The Chairman of the U.S. Securities and Exchange Commission expects that in the next two years, financial markets will migrate to blockchain technology. Let's take a look at the pros and cons of financial on-chain.

The potential advantages of on-chain financial markets include:

1. Efficiency and cost can achieve near real-time settlement, significantly reducing the manpower and time costs of clearing, reconciliation, and other intermediary processes.

2. All transaction records are immutable and traceable, greatly enhancing audit and regulatory efficiency, and reducing fraud risks.

3. Security and regulation Cryptographic technology and distributed storage make it difficult to be attacked or tampered with at a single point, improving system resilience.

Risks and challenges faced:

1. The transaction throughput (TPS) and system performance of existing blockchain technology still need to be improved to support massive financial transactions.

2. The authenticity of data before going on-chain is difficult to guarantee automatically, requiring supporting mechanisms for verification; otherwise, it will be "garbage in, garbage out."

3. The responsibility for private key management shifts to the users themselves, increasing the risk of loss or theft; new types of network attacks and threats like 51% attacks still exist.

Summary:

Overall, the migration of financial markets to blockchain primarily seeks higher efficiency, lower costs, and new business models. This is a process filled with both opportunities and risks. As the SEC Chairman stated, the responsibility of regulatory agencies is to set "common-sense guardrails" rather than stifle innovation. Currently, it appears that through continuous technological iteration and a robust regulatory framework, these security challenges are being systematically addressed and resolved.