At the end of an extremely dynamic year for crypto, Forbes requested I do a wrap up of 2017 and offer my 2 cents about 2018. Most of what I wrote is echoing leaders in the ecosystem. While they spoke for their particular locale, I gleaned what I could and added snippets of endless conversations I had with various people as well as takeaways from this year. It’s been a year of unimaginable growth and I’m humbled by where we are at the end of 2017.
Top 5 Moments of 2017:
1) Cryptocurrency goes viral in Korea: 6-10% of the population is investing crypto, 2 Korean exchanges in the world’s top 10 with Bithumb consistently placing in top 1 in terms of trading volume.
2) Exchanges fiasco: Increased traffic during peak trading prices take regularly take exchange servers down, kimchi premium as high as 50%.
3) Government regulation starts crackdown on cryptocurrency and ICOs as mining/ICO scams (Bitcoin Platinum, Mining Max), and suspicion of insider trading by exchanges increase.
4) Yongsan Electronics Market and PC bang transform into mining farms and GPU prices skyrocket.
5) Major corporations begin to actively take interest in utilizing blockchain technology.
How did/will they affect you or the industry?
1) In stark contrast with the high trading volume, knowledge behind cryptocurrency or the underlying technology is nascent. The world as a whole is poorly introduced to cryptocurrency and especially in Korea free and easily-accessible education is URGENT if a healthy crypto trading ecosystem is to emerge. Efforts must be made to arm and empower the average crypto user with quality knowledge to protect his/herself over government oversight.
2) It really spurred the government to take regulatory action. Also the government is probably very concerned about the unregulated arbitrage market.
3) Before the rush of middle school, high school, university students to invest in cryptocurrency, the market had a very large population of people over 50+ years old who had money to spare. They were more susceptible to misinformation due to unfamiliarity with technology.
4) It’s incredible to think that a gaming powerhouse with all it’s GPU can one day transform into legions of miners. High demand for GPUs left very few in circulation or sold with a high premium. As a result the gaming community does not view the mining community with fondness.
5) 2018 will be an interesting year as it’ll prove whether the excitement surrounding blockchain on the peninsula is real or hype.
What’s your outlook for the scene in 2018?
The situation in Korea is unique because although not a third world country, the close-knit nature of its people and expats brought cryptocurrency mainstream in 2017. However, speculation, not everyday use, brought this boom and without a production-ready killer app, Korea may take a real hit if the market becomes bearish in 2018. Korea’s biggest obstacle to crypto being used everyday is its cutting-edge financial infrastructure and without crypto proving itself to have desirable properties over current financial infrastructure, the hype surrounding crypto can deflate anytime.
While institutional investors are eager to invest and the government eager to regulate, the surge of crypto was completely unexpected and caught everyone in and outside the industry off guard with people now playing catch up. There is a danger where decisions made hastily without consideration of future ramifications can really hurt open innovation of blockchain in Korea for years to come. Everyone has heard of bitcoin but there are few who truly understand the disruptive power this technology enables. More effort to study this technology with a long-term state of mind should go hand-in-hand with a short-term mentality to become wealthy off of trading.
From outside Korea, the massive interest surrounding cryptocurrency and blockchain is fascinating, but inside misinformation such as “Bitcoin is anonymous and it is used by pornographers, terrorist, drug dealers, and criminals” permeate the media. Good, quality education is urgent and it should not manifest itself in hagwons, certifications, and lectures for crypto/blockchain which encourage mediocre, standardized understanding. As this is a brand new field, attempts to push the envelope to explore the limits of this technology at a core fundamental level needs to be encouraged over consumer-protection regulatory oversight. Investing in deep understanding and education at a burgeoning stage will payoff massively in the long run and may secure Korea as a future blockchain and cryptocurrency leader.