While Canada has delayed its crypto regulation update until 2020, Jimmy Wales (founder of Wikipedia) and General Michael Hayden are joining other prominent leaders in the crypto space at Korea’s Block Seoul event. Could it be the East is winning the blockchain race, attracting the brilliant minds of the West while the Western countries become client states?
Blockchain in South Korea
South Korea is an extremely tech-savvy country that has heavily invested in its internet infrastructure. Samsung and LG have already established themselves as global brands in technology and consumer electronics. Seoul is ranked as the world’s “leading digital city” and a tech capital of the world. South Korea’s top two crypto exchanges (Upbit and Bithumb) are among the top 25 exchanges.
While Korea had its own ICO crackdown, its citizens were already deeply invested in blockchain, contributing to 14 percent of the global crypto market. South Korea lifted the ban later. Korea has taken it even further by potentially integrating blockchain in its voting system.
There is also another boosting factor in Korea: games. The gaming industry is one of the most blockchain-friendly industries. According to Jared Psigoda, CEO of BitGuild, “gamers in particular understand cryptocurrency because virtual money has been a part of gaming for the last 10 years. For example, dating back to World of Warcraft, there was a $100 million market for buying digital gold.”
China is another major player in the crypto-sphere, hosting a substantial share of Bitcoin miners. In 2017, estimates suggested that 50 to 70 percent of all Bitcoin mining took place in that country. Despite strict regulation of cryptocurrencies, China has been significantly more bullish on blockchain. China’s president declared blockchain as “a part of technological revolution” and it is one of the first countries to mention the technology in a state-level policy.
“China is more centralized and top down than the US, but they see the value of the technology,” says Joyce Yang, CEO of Global Coin Research. “In China there are a lot of crypto companies and projects being built, although they are not allowed to market to the citizens, the products are being offered everywhere outside of mainland.” China has more blockchain companies than any other country on Earth.
As Kevin Hobbs, the CEO of The Vanbex Group explains: “Since September 2017 China has banned ICOs, prohibited crypto exchanges and blocked foreign exchanges.” Vanbex is a Canadian company with a great community in China. “That being said I was recently in China at multiple conferences and visiting with multiple blockchain companies and heard nothing but good things about the support the government is giving them. Their work ethic was incredible to see and their belief that blockchain is the future was very evident. I think those countries have a work ethic that gives them a competitive advantage and the ability to move faster to be ahead of the rest.”
Ironically, while some see China as a country of low-quality products, the flaw has actually lead to the birth and acceptance of at least two revolutionary technologies: chatbots and blockchain.
Chatbots were first introduced in WeChat, years ahead of Telegram and Facebook: the reason being numerous product safety scandals. Likewise, numerous counterfeit products have boosted blockchain’s acceptance in supply chains, where it is used to track the products and ensure they are genuine.
Impact of regulations
As regulations and bans kick in, blockchain companies look for safer alternatives. This has turned some territories like Gibraltar and Malta into bases for many ventures and ICOs. Switzerland managed to attract South Korean blockchain platforms ICON and HDAC, while Singapore and Hong Kong took advantage of the bans to become the region’s havens for ICOs and blockchain startups.
Hong Kong is taking blockchain development very seriously, and has announced that the Hong Kong Monetary Authority will be working with some of the biggest banks in the world to spearhead a new blockchain platform that will streamline trade finance.
State of blockchain in the US
While the United States dominated the early days of the internet, blockchains are truly cross-border, with millions around the world participating. While the US slowly tiptoes on the technology, rival governments are investing heavily in blockchain research and development. Ultimately, they may monopolize the industry and set their own standards, leaving the US to play catch up.
But, many still look at blockchain with skepticism. As an executive at a Wall Street firm who had been trying to position itself as a leader in the technology puts it, “[blockchain] became a solution in search of a problem.” Vermont was considering blockchain-based public recordkeeping, but a report found that a switch would have high costs and “very limited possible benefits.”
It seems that the US has already fallen behind the blockchain development curve. “The US generally moves slower, as there are not many bodies in the government who understand crypto, and the policymakers want to be more careful in approaching something they don’t understand,” explains Joyce Yang. “And frankly, I think out of all currencies out there, crypto and non-crypto, Bitcoin is the biggest threat to the global power and influence of the US dollar.”
*This post is credited to Entrepreneur.