By Jung Joo-yong
Chairman of Chainers
For the past half a year, we witnessed sharp ups and downs in bitcoin prices. Wild gyration in the prices of cryptocurrencies drew attention from both investors and regulators.
But what we should monitor is not just the sudden ups and downs of virtual currencies. We should know blockchain technology is to remove brokers and intermediaries in transactions. American and Chinese pioneers in blockchain have been working day and night to use the technology in the future.
Despite government regulations and many problems involving cryptocurrency exchange, Korea has been fast-moving to compete with China in the emerging Asian blockchain industry.
Global investors and experts gathered at the Chainers 2018 that I hosted in Seoul in July. In the global blockchain event, many foreign participants highly praised Korea as being an emerging center of the global blockchain industry. In other words, foreigners are more optimistic than Koreans about Seoul’s potential for becoming a blockchain hub in the world.
Five million Koreans, mostly in the 20s and 30s, are investors in virtual currencies. It means that 10 percent of South Koreans are investing in cryptocurrencies, higher than any other country in the world. Old generation downgrades them as speculators. But I think differently.
When you click blockchain in YouTube, Naver and other portal sites, these young Korean investors share their ideas and analysis on the blockchain. No non-Korean young people are not so active as these young Koreans in the blockchain information sharing. Even a Korean university student’s study on blockchain was translated into English and googled several thousand times outside Korea.
Korea’s core asset is people. It was Korean experts who have upgraded the domestic manufacturing, semiconductors, Internet and bio industry to the globally competitive level. I firmly believe that these young Koreans will pioneer the emerging blockchain industry. We should not downplay their role and potential.
For the past one to two years, Korea has produced an unprecedented amount of globally competitive content on the blockchain. We should not underestimate the contribution of these young Koreans in producing such precious materials on the blockchain.
Speed of blockchain industry
The blockchain industry is more than ten times faster than the other sectors. It takes seven years for startups to redeem investment but blockchain startups cannot succeed unless their projects turn profitable in six months. Koreans are noted for their “Ppalli, Palli” (hurry-up culture). The blockchain is fit for Koreans who enjoy the hurry-up culture,
Problems facing blockchain
The blockchain industry is at an infant stage. So many problematic issues are popping up. The centralized cryptocurrency exchange is under attack for being a hotbed of hackers and speculators. In due course, I expect the virtual currency exchanges will be decentralized,
ICO
Many ethical questions arose about initial coin offerings (ICOs). Many criticized ICOs for being a tool for speculators. But such criticism is inevitable at its immature stage.
Many blockchain projects managers are now strengthening internal compliance control and publishing quarterly audited financial reports to make ICO-generated funds transparently managed. Without such internal balance and check, they cannot secure funds to finance megaprojects. I believe Korea will also introduce such self-regulatory internal control mechanism.
Competitiveness of blockchain
In a nutshell, blockchain must prove it is more competitive than other traditional industries. It is meaningless for blockchain businesspeople to compete with each other.
Blockchain will become more competitive than ever if its fundamental goal of removing brokers and agents from transactions is realized. Fairness, transparency, and decentralization are the core competitive concepts of the blockchain. Blockchain will grow exponentially if brokers and intermediaries become meaningless in a transaction.
Such countries as the United States and China began to use blockchain in finance, advertising, and data analysis. Korea should also be proactive in promoting extensive use of blockchain in the economy.
Bold deregulation key to success
Blockchain provides enormous opportunity for Korea’s another economic takeoff. Its technology must be used to upgrade Korea’s people-oriented and content-centered industrial structure.
The government must make a critical choice whether to foster or regulate the blockchain industry. Korean startup companies should be encouraged to create a new global market through blockchain.
Regulators should not criminalize ICO and cryptocurrency investors. Young Koreans should be given an opportunity to realize their dream on the global stage through blockchain knowhow.
Blockchain has no intermediaries and national boundaries. Koreans can maximize their imagination to create profitable global blockchain projects.
