Lack of Research on Blockchain and Cryptocurrency by South Korea

Apr 17, 2018

Due to frenzy in cryptocurrencies including Bitcoin, there are now companies that specialize in writing white papers for other companies and verifying ICO (Initial Coin Offering) of cryptocurrencies. However, it is necessary to have health promotion of relevant industries since actual research on blockchain and cryptocurrency is lacking.
Professor Kim Hyung-shik of Sungkyunkwan University’s Computer Engineering Department met with The Electronic Times on the 16th and pointed out things that white papers on cryptocurrencies were lacking. “There are now companies that write white papers for other companies.” said Professor Kim. “It is questionable on whether a company or a person can write business plans for other companies.”
White paper work as a type of a business report as it is an important indicator that points to values of corresponding coins before ICO of cryptocurrencies. However, most of white papers are actually composed of flowery words and they actually do not provide much information. They do not even have detailed regulations and verify codes.
“Codes were not made public even when tens of millions of dollars were made through ICO.” said Professor Kim. “This is just like not uploading disclosed information after being listed.” He explained that such guide based on cryptocurrency industries is needed.
This criticism was also brought up at a debate with a topic ‘Direction of Policies on Cryptocurrency During Industry 4.0’ that was held by Korea Institute of Information Security & Cryptology (KIISC) and Korea Internet & Security Agency (KISA) at KOEX on the 13th.
“Experts need to look into these white papers.” said Professor Lee Han Sang of Korea University’s Business School. “Experts who have a lot of knowledge in relevant technologies need to evaluate these white papers and play a role of VC (Venture Capital).”

Lack of Research on Blockchain and Cryptocurrency by South Korea

Although South Korea has higher interests towards cryptocurrency compared to other advanced countries, it is difficult to find relevant research organizations. On the other hand, universities in other advanced countries have been operating relevant research centers such as British Imperial College’s Cryptocurrency Research Center and MIT’s Digital Currency Initiative for many years. Although Korea University became the first South Korean university to open up a cryptocurrency research center, there are not any other significant movements besides this.
It is a same issue for blockchain technology. According to KIISC, South Korea’s blockchain technology is behind 2.4 years compared to advanced countries. Based on relevant statistics on patents, it goes from U.S. to China then to South Korea. However, South Korean patents are leaning too much on cryptocurrency exchanges and there are not many patents on platforms and services.
South Korea’s cryptocurrency industry points out that negative views from South Korean Government towards cryptocurrency is the reason behind lack of blockchain technologies.
South Korean Government is not allowing cryptocurrency as much as possible by regulating it as overheated speculation. Financial Services Commission and Ministry of Justice especially are showing hard stances against cryptocurrency. As a result, organizations and universities are not working on relevant researches hastily.
On the other hand, U.S. Securities and Exchange Commission is asking ICO process to follow its Securities and Exchange Law. Japan is asking its cryptocurrency exchanges to register themselves formally.
“South Korean Government understands that cryptocurrency and blockchain cannot be separated.” said a representative for a South Korea’s cryptocurrency industry. “Rather than having tough regulations on cryptocurrency, it must promote cryptocurrency industry by establishing guidelines and others.
Staff Reporter Jung, Youngil | jung01@etnews.com

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