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As Blockchain Technology Travels the Hype Cycle, South Korea Takes the Lead

Many times, the only silver linings to tragedies or hardships are the lessons learned and conclusions drawn that eventually lead to a better future. For instance, the decade that followed the great depression of 1929 is considered by historians as the most technologically progressive in the 20th century.

Likewise, the financial crisis of 2008 is said to have accelerated the development and adoption of blockchain technology and cryptocurrencies. When Bitcoin was introduced in 2009, most people had lost hope in the traditional centralized institutions, given their role in the crisis, and many were looking for an alternative to the current systems. This suspicion of established financial institutions is what has ignited blockchain alternatives and continues to spur on blockchain innovation.  

As decentralization follows its path from hyped solution to mainstream staple, one Eastern hub in particular offers lessons for the rest of the world.

The Life Cycle of Technological Innovation

For any new technology to gain mass adoption, it must pass through various stages. According to the Hype Cycle theory by Gartner, there are five such stages.

The innovation trigger phase involves a potential technological breakthrough, proof of concept and significant media interest. Often, no usable product exists at this stage and commercial viability is usually unproven. At the peak of inflated expectations, a few success stories emerge, arousing further public interest. However, many innovations do not get past this phase.

The disillusionment stage often involves declining interest as the technology fails to meet inflated expectations. It is at this stage that unsustainable technologies fail and the sustainable ones are improved to maximize the satisfaction of early adopters.

During the slope of enlightenment, use cases start to become apparent and more widely understood with further funding and investment poured into the projects.

Finally, the technology reaches a plateau of productivity, a stage characterized by mass adoption. At this stage, broad market applicability and relevance have already been identified and the company, as well as the product, is successful.

Where Do Blockchains Come In?

Looking at blockchain technology through the lens of the Hype Cycle theory, we find it currently on the slope of enlightenment. Satoshi Nakamoto, the pseudonymous party behind Bitcoin, published a paper in 2009 detailing how blockchain technology could be used to enable peer-to-peer transactions.

From inception until 2013, the technology was in the innovation stage, with little use cases and lukewarm media coverage. The peak of inflated expectations gained momentum from 2014 until late 2017 when the price of most cryptocurrencies reached an all-time high.

However, in 2018, we are seeing dissipating interest, as is evident in the trough of disillusionment stage, with regulators entering the crypto space and most cryptocurrencies losing at least half of their value. For all those who believed in the value of the technology rather than the get-rich-quick crypto market, entering the productivity stage is a welcomed development. With mainstream acceptance, regulators getting involved and innovators who believe in the technology now in the space, blockchain technology is closer to development and mass adoption than ever before.  

South Korea Is Leading Blockchain Adoption

The most exciting thing about South Korea as a global blockchain hub is the speed at which it has gone through the Hype Cycle. While most countries are still grappling with regulatory confusion, South Korea is in the final stages of introducing regulatory guidelines for blockchain technology in the areas of cryptocurrencies and initial coin offerings (ICOs). 

The Korean National Assembly has been very adamant on the removal of ICO banning and the setup of new governance systems to systematically develop blockchain policies and provide support to firms working with the technology.

Likewise, the blockchain community in the country is very active, engaging global thought leaders in various industries, discussing blockchain applications and hosting blockchain awareness events.

For instance, in September of this year, the country will host one of the world’s largest blockchain conferences of its kind, featuring over 40 speakers from the corporate and legal arena. The three-day event is known as Block Seoul and will include presentations from notable figures such as Jimmy Wales, the founder of Wikipedia, and Michael Hayden, a former director of the CIA.

And this is not the first global blockchain conference the country is hosting. Beyond Blocks, one of the most active South Korean blockchain communities, has been organizing such events across Asia.

One thing that has enabled South Korea to make great strides in blockchain technology is its investment in research and development.

Just a few months ago, the South Korean government announced a $200 million investment in blockchain research. While most governments across the world have expressed interest in the technology, very few have taken such significant steps.

Also, the lawmakers in South Korea are very vocal about new technologies and have been on the front line in advocating for innovation-friendly regulation. In countries such as the U.S. and the U.K., most lawmakers get involved only to threaten crippling regulations, even when they do not understand the technology.

Another great thing about South Korea’s technology approach is its proactive blockchain and crypto community, which organizes global summits to discuss the pertinent issues facing the technology and involve participants from across the globe. The openness to a global audience brings in new ideas while cementing the role of the country as a global blockchain leader.

For blockchain technology to reach mass adoption faster, countries must be ready to invest in research and development and implement regulations that encourage innovation. Lawmakers must take some pages from South Korea 's book and start implementing change.

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