In many ways, blockchain technology is synonymous with the west, but the fact remains that the concept’s heritage and long-term growth potential is arguably more aligned with Asia.
After all, Bitcoin represented the first large-scale blockchain project, with this rolled out back in 2008 by Japanese entrepreneur Satoshi Nakamoto. Not only this, but we’ve also seen exponential growth in the Asia-Pacific blockchain market of late, with this sector expected to achieve a net worth of $16 billion by the year 2024.
But how is Asia poised to become the future hub of blockchain applications, and what iterations of this technology are likely to be most prominent in the region? Let’s find out.
What is Blockchain and What Types are Most Common in Asia?
At its core, blockchain is a decentralised technology that includes multiple digital ledgers. This often presents itself as an infinite list of immutable records, which are referred to as blocks and linked using cryptography.
Both transparent and anonymous in equal measure, the data incorporated is then distributed as an open and real-time ledger of particularly transactions in chronological order.
While blockchain in Asia is most synonymous with cryptocurrencies such as Bitcoin, it has also become a key focus of the region’s healthcare market. We’ve seen a high rate of adoption in this market, with both the end-user and application segments of blockchain technology serving to segment various healthcare providers and drive more transparent billing and claim settlements.
Blockchain is also becoming increasingly prominent in the banking space, through a series of partnerships between established lenders and regulators and successful startups. In 2016, for example, the Monetary Authority in Singapore partnered with the firm R3 to utilise blockchain as a way of processing inter-bank payments.
This provided a significant boost to the efficiency and speed with which such payments could be processed, while the use of blockchain also created a list of transparent records that could not be retrospectively manipulated.
Blockchain is now widely referenced in Asian trading circles too, with a whopping 20% of all cryptocurrency trades now being completed in South Korea and neighbouring regions.
This number includes both large-scale institutional investors and everyday citizens, and it should come as no surprise given the region’s appetite for forex trading and the fact that three of the world’s top five exchanges exist in Asia.
Why is Asia Now a Hotbed for Blockchain Growth?
Aside from this wealth of potential applications in Asia, blockchain in the region has also benefited from sustained investment from governments, large corporations and large scale hedge funds.
In Hong Kong, the authorities are also relaxing regulations as a way of driving crypto investment, allowing Venture Smart to launch the region’s first approved cryptocurrency fund with an ambitious target of having $100 million under management within 12 months.
Beyond this, it’s also clear that blockchain offers a solution to many of the drawbacks posed by technology and trading platforms in the region, such as high fees, below-bar customer experiences and significant security issues.
The transparent and immutable nature of blockchain certainly has the potential to help with some of these issues, particularly in terms of enhancing the consumer experience and eradicating the type of scandals that have rocked the commodity and forex markets in recent years.
Then there’s the Asian economy and population, with the region to a host of emerging economies and a total population well in excess of 4.6 billion people. This is creating the ideal combination of opportunity and resources, with Asia naturally home to much of the leading talent in advanced technologies such as blockchain.
With the Asian population likely to swell further and the economies within the region growing rapidly, it should come as no surprise that Asia is set to dominate the blockchain space well into the future.