Runner-up Prize Can digital coins be regulated?

By Kim Chee-sue

This was the calm before the mud fight.

A year ago, in my third year of college, I lost all my money. It was no chump change. People smarter than me had gobbled all my moola, and I was left with my thumb in my mouth. At first, I felt forsaken and was full of doubt. Surely my internet money hadn't vanished just like that? But it had.

Kim Chee-sue

Then I felt disillusioned, bitter, and not a little stupid. Cryptocurrencies have a tendency to inspire either vitriol or idolatry and little in between, and I did a full 180, from the rather preachy cryptomaniac who will not shut up to the scoffing skeptic who says, “Bah, humbug!”

Then the mud fight began. The cryptoevangalists and disbelievers began to merrily sling mud at each other. Debates were started and ended in brawls. The comment sections of YouTube and internet forums showed no regard for the children.

Each side was convinced that the other was fantastically stupid, and this state of affairs reached its apotheosis as Bitcoin and altcoins rocketed to all-time-highs (you had to be there ― the price action was crazy!).

Then the bubble popped and investors who had entered the market too late were ruined in astronomic proportions, and the disbelievers started saying, “I told you so,” in scoffing confidence and the believers had nothing to say because they were busy Holding On for Dear Life (HODL).

It was then that I, the imbecile, had an epiphany ― that time does not pass but turns in a circle, and that while events themselves may differ, their circular nature does not. Conservatives and Liberals, Protestants and Catholics, countless parallels, haven't we been here before? Satoshi Nakamoto and Jose Arcadio Buendia, interchangeable ad infinitum.

I believe this observation not only answers the question at hand (Should Korea regulate cryptocurrencies? Yes, but more of that later.) but also prompts us to dig deeper.

First and foremost, can cryptocurrencies be regulated? Regulating Bitcoin can be done in a relative jiffy but what about privacy coins whose very purpose is to fend off regulation and traceability?

I imagine that regulating a privacy coin is akin to policing a black market or cutting the head off a hydra ― a premature attempt at control only serves to widen its influence. Like the hydra that grows another head, the privacy coin forks and reforks, or at the very least, privacy protocols are upgraded and renewed, thus producing a new wave of privacy currencies for the community that feels it is receiving unjust attempts at control.

Also, assuming that cryptocurrencies can be regulated, how? An outright ban on what has the potential to be a major competitive advantage seems like a precipitous proposition but at the same time, most altcoins, with glamorous dreams but little to no realistic goals, are destined to fail and go down with epitaphs that read, “The pets.com of the 21st century,” or worse, “Tulip mania 2.0”.

Some ICOs are gimmicks; a few are downright scams. A handful, however, will change the world. Struggling foreign workers will be able to send money to their families back home quickly with little to no remittance charges, patients' health records will be inviolate, and tenuous titles to ownership will be fortified through immutable records.

I propose that in this case, like in all precedents, we should not deny the right to support what one believes in and instead we should offer tools for making better choices and not rules that restrict it. Specifically, if somebody is excited about a project and wants to be a part of it, they should not be stopped, but the general populace should also be educated so that they will be able to make the smart decisions themselves.

I have left the answer to the question of whether Korea should regulate cryptocurrencies at the end for two reasons. Firstly, the two additional questions that I have proposed give the question at hand both validity (most cryptocurrencies can be regulated, some not easily) and meaning (prudent regulation of cryptocurrencies can be of tremendous benefit for Korea's future). The regulation of not only cryptocurrencies but also other budding technologies that will make up the 4th Industrial Revolution is something everybody should consider.

Secondly, my answer is simple. Every revolutionary force in the past was met with regulation, for better or for worse. My answer to this essay question is a phrase that two of my favorite characters in my favorite movie, Neo and Agent Smith from The Matrix (a film that also touches on the circular nature of events, not a coincidence I believe) have said at different points in the trilogy to signify a beginning, an end and a rebirth ― simply put, “It is inevitable…”

Now if only I can get my money back.

Kim Chee-sue is a student at Seoul National University.