Bitcoin-crazy South Korea has now gone gaga over Mega Moolah!
Like one of its closest neighbours Japan, South Korea is a country that certainly seems to have come to grips quickly with the bitcoin and cryptocurrency phenomenon.
Unlike other parts of the world, where there may be sporadic, incomplete or even a complete lack of regulations regarding the digital currency, South Korea has taken steps to clarify exactly where people in the country stand when it comes to bitcoin.
First of all, under-aged and foreigners in South Korea are not allowed to trade cryptocurrencies. Adult South Koreans however, are allowed to trade cryptocurrency, however they cannot do so anonymously, and they can only do so if they have an account at a bank, that also holds an account for their cryptocurrency exchange. Furthermore, this account must be in the name of the holder.
This can then ensure that the exchange and the bank in question can take adequate steps to ensure that the person making the transaction is indeed that person and also means that other money laundering prevention actions can be taken as and when necessary.
What is clear, rather like in other countries such as the US and the UK, it has been important for South Korean authorities to be able to have some control of bitcoin. They believe the biggest problem with crypto is lack of regulation.
While there is some form of minimal regulation in South Korea for using bitcoin, the country has stopped short of imposing wider restrictions, due to the difficulty in implementing them on the Internet. However, there remain persistent rumours that South Korea may be one of the first countries to try and regulate bitcoin usage fully and usually when a news story breaks along these lines, the value of bitcoin tends to take a tumble.
While not viewed as a legal currency, bitcoin and other forms of digital currency are viewed as an asset by South Korea, which means that they can be taxed. Not that this has stopped many South Koreans, particularly younger citizens, from investing in bitcoins and other cryptocurrency in huge numbers.
Why is bitcoin a hit with millennials in South Korea?
Just how much bitcoin and other cryptocurrency has been taken up by millennials in South Korea is staggering. This particular group of youngsters, usually in the 18-30 age range, have made the Korean Won the third most traded currency for bitcoin, however it is not just this form of crypto that is popular, an incredible 17% of all trading for the cryptocurrency Ethereum take place in South Korea. Many of the world's biggest cryptocurrency exchanges are also located in South Korea.
One Korean firm, Saramin, estimated following a survey that 30% of salaried workers in Korea had invested in bitcoin or other similar currencies by December 2017, the height of the bitcoin boom and a staggering 80% of those people were aged between 20 and 30.
Why this particular demographic of young South Korean is so interested in bitcoin is more than simply a cultural thing. This is not simply about these youngsters having more experience and knowledge of digital currency than their elders, nor is it about their freedom of access to the currencies on a range of mobile and other devices. Instead, it is more to do with how expensive it is to live in South Korea, especially in and around the major cities.
In some of the big cities, the average deposit for an apartment rental can run to several hundreds of thousands of dollars. The reason being South Korea's housing system, called 'jeonse', means that renters need to put up a huge deposit in order to rent accommodation. This is then used in place of weekly or monthly rentals. The owner of the accommodation then makes money from the interest earned on that deposit. However, the size of these deposits can be as much as 50% to 80% of the accommodation value.
When the tenancy period ends, which is usually after two years, the full deposit is returned to the renter and the accommodation can then be re-let again.
The 'jeonse' system has been popular for many years, but with South Korea now operating in a housing bubble, where house prices were rising very quickly indeed, this does mean that finding accommodation in a city is a hugely expensive task for professionals starting a new career and this is where the interest in cryptocurrency originates.
Many South Korean millennials felt that investing in bitcoin and other cryptocurrencies was the answer to their accommodation issues. Many people invested in bitcoin as the currency boomed in late 2017, however when the price fell sharply in 2018, this has left many South Koreans facing a shortfall and now concerned that they may not even make all their money back. There is even a term for the effect this has had on unfortunate millennials in the country; 'bitcoin blues'.
However, it would be wrong to suggest that bitcoin is simply a gamble that many young South Koreans are willing to take to try and improve their situation in life. It is also wrong to assume that the issue lies with bitcoin. In truth, a society which puts its youth in such a position where they feel investing in bitcoin to such a level is their only way to a successful life, is far more at fault.
What is also interesting is how South Korea has adopted bitcoin and its use in a very different way to its neighbour Japan. In Japan, bitcoin is now being used in shops and businesses to purchase items and its availability is increasing across the country, moving from the digital arena and into the real world at an increasing rate.
Furthermore, bitcoin entertainment, such as the new Bitcoin Casino, which offers Mega Moolah fans the opportunity to play the hugely popular Mega Moolah progressive jackpot slot, is also increasing in popularity.
However, in South Korea, bitcoin remains viewed more as an investment, like stocks and shares, rather than a liquid, spendable asset. However when it comes to attempting to win a multi-million South Korean won jackpot on Mega Moolah, things get slightly different. After all the most recent Mega Moolah jackpot win converted to South Korean won, was a staggering 24,726,715,854.84! There's a lot of reasons why South Korean online gamblers enjoy playing the Mega Moolah slot with their bitcoin!
While it can be argued that the law in Japan, where bitcoin is a legal form of tender, compared to South Korea where it is not, plays a key role in this difference, it is also a societal issue, with Japanese millennials having a very different set of cultural norms compared to their South Korean counterparts and this has made them view and use bitcoin very differently.
Given its importance in the bitcoin and cryptocurrency community, South Korea will continue to play a massive role in the development of digital currency and what happens there in terms of regulation will certainly have a ripple effect throughout that community. For many young South Koreans cryptocurrency may be their best hope of affording their first home, but its volatility remains its primary downfall and there is no guarantee that any proposed regulation of cryptocurrency would end that worrying uncertainty.
Byline: This article was published by Mega Moolah expert Henry. Media and other enquiries.
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