Leading the Future: Korea’s Role & Opportunities in Blockchain and Web3 | KBW2023

[Music] Yes, hello. I am Seojun Kim, CEO of Hashed. Many of you must be very worried these days. When a bear market continues for more than a year, there is always a saying that comes up: "Bitcoin is dead." It is said that over the past 12 years, coins have been declared dead more than 70 times.

Along with this, rumors are constantly circulating that the blockchain industry and the web industry have collapsed. So, what is the truth? In fact, the number of active wallet addresses has steadily increased over the past decade or so, regardless of bull or bear markets. The influx of new blockchain developers is becoming steeper every year, more open-source blockchain projects are being launched, and more academic papers related to blockchain are being published. Overall, the blockchain industry and ecosystem are still growing.

The problem is merely that prices dropped due to macros; this is proof that the ecosystem is growing healthily. It is said that the number of people holding virtual assets has already passed [a certain threshold]. If we look back at this in the history of the internet's growth, it is likened to around 1998. Let's go back to that time and think about it. To popularize the blockchain industry now, just as the internet flourished after 1998...

So, what elements are necessary? For the internet industry to develop, the advancement of infrastructure technologies—such as technical standards like TCP and the World Wide Web—was a prerequisite. Similarly, for the web industry, blockchain protocols and middleware tools for developers must develop first. In fact, until now, this infrastructure has been led by the West, such as the United States and Europe. Then, where is the strategic key to fill the remaining gap?

I believe it will be Asia. Asia is already leading the consumer and developer markets quantitatively. Asia holds a 60% share of the virtual asset market, and the proportion of KYC-certified users on centralized exchanges reaches approximately 40%. Last year, it accounted for a whopping 60% of new developers registered on GitHub. We believe that within Asia, the turning point that will accelerate the popularization of the web industry will be right here in Korea.

How is that possible? Korea, where we are located, is a small nation but possesses leading energy. Its land area ranks only 108th in the world. Its population ranks slightly higher at 29th. Its GDP ranks a bit higher at 13th, and its global trade volume is...

It has reached the sixth stage. There are several unique characteristics of Korea's web industry. There is the globally famous "Kimchi Premium," and the Korean market is renowned for leading the bull market in 2017. Furthermore, even to this day, the Korean market often leads the price volatility of the altcoin market. Additionally, Korea is the world's second-largest market for centralized exchange traffic.

So, how did such a large consumer base and ecosystem enthusiastic about virtual and digital assets develop in Korea? Historically, Korea has built the world's fastest internet network since 1999. Smartphone penetration has reached 97%, and household internet penetration is virtually 100%. This digitally oriented environment has become the driving force behind the creation of numerous inventions in the digital economy. The Kingdom of the Winds, the world's first graphic online MMO RPG game, was released in 1997.

At that time, other countries excluding Korea had almost no high-speed internet, making it difficult to operate services beyond the text-based search we are familiar with on Google. However, in Korea, a game was created that could build a virtual space capable of processing large-capacity images and real-time animations. As you can see on the screen now, even acts such as holding a wedding ceremony in this virtual space have been possible. There was an innovative culture that began in 1997. Also, Freechal, the world's first avatar-based social platform, was launched in 1999.

It could be considered the predecessor to the PFPs popular these days. The world's first esports league, the Craft League, was established in 1999. What you see on the screen right now is the Pro League finals held in Gwangalli; I remember it being a huge success with over 100,000 people gathered. In 2001, ItemBay, the world's first exchange for game cash and game items, appeared. This business model can actually be described as the predecessor to all virtual asset exchanges and NFT exchanges.

It is certainly no coincidence that the founder of ItemBay is also the founder of Bithumb. I mentioned that the internet developed very rapidly in Korea; if we compare the time when high-speed internet was introduced in Korea with the time when internet speeds in the United States began to rise, we can see a clear difference. As you can see, Korea is a country that has experienced the digital economy about 10 years ahead of other nations. This internet speed If we integrate the difference in experience, I believe that is precisely the legacy of Korea's digital culture. This is the reason why, while people in their 30s and 40s in other Western countries have experience as digital natives, those in their 50s and 60s in Korea possess this experience.

In fact, in the Korean virtual asset market, trading volume by people in their 40s and 60s accounts for more than half. In the game industry, which can be considered the core of the digital economy, Korea plays a leading role in both content creation and consumption. It has popularized many famous titles worldwide, such as Dungeons & Dragons, MapleStory, and Battlegrounds, and holds the position of the world's second-highest revenue per capita and a leading position in the global revenue market. Above all, most Korean game developers have already established web studios and are actively making various preparations to introduce themselves into the web market. Furthermore, pop music, which many foreigners here are likely to enjoy, is becoming the new standard of the global music industry.

There is already a global K-pop fandom of over 100 million people, and pop is the fastest-growing industry in the world, with an annual growth rate of 45%. The K-pop fandom market, which recently reached approximately $16 billion in 2021, has been about 10 years It is predicted to grow significantly, reaching a staggering $330 billion by 2030, having grown nearly 20-fold over time. The pop market is already adopting Web 3. Modus has launched Ple, the world's first decentralized idol group. Ple is the world's first idol group where fans directly manage governance using NFT, allowing them to personally select title tracks or unit groups.

HYBE, the agency behind BTS, has launched a platform called "S" for collecting idol photo cards in collaboration with Dunamu, the operator of Upbit. Large corporations are scrambling to launch NFT memberships. From retailers to commerce and financial institutions, a vast number of major companies are competitively pursuing NFT businesses, leading the popularization of Web 3 business. The Korean government and regulatory authorities recently announced guidelines regarding the issuance and distribution of Security Tokens (STOs). Unlike its cautious stance on virtual assets, the government has expressed a strong determination to support the fastest commercialization in the STO sector in the world.

Consequently, the market is also predicted to grow rapidly. As a result, almost all major Korean financial institutions are rushing to enter the STO market. Every year There are even rosy predictions emerging that, through nearly 50% market growth, the market will reach a staggering $367 billion by 2030. As such, Korea is a nation where significant innovation is taking place. In 2021, it ranked first in the Bloomberg Innovation Index, and Korea took home nine out of the 20 innovation awards at this year's CES.

VivaTech, one of Europe's largest tech conferences, also selected Korea as Country of the Year. As previously mentioned, I believe Asia will be the region leading the full-scale popularization of the blockchain ecosystem. Furthermore, I believe Korea, with its large number of developers who are the most familiar with the digital economy, quickly embrace trends, and are accustomed to creating high-quality content and applications, can serve as the gateway to the Asian market. Since [year], Seed has invested in over 150 global blockchain projects over the past eight years. Statistically, about 71% of the portfolio in the West consisted of infrastructure projects, while about 67% of the portfolio in Asia consisted of projects related to applications or content.

This difference between the Eastern and Western blockchain ecosystems has naturally led to exchange and cooperation between the two sides. Western infrastructure projects utilize their infrastructure to develop applications and We have found Eastern communities that create content, and conversely, Eastern application developers want to interact with Western developer communities to build a more stable, faster, and innovative infrastructure. Seed has facilitated this process, acting not merely as an investor but as a network builder. Last year alone, Seed hosted over 70 community support events, including MeUp, hackathons, conferences, operating bootcamps to train developers, and assisting with career matching through University Mixers in various cities around the world. This is why we are acting as network builders beyond just investors.

And at the pinnacle of these efforts is our five years of co-hosting Korean Blockchain Week. We sincerely welcome you to Korean Blockchain Week 2023. This year, we have made extensive preparations to share more insights and qualitatively, not only on a larger scale but also in terms of quality. Hearing many people say that the blockchain market has collapsed, I find myself reflecting on 2018, when Korean Blockchain Week first began. Back then, when the first event started, as you can see in the chart, the bear market was in full swing.

It was an ongoing process, so preparing for the first event was extremely difficult. We heard a lot of criticism and concerns, with people asking what on earth we were doing by creating a conference when blockchain was already considered dead. However, in the meantime, the industry has grown significantly, and the Korean Blockchain Network has also led this growth alongside the blockchain industry over the past five years. We are working to unlock the potential of blockchain technology. We want to build an even better blockchain ecosystem together with everyone attending KBW.

[Applause] Thank you.