Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract functionality.
It provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. It also provides a value token called “ether”, which can be transferred between participants and is used to compensate participant nodes for computations performed.
Over the past few weeks, Ethereum has experienced a truly exponential growth in terms of market cap and development community, reaching a market cap of $4.37 bln. According to various sources and market data, the South Korean exchange market has accounted for 17 percent of global Ethereum trading.
Companies within the South Korean digital currency and Blockchain industries are rapidly expanding their consumer base across the country. Interestingly, the majority of clients of Blockchain and digital currency-based startups in South Korea are composed of government-funded organizations, major financial institutions and multi-billion dollar corporations.
South Korean corporations and financial institutions are considering the Bitcoin and Ethereum networks as important technologies which are necessary for developing new infrastructures and internal systems to base their operations on.
Essentially, local corporations are visioning the creation of an autonomous, secure, transparent and efficient infrastructure which can handle the settlement of transactions, processing of complex data sets and secure sensitive information within a single network.
Recently, South Korea’s Financial Services Commission (FSC), the country’s top financial regulator, announced that it plans to launch a Blockchain-powered pilot project within this year. Jeong Eun-bo, vice chairman of the Financial Services Commission, noted that with the introduction of a government-funded Blockchain project, the country intends to lead the Blockchain sector and fintech market on a global scale.
“Blockchain technology has great potential to be used in finance and various other fields. Since South Korea has the world’s top-level ICT technology, it will be able to lead the international trend in the Blockchain sector if the government, related industries and experts pool their wisdom.”
Connection between Ethereum and rising popularity of Blockchain in South Korea
Ethereum is arguably the largest Blockchain network that is focused on the development of decentralized applications and smart contract-based platforms. Unlike the Bitcoin network, which was designed to operate as a peer-to-peer digital cash system and as a digital currency, the Ethereum network was introduced to support a wide range of decentralized applications and provide the community with a more flexible and functionality-focused network for development.
On March 24 for instance, popular decentralized storage provider Storj migrated its platform over to the Ethereum network, as Bitcoin’s Blockchain congestion became an issue when it came to processing high fees for its users. Because of the block size debate between Bitcoin Core and Bitcoin Unlimited supporters and the threat of miners in China to essentially lead a 51 percent attack on the Bitcoin network, the demand for flexible networks like Ethereum has risen significantly.
Shawn Wilkinson, CEO/CTO Storj Labs Inc., wrote:
“Because Counterparty uses the Bitcoin Blockchain for transactions, which is currently having issues with transaction backlog, our users have experienced extremely long transaction times (hours to days).”
South Korea considers itself as a leader in technology in both the Asian and global markets. The country’s top regulator and corporations are already eager to investigate emerging technologies like Ethereum, particularly if they have the potential to address serious problems in the financial and technology sectors.
An increase in the number of government agencies, banks and corporations testing the Ethereum network for various applications created a hype behind the digital asset in South Korea and ultimately drove the trading volume of Ether to new highs.