The basic foundation of cryptocurrencies, such as Bitcoin, Ethereum and GMB coins is similar to that of a precious metal. When a new metal is found, the mining is initially easy and does not require a lot of effort. As time goes by, mining becomes intrinsically more difficult as it requires an increase in energy, thus becomes rarer.
Recreating in a virtual world these basic principles made bitcoin a success, while its mining difficulty intrinsically became more difficult. What are the consequences of these difficulties? More computing power, thus more electricity required to calculate algorithms producing digital coins.
One key South Korean player seems to attract more attention than others: the GMB token. The reason behind the strong interest in the GMB is quite easy to understand. When it comes to cryptocurrencies, investors and users alike are looking for a secure and fast way to manage their finances, with a fiat exchange to convert to other currencies.
In 2017, the country was already a global leader in the cryptocurrency market, responsible for more trading per capita than any other country in the world. The Korea Financial Investors Protections Foundation conducted a survey amongst 2,500 South Koreans between the ages of 25 and 65 in Seoul, and five other of the country’s largest cities. The study showed 7.4% of South Koreans questioned were in possession of some type of crypto currency, increasing 6.4% from the prior year.
The study also revealed the average amount held by those polled was just over $6,000, reflecting a 64% increase over the prior 12 months. Since then, the amount of people buying and exchanging crypto has continually increased.
According to our financial correspondent Israel Figa, “By giving a regulatory framework to cryptocurrencies, South Korea has acknowledged the importance of digital financial assets for what they are: highly secure and reliable. Relatedly, the blockchain technology is getting increased interest from major companies”.
As a major player in world financial markets, South Korea is moving forward in developing a comprehensive ecosystem for cryptocurrencies. Under the new legislature, blockchain related crypto currencies such as GMB, Bitcoin, Ethereum and other digital assets have begun replacing cash currency and credit card transactions.
In May 2020, the South Korean National Assembly passed new legislation which provides a framework to legalize and regulate cryptocurrencies and crypto exchanges.
“South Korean policy makers understand that crypto currency has become very popular” says Israel Figa, while explaining “the legislature and legal umbrella demonstrates the maturity of Seoul’s policy makers.”
What does that mean? It allows major players to enter the crypto market. Last week, both Bitcoin and Ethereum appreciated by 15% in value overnight due to PayPal announcing it will exchange crypto currencies.
Evidence suggests that the GS Group, a major conglomerate that operates in energy, retail, construction and sports are willing to create their own cryptocurrency. Each one of them is bound to open a dedicated platform to start working on its own asset.
But why is South Korea such an interesting place for cryptocurrencies? As a high-tech heaven, it has a tradition of being a place for new technology and early-adopters. This is exactly what opened the doors for digital financial assets such as the Bitcoin, Ethereum and GMB dual crypto currencies to thrive in.
Time will tell how South Korea will manage cryptocurrencies, as its legislation is trying to give them a legal framework that ultimately has one goal: to bring cryptocurrencies to the general public. This has stimulated consumers and major companies to invest in digital assets. Due to its’ innovative maturity and subsequent legislature, we predict the rest of the world will soon view South Korea as the leader of crypto currency markets.