Problems in the Blockchain Market

Find the problems of the bullrock chain market and establish a new agenda.

The top priority of the blockchain services market is that it is difficult to secure business continuity that ensures real cash flow due to its connection to the fragile real economy.

While the technical background that secured decentralization and security due to the technological pioneers for the transition from WEB 2.0 to WEB 3.0 has become solid, it is focused on the spread of the technical environment and the differentiation from WEB 2.0, so it is not properly providing a familiar usage environment and consumption environment for general users who are familiar with WEB 2.0. In addition, due to the characteristics of the virtual asset market, which is highly related to the existing financial industry, it is spurring the introduction of regulations and regulations for institutionalization of virtual asset-related markets by country, and the demand for business models and institutional regulations similar to business development in the physical market is increasing, so securing business feasibility rather than technological leaps is becoming increasingly important.

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| Initiation of the introduction of virtual asset regulatory policies

Due to the low transparency and insufficient regulatory system compared to the size of the market, the protection of consumers and investors is insufficient, and it is likely to be used for illegal transactions such as money laundering and tax escalfew. In 2019, the International Organization for the Prevention of Money Laundering (FATF) recommended the application of Travel Rule, a system that requires virtual asset operators to provide information related to senders and receive along with the transfer of virtual assets when virtual assets to other virtual asset operators at the request, but it is currently only implemented in Korea among major countries. Since 2020, major overseas countries such as the EU and the United States have secured the health of the financial system so that cryptocurrencies can be used as an efficient payment method, and have prepared regulatory measures to ensure that they do not impede financial stability, and are also conducting consultations for the supervision and management system between countries. In the case of Korea, the introduction of active regulations and policies such as the enactment of the Virtual Asset User Protection Act, the first step of regulatory introduction applied from July 2024 is being announced.

| Low user experience for cryptocurrency wallets

Traditional cryptocurrency wallets have the disadvantage that the initial entry process, including the user verification process, is complicated due to the decentralized approach of the blockchain. It has often been the problem of being sent to unwanted places due to UIs that did not take user experience into account, or making fatal mistakes in managing accounts at a personal level, making customers' valuable assets irreparable. This can lead to a bad experience for regular users who are unfamiliar with the cryptocurrency environment, causing them to have an early breakout.

| Initial barrier to entry for M2E (Move-To-Earn)

M2E services that have been unveiled could only be started by purchasing expensive NFT equipment with unstable value. As the overall value of virtual assets plummeted, the value of the rewards mined also plummeted, giving up the recovery of their investments and leaving M2E services. In addition, there is also high concern about the long-term operation of the project as a simple business model that relies solely on new users' purchases or minting fees.

| P2E (Play-To-Earn) market downturn

Domestic P2E games have once been successful in the global market, but are now showing an overall decline. Currently, the reality is that P2E games are difficult to enter the market itself, with the exception of Southeast Asia. There are two possible sources of this. The first is the absence of gameplay. As the P2E concept was emphasized, the game felt like it was not a game. There are also more mass-produced P2E games with no additional content updated, and users have become bored playing the same game to make money. The second is the decline in the value of tokens. The token economy is governed by the laws of supply and demand. When the amount of tokens on the market increases, the value of the token falls. P2E game companies that did not take this into account issued an unlimited number of tokens, which led to a drop in the price of P2E game tokens.

| Low public understanding of NFTs

When there is a lack of understanding of new industries, the high possibility of various incidents and accidents is a problem shared by most of the new technologies and new industries. In particular, in the case of NFT, it is a concept industry that combines various new technologies such as blockchain, metaverse, and virtual currency with elements of new industries, so the public's understanding is lower than other new technologies and new industries. Meanwhile, in the case of services or games using NFTs, problems related to intellectual property rights also occur frequently. For example, you may steal an image file released during production and first release services and games to intercept profits, or sell stolen NFTs at a much lower price than the original to undermine the value of the original NFTs.