Blockchain expertise is all about decentralization and virtualization. So it’s just a little ironic that people love to come back collectively in particular person at massive blockchain occasions. Such was the case final week in Seoul, the place a document 17,000 folks and 300 audio system got here collectively for Korea Blockchain Week.
Like conventional tech conferences, the occasion featured a variety of massive names in the subject, each the high-profile (Vitalik Buterin, Richard Teng of Binance, and Mark Karpeles amongst them) and the no-profile (researchers, professors, and plenty of founders of latest startups).
Unlike regular confabs, you additionally bought the ha-profile: apes, penguins, geese, and bears had been additionally on the listing.
No one would ever accuse the crypto world of missing merry pranksters. But all the identical, there remained a robust undercurrent of unease in the crowd. Mainstream adoption seems to have stalled, and with the U.S. elections developing, there’s a massive query mark over what regulation will seem like going ahead.
We walked the halls of the occasion, and chatted with plenty of attendees. Here are a few of our impressions:
Beyond the protocols
Historically, scalability has been a serious situation for blockchains with excessive charges and sluggish transaction speeds. Now, second-layer blockchains (so-called “layer-2 blockchains”) have made transactions each quicker and cheaper, which means scalability is now not a problem for many use instances. The hottest layer-2 blockchains can deal with tens of millions of transactions per day with none hiccup.
But regardless of that, utilization isn’t essentially selecting up, partly as a result of we stay in a sort of software vacuum.
“I think the expectations for real application content have significantly increased,” mentioned Simon Kim, CEO of Hashed, a enterprise capital agency specializing in blockchain and crypto. Speaking to Ztoog, Simon highlighted a necessity for extra sensible use instances.
There are some glimmers of that beginning to emerge, particularly in the world of IP content material monitoring. Last month, Story raised $80 million to construct a blockchain to assist IP homeowners monitor utilization of their content material extra successfully. And Sony Block Solutions Labs, a three way partnership shaped by Sony and Startale Labs, unveiled its new public blockchain community, Soneium, that guarantees to make it simpler for customers to guard creators’ rights and share income pretty.
“These are the industry’s first attempts at creating a content-focused IP ecosystem,” Simon mentioned.
Others at the present mentioned they had been searching for extra real-world functions that customers might grasp.
“For the past six years, we’ve developed various infrastructure — roads and highways — in the crypto world. Now, we need to focus on things people enjoy or use such as convenience stores, clothing stores, and department stores,” in line with Steve Lee, co-founder of Neoclassic Capital, a Miami-based crypto funding agency backed by enterprise capitalists Marc Andreessen, Chris Dixon, and Tampa Bay Lightning proprietor Jeff Vinik.
The agency, because it occurs, focuses on functions in shopper and monetary companies. “From a consumer perspective, we are particularly bullish on use cases in gaming IP, entertainment, and social applications,” he mentioned.
Neoclassic launched its first fund in April, and the agency goals to pursue extra funding alternatives in these sectors. “While the West may continue to lead in infrastructure development, we view Asia as having greater potential for these [web3 consumer use cases] compared to the West,” he mentioned, citing the excessive quantity of bitcoin buying and selling in the area and its monitor document in areas like gaming and leisure. Countries like Japan and Korea, he mentioned, “have been leaders in adopting new technologies faster than any other country in the world.”
Old-school with a aspect of crypto?
While some crypto firms are nonetheless searching for breakthrough successes, others try to persuade conventional enterprises that they need to add a crypto twist to their current merchandise.
Justin Kim, head of Asia at Ava Labs, a blockchain platform centered on decentralized apps (“dApps”) and enterprise blockchain deployments, famous that extra organizations are launching their very own customized blockchains on high of Avalanche.
“The list includes California DMV, Konami Digital Entertainment, Nexon MapleStory Universe, OtherWorld’s Solo Leveling animation, and financial institutions such as JP Morgan and Citi,” he mentioned.
Tokenizing new asset courses can be a latest development, Justin added. For instance, Republic, a New York-based funding platform, is tokenizing funds to help movie financing. IT consulting agency Questry and Japanese financial institution Mizuho Securities are tokenizing a fund to help animated content material manufacturing. Justin famous that each initiatives are primarily based on the Avalanche platform.
Stablecoins are additionally making their method into mainstream monetary and messaging apps.
One notable improvement has been PayPal introducing a stablecoin known as PYUSD and different messaging apps like Japanese Line and Telegram integrating crypto wallets. Naver, a part-owner of Line, additionally lately launched a crypto pockets inside its fee app in Korea. “Stablecoin] trading activity is picking up,” Simon mentioned.
Hashed collaborates with different conventional firms resembling Korean leisure firm HYBE, Japan-headquartered gaming firm Nexon, monetary establishments KB Kookmin Bank in South Korea, and Siam Commercial Bank in Thailand, Simon mentioned.
Another space that’s drawing consideration from the business, he identified, is the gaming area. The gaming business is one in all the fastest-growing sectors, significantly with the enhance in on-line transactions, Simon added.
“So there’s content, and then the AAA games are going to start pouring out of the market later this year,” Simon mentioned. In the previous, blockchain-based video games with experimental tokens or NFT possession had been launched whereas nonetheless in the experimental section. “Now, well-made, high-quality games are coming out.”
Yat Siu, co-founder and govt chairman of Animoca Brands, a Hong Kong-based recreation and software program firm that additionally operates a web3 VC agency, disagreed, saying that gaming initiatives, which have principally been launch pads for tokens, to date haven’t carried out that effectively.
“People are not excited about [gaming] right now, but I think we will come back,” Siu mentioned.
In the identical method, NFTs aren’t grabbing folks’s consideration at the second, however boosters nonetheless have hope.
“Back in the early days, when people didn’t see the internet as interesting or real, they just kept building it, and eventually it just grew, right? That’s pretty much how I see the [NFT] space as well,” Siu added.
Big backers, and larger regional forces
In 2023, lower- and middle-income nations had been driving cryptocurrency adoption; this 12 months, adoption is unfold extra evenly between richer and poorer nations, mentioned Diederik van Wersch, regional director of ASEAN and Hong Kong at blockchain information platform Chainalysis.
“The mainstream adoption of cryptocurrency could be a result of the launch of Bitcoin ETFs, which triggered an increase in the total value of Bitcoin activity across all regions,” van Wersch instructed Ztoog.
In retaining with that, establishments are facilitating the adoption of cryptocurrency in nations resembling Singapore and Indonesia, he mentioned. The U.S. adopted an analogous sample. When the U.S launched a Bitcoin ETF, Siu mentioned it was a step change for the market.
“Tokens that have institutional backing tend to do better. That’s how things are shaping up for crypto moving forward,” Siu mentioned.
“In Singapore, we’re seeing a rise in the use of crypto merchant services, while in Indonesia, crypto is being used as a trading instrument and has become one of the fastest-growing crypto markets in the region with the highest year-over-year growth at nearly 200%,” van Wersch mentioned.
That’s not all excellent news: As extra folks undertake it, there’ll probably be extra crime, he added. “As adoption grows, so will crime. And today, crypto is encompassing all types of crime — including fraud and narcotics.”
Bullish on Telegram’s future (regardless of Durov’s arrest)
The arrest of Telegram founder Pavel Durov in France final month positively led to an aftershock for the Telegram-linked Toncoin, which slumped in worth in the wake of the information. But by the time KBW rolled round only a week later, the temper was buoyant.
Rushi Manche, co-founder of Movement Labs, instructed Ztoog that Telegram had turn out to be a helpful communication software for a lot of in the crypto neighborhood, and that was not more likely to change in the brief time period.
“What happened to Pavel Durov and what’s happening with Telegram and TON is proof that decentralization is working quite well. Despite the fact that Pavel was arrested, everything was still working,” Siu instructed Ztoog. “I would say it’s a net positive and, to me, shows the resilience and strength of decentralization and the benefits of running something on the blockchain. So I’m long-term bullish on TON and Telegram.”
Animoca Brands is an investor in TON, the blockchain that’s deeply built-in into the messaging app.
Simon acknowledged one takeaway from the incident: It highlighted how new laws have to be created to handle these digital areas independently, as a result of there aren’t any bodily borders in the digital world and states can’t management what’s on the web.
Regulation stays a serious hurdle
Regulation repeatedly got here up as the largest concern amongst folks we spoke to at KBW, and never simply amongst these working in Asian crypto, however these from different areas, too.
“Until a few years ago, many blockchain builders had established their headquarters in Singapore,” Simon mentioned. “Most recently, the UAE has emerged as the most industry-friendly country, providing clear regulations and guidelines within the nation.”
Regulations — and particularly the clear institution of sunshine regulation — have formed the place improvement has thrived.
“The main concern we hear is the need for regulatory clarity across different Asian jurisdictions,” mentioned Manche of Movement Labs. “However, this is driving a push for more coherent, innovation-friendly policies. Regulatory clarity should improve globally, potentially accelerating institutional adoption. We also foresee a focus on sustainable blockchain solutions and innovative token economics.”
A lot of it has been piecemeal, nonetheless. Japan was the first mover on this area, and Singapore began early, too, with a light-touch regime centered on anti-money laundering (AML) and countering the financing of terrorism (CFT), in line with Chengyi Ong, head of coverage for the APAC area at Chainalysis. Then Hong Kong and India adopted swimsuit with their very own regulatory framework. “And that’s how we ended up with a regulatory patchwork,” she mentioned.
The U.S. election in November might be a second when a few of this lastly involves a head in that nation. “Depending on who wins, this industry will accelerate faster. But I think crypto will grow in America regardless,” Siu mentioned. “This is not an endorsement, by the way.”