Samsung Ventures' Jong Choi and Morgan, Lewis & Bockius partner Nicholas Moore spoke about how the blockchain space may push past the negative hype surrounding crypto and NFTs.
Don’t panic over the apocalyptic headlines, blockchain and crypto are still worth making calculated bets in, was the message from Jong Sang Choi, head of Europe investments for Samsung Ventures, a corporate venturing unit of electronics manufacturer Samsung, and Nicholas Moore, partner at law firm Morgan, Lewis & Bockius at the GCV Symposium.
Cryptocurrency continues to make the headlines for the wrong reasons, as falling token prices and stolen non-fungible tokens (NFTs) affect public perception of the space, and Moore bemoaned what he termed as the hysteria around the crypto markets that is in turn impacting blockchain technology innovation.
Choi said that for Samsung, blockchain technology is important in terms of its financial services business as well as its consumer activities.
The corporate is examining factors such as incorporating crypto technology into enterprise software, having in recent months launched crypto-supported mobile wallets as well as smart televisions with NFT features.
Samsung is still in the early stage of testing what the technology could mean for consumer products but is not sure how it will eventually materialise. Its size arguably makes it easier to wait, but Choi described how it has been pushed into introducing new technology that also includes other areas such as artificial intelligence.
Moore said it is helpful to have companies like Samsung in the space because the presence of corporate VCs helps to address residual public relations problems by adding legitimacy. He is involved heavily with gaming and metaverse technology developers where the key challenge is interoperability – all metaverses might not be on the same chain – but is also seeing activity in areas such as decentralised finance.
Choi suggested content use cases for NFTs and blockchain are helping it go mainstream, but that it might not be its ultimate focus. Samsung Ventures is big enough to be able to be careful, if not conservative, and is very interested in the security side of the space, with its investments including Ledger, a developer of digital asset security software.
The macro strategic issue of financial regulation is jurisdiction-specific but is being resolved in a relatively straightforward fashion in the US and UK according to Moore, who suggested the UK is in line to eventually be a crypto hub.
The question is whether the government can ensure there is transparency and safety for consumers. If a token is only as good as its programming, what is the format, and if it is the law of contract, is that sophisticated enough?
Choi stressed that as an investor, Samsung Ventures tries to certify careful governance in its Web3 deals. However, Moore pointed out that the issue is somewhat application-specific. If a corporate venturer is looking at back-end architecture the issue is less about transparency and safety than it would be with the developer of a consumer-focused end product.
Samsung is trying to expand content and services and is looking to see how it will impact consumer-facing business models. One area it is exploring is fashion brands operating in the metaverse, but that is still a small part of their overall business.
The sector is still at an early stage and unsure which direction it will go, but Choi said that is an evolutionary step in innovation. AI is a building block for what the blockchain needs to be.
Moore concluded by stating the space is worth jumping into for companies, especially if they are not focusing on consumer-facing technology. If you are in an industry like financial settlement or corporate registrar, blockchain tech will be essential and it is advisable to at least be looking at the sector.
The volatility reflects blockchain’s status as an emerging industry but that to an extent can be mapped, Moore said, providing the example of how crypto token prices in general tend to follow that of Bitcoin.
Choi agreed, stating that companies should be looking to invest now if possible, and compared the sector to the position of big data five or 10 years ago. It is now at a place where it is influencing companies’ business models, and blockchain may well end up doing the same in a similar timeframe.
