are still relationships. I can take your wallet and I can run quickly, but police can stop me. This should appear in the digital world.”

Concerned by my ID, which is still resting on the carpet near the passing feet of hotel guests, Khodalev seems to worry about the sort of change this virtual shift will bring. Perhaps more specifically, his concerns rest on how financial custodians will respond, or be expected to respond, to new kinds of behaviors.

He points to the responsibility that tying a digital asset to identity could bring for consumers, asserting that new safeguards will be needed should the use case proliferate.

“In the physical world, we’re managing these situations, but in the digital world no one knows how to manage this. The scary thing is you would not even know that your identity is stolen,” he continues.

But while he uses the word “scary” often in our conversation, he seems excited by the promise as well, his statements highlighting how, while banks are increasingly keen to try to redesign bitcoin’s technology, they are also having to come to terms with what it enables.

“Blockchain for me is not a revolution that will kill the world, it will break new ground for the world,” he said.

 

Article Source: http://www.coindesk.com

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