The blockchain industry is facing the limits of its "winner-takes-all" competitive structure. With new developer participation in 2024 recording its first net decline since 2019, the industry is turning to new growth models centered on collaboration.
There are two reasons why blockchain is currently struggling to gain widespread adoption. The fragmentation of developers and liquidity across individual networks has slowed the overall pace of innovation. Furthermore, the public nature of all transactions has discouraged adoption, with businesses concerned about the exposure of sensitive commercial information.
The costs of fragmentation are significant. Cross-chain bridge hacks alone have resulted in billions of dollars in losses, and the proliferation of Layer 1 and 2 networks is fragmenting liquidity.
But the market is already signaling a shift. Investment in interoperability and privacy solutions is expected to increase 62% year-over-year in 2024, and multichain projects will see an 84% surge, attracting $780 million.
The industry compares the current situation to the early development of the internet. Just as the internet, fragmented by disparate protocols in the 1990s, unified under open standards like TCP/IP, blockchain can also overcome current barriers through optional public privacy and chain-neutral design.
This promises to be a new opportunity for Korean companies. It's a solution that allows large corporations operating global supply chains to protect sensitive information while ensuring transparency. Furthermore, it aligns with the government's digital asset institutionalization policy, providing a balance between innovation and regulatory compliance.
South Korea, currently one of the world's largest digital asset trading markets, must transition from speculative trading to practical business applications. For blockchain to truly become widely adopted, a paradigm shift is needed, one that prioritizes cooperation over competition and selective privacy over complete transparency.
