Why Blockchain Technology is Quickly Growing in the Asian Countries?
Blockchain technology is growing rapidly not only in The West, but also in Asian countries too. As per a recent report of Global Market Insights, there has been significant growth in the blockchain market in the Asia Pacific region. This is due to the growth in the number of investments and blockchain-based companies. Per the report, by 2024, the market is estimated to have a worth of over $16 billion.
During 2016, there were more than 135 investment deals made for blockchain-based startups, resulting in $545 million going into the blockchain market. However, in 2017, the market had a significant spike of 50%, with over 185 investment deals made, netting more than $1 billion into the blockchain market. With this growth, a lot of the investors are now focused on blockchain technology going forward.
The blockchain uses digital ledger technology, which has also become popular all around the world, with many companies already adopting it. These companies are not only startups, but large companies as well, such as Abra, Asta Solutions, SAP, Blocko, Amazon, BitSE, Ripple, Digital Asset Holding, Coinbase, Earthport, Microsoft, and IBM, and more.
But before we can talk more about how blockchain is taking over the Asia Pacific region, let us briefly cover what digital ledgers and blockchain are.
A Brief on Blockchain Technology & Digital Ledgers
Distributed Ledgers Technology (DLT) is the main technology behind Blockchain, as it uses various independent systems (nodes) to share, record, and synchronize transactions in each of the many electronic ledgers. In short, there is no one central and traditional ledger, but many digital ledgers. And Blockchain is one of these kinds of the distributed ledger.
A blockchain is a growing list of records. These records are called blocks, and are linked to each other using the technology of cryptography. Every block in a blockchain has a cryptographic hash of the previous block, a transaction data which is denoted with a Merkle tree root hash and the timestamp.
Due to the design, the data in the blockchain cannot be modified. The blockchain is a distributed, open digital ledger that records all the transactions that take place between two parties systematically. The records are stored in a permanent and verifiable way. A peer-to-peer network manages the blockchain collectively as they adhere to the protocol of validating new blocks and for inter-node communication.
As soon as the data is updated in a block, this block cannot be modified retroactively (which is with effect from a date in the past) without the modification of every other block that follows it. This basically requires a consensus of the network majority. Due to this, blockchain technology is considered secure.
Now let’s move back to the growth of blockchain technology in the Asian Pacific region.
Healthcare Is The Main Focus
Moving ahead, the healthcare market in the Asian Pacific region has seen the most significant level of blockchain technology adoption. The blockchain technology has three segments, namely: end user, region and application. The end user segment includes the segmentation of various healthcare providers, healthcare payers, and pharmaceutical companies.
On the other hand, the application segment includes the clinical data interoperability and exchange, billing, claim settlements, and supply chain management. In short, the healthcare industry claims that blockchain technology has made the management of data much more methodical and has enhanced the security and interoperability.
Blockchain Technology & The Asian Governments
The report by Global Market Insights also suggested that the reason as to why blockchain technology is growing in the market is due to the interest and support that the government is providing for the technology. Out of the many countries in Asia, places like Singapore, Hong Kong, and China are working towards understanding and benefiting from blockchain technology. They have had multiple policy changes and initiatives that have helped them get the best out of the technology.
In Singapore in 2016, the Monetary Authority became a partner of R3 to explore blockchain technology and utilize it for handling inter-bank payments. In addition to this, the country is also investigating another blockchain technology use for connecting the National Trade Platform of Singapore with those of other countries.
While in China, the government is working towards using blockchain technology for keeping track of all the charity donations in the country. As a matter of fact, they are planning to use this technology and remodel their charity tracking system.
Moving ahead, while the rise of popularity of the cryptocurrencies is unquestionable, the adoption of the technology only started to increase in the last three years.
Reason For Adoption of Blockchain in Asia
The increase in the adoption of the technology is mostly in large corporations, institutions, hedge funds, along with a lot of top-tier investors all around Asia. And the reason is simple; it is due to the many drawbacks that the trading platforms in the Asian countries suffer from. Drawbacks like sub-par consumer experience, high fees, security concerns, limited usability, and lack of consistency are a major issue in many Asian governmental institutions as well.
Particularly in Hong Kong, there have been a lot of complaints regarding the abused market and assets manipulation that eventually led to the breakdown of multiple cryptocurrency exchanges. This issue became widespread, and the Securities and Futures Commission’s regulators had to come in and patrol the market. They placed measures to curb possible scams frequently linked with virtual currencies.
Furthermore, lawyers and accountants were also involved to prevent these fraudulent and suspicious fundraising activities. They had to ensure that everything was complying with the Hong Kong law. However with the blockchain technology now, and its high priority in the country, a lot of things are changing. People and the government are adopting the technology to curb all fraudulent activities and reform the financial sector entirely.
Blockchain Technology is a High Priority
Due to the implementation of these regulations, Hong Kong is now gaining the reputation as being a significant international blockchain hub. It is working towards building an infrastructure for existing and new businesses to ensure that innovation and the technology stay as the crucial enabler for the growth in the financial sector.
As a matter of fact, many projects around Asia are setting up deals and infrastructure in Hong Kong. One example is the Japanese Messaging Giant LINE company, that has invested around $10 million in setting up their company in Hong Kong using this technology.
Another company is BitMEX, which is renting some of the most expensive offices in the world, located in downtown Hong Kong. This building is home to other financial giants as well such as Bloomberg LP, the Securities and Futures Commission of Hong Kong, Barclays Plc, Bank of America Corp, and Goldman Sachs Group Inc.
Other than this, there has been a new launch of crypto-exchange in Hong Kong, named Coinsuper. It has more than 1 million users, and the trading that takes place daily can be up to US$250 million. Focused on ‘Fiat to crypto,’ they have also launched a new ecosystem that would help in connecting various authorities, investors, and blockchain innovation labs.
Cryptocurrency is The New Thing!
With all these changes in the Asian market, especially in Hong Kong, cryptocurrency is the new thing that has hit the market. The government has also taken up the initiative to promote crypto investment by applying the no capital gain tax to crypto investment. This would help boost the industry by pushing investors to invest cryptocurrencies in businesses opening in Hong Kong.
This was done to let the public know that there are no restrictions around cryptocurrency trading and using the blockchain technology. In addition to this, the Money Service Operators licenses would only have to be applied for and obtained when the money services include fiat currencies.
The Hong Kong government is also taking some extra measures to let the public learn about cryptocurrencies and ICO investments. This is done through marketing and advertisements on social media, television, and the metro system. The main aim is to provide the public with a clear understanding of cryptocurrency and ICO investments. With all this, we can see how the Hong Kong government is supporting blockchain technology, just like many other Asian countries are.
And with the industry growing, they have also begun to collect blockchain professionals by expediting Immigration for Blockchain Jobseekers. This is another significant activity that the government has taken to grow the blockchain industry by attracting the best talent from the world.
In the end, it’s clear that blockchain is the new and the best thing being adopted by the Asian Countries. You too can enjoy the benefits of blockchain technology. If you have an idea to start a business using this technology and create something new, Hong Kong is the best place to do it.