By Patrick Monaghan
Unless you've been trapped under a heavy object for the past year or so, you've probably heard something about blockchain and cryptocurrencies such as bitcoin.
Stories abound about bitcoin billionaires and millionaires being minted overnight, and much of the media coverage to date focuses solely on the risks and opportunities presented to crypto investors (most of them widows and orphans, apparently), rather than the tech itself.
But the potentially disruptive applications of blockchain technology extend far beyond cryptocurrency speculation, and unique social and technical characteristics of the local market endow Korea with a sustainable competitive advantage to lead blockchain's evolution and growth.
Assuming Korean regulators can balance the need for prudent oversight with pro-market growth policies, blockchain can very easily be the next hallyu (Korean wave) at a time when Korea desperately needs it.
To truly appreciate the opportunity, a review of blockchain's features is in order. Simply put, blockchain is a continuously growing ledger of records (blocks) which are linked together using cryptology.
The addition of a new block to the blockchain is made via the use of public and private keys by a network participant, and any change is first subject to the approval of a substantial majority of all other network participants in what is called a "consensus protocol"; without a consensus confirming the authenticity of a blockchain transaction, it will be rejected; once a block is added, it cannot be changed.
Each new block contains a record of all prior blockchain transactions; the requirement to include the ledger of prior transactions, and the use of encryption keys, means that the perpetration of hacking or fraud schemes on the blockchain is essentially impossible.
Like a digital Gordian knot, the blockchain gets tougher and tougher to crack as new blocks are added, offering its users security and privacy in a world desperate for both.
While many of these use cases have universal appeal, blockchain is particularly well-suited for Korea. If Korea, as expected, continues to follow the growth curve taken by middle-income countries that have grown richer and older with time, the FIRE (finance, insurance and real estate) industries will become increasingly important sectors of the economy.
A failure to align costs with rewards will lead to the widening inequality, resentment and social unrest seen in the West in recent decades, where a handful of overpaid intermediaries in these industries have gotten richer while their countrymen grew poorer.
Koreans, in particular, will be eager to accept and further the trustless blockchain revolution as an affirmation of the Korean public's widely held suspicion towards institutional control, and eliminates the traditional role of transactional "middlemen" (lawyers, bankers, brokers and other agents).
With the reliability and inviolability of blockchain protocols to resolve disputes, no longer will "might make right" in Korea, where selected individuals with access to money and power have seemingly always been able to perpetuate injustice at the expense of the less wealthy or well-connected.
Future blockchain protocols can also tackle stubborn and seemingly intractable threats to citizens' quality of life on the peninsula, including pollution, supply chain logistics and traffic congestion, and lead to exportable and scalable solutions of Korean design that the rest of the world will admire, purchase and emulate.
A deep talent pool of tech entrepreneurs, a highly tech savvy and mobile population and affordable electricity supply (essential for crypto mining) also help to place Korea in the category of potential blockchain global leader, but seizing the opportunity requires public support and private persistence.
The rise of China has undermined the supremacy and now threatens the very survival of Korea's historical economic growth engines like consumer electronics, chemicals, shipbuilding, steel and autos.
Given the size of the opportunity in front of it, it is critical that the Moon administration, working in partnership with the private sector, identify and formulate thoughtful pro-growth policies to cement Korea's standing as a shaper of the blockchain industry worldwide.
The author is a director and chief legal officer at Metaps+, a leading mobile e-commerce and blockchain development company in Asia, based in Seoul. He can be reached at patrick.monaghan@metaps-plus.com.
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Stories abound about bitcoin billionaires and millionaires being minted overnight, and much of the media coverage to date focuses solely on the risks and opportunities presented to crypto investors (most of them widows and orphans, apparently), rather than the tech itself.
But the potentially disruptive applications of blockchain technology extend far beyond cryptocurrency speculation, and unique social and technical characteristics of the local market endow Korea with a sustainable competitive advantage to lead blockchain's evolution and growth.
Assuming Korean regulators can balance the need for prudent oversight with pro-market growth policies, blockchain can very easily be the next hallyu (Korean wave) at a time when Korea desperately needs it.
To truly appreciate the opportunity, a review of blockchain's features is in order. Simply put, blockchain is a continuously growing ledger of records (blocks) which are linked together using cryptology.
The addition of a new block to the blockchain is made via the use of public and private keys by a network participant, and any change is first subject to the approval of a substantial majority of all other network participants in what is called a "consensus protocol"; without a consensus confirming the authenticity of a blockchain transaction, it will be rejected; once a block is added, it cannot be changed.
Each new block contains a record of all prior blockchain transactions; the requirement to include the ledger of prior transactions, and the use of encryption keys, means that the perpetration of hacking or fraud schemes on the blockchain is essentially impossible.
Like a digital Gordian knot, the blockchain gets tougher and tougher to crack as new blocks are added, offering its users security and privacy in a world desperate for both.
While many of these use cases have universal appeal, blockchain is particularly well-suited for Korea. If Korea, as expected, continues to follow the growth curve taken by middle-income countries that have grown richer and older with time, the FIRE (finance, insurance and real estate) industries will become increasingly important sectors of the economy.
A failure to align costs with rewards will lead to the widening inequality, resentment and social unrest seen in the West in recent decades, where a handful of overpaid intermediaries in these industries have gotten richer while their countrymen grew poorer.
Koreans, in particular, will be eager to accept and further the trustless blockchain revolution as an affirmation of the Korean public's widely held suspicion towards institutional control, and eliminates the traditional role of transactional "middlemen" (lawyers, bankers, brokers and other agents).
With the reliability and inviolability of blockchain protocols to resolve disputes, no longer will "might make right" in Korea, where selected individuals with access to money and power have seemingly always been able to perpetuate injustice at the expense of the less wealthy or well-connected.
Future blockchain protocols can also tackle stubborn and seemingly intractable threats to citizens' quality of life on the peninsula, including pollution, supply chain logistics and traffic congestion, and lead to exportable and scalable solutions of Korean design that the rest of the world will admire, purchase and emulate.
A deep talent pool of tech entrepreneurs, a highly tech savvy and mobile population and affordable electricity supply (essential for crypto mining) also help to place Korea in the category of potential blockchain global leader, but seizing the opportunity requires public support and private persistence.
The rise of China has undermined the supremacy and now threatens the very survival of Korea's historical economic growth engines like consumer electronics, chemicals, shipbuilding, steel and autos.
Given the size of the opportunity in front of it, it is critical that the Moon administration, working in partnership with the private sector, identify and formulate thoughtful pro-growth policies to cement Korea's standing as a shaper of the blockchain industry worldwide.
The author is a director and chief legal officer at Metaps+, a leading mobile e-commerce and blockchain development company in Asia, based in Seoul. He can be reached at patrick.monaghan@metaps-plus.com.
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