Korea’s Developing Culture of Blockchain Technology

In the land of the Tiger Economy, South Korea’s commitment to economic growth for over 30 years has been clear. Some of the biggest names in technology and automotive industry in the world have thrived in South Korea and it’s clear that there’s a strong commitment to continuing that progress and growth in the future. While times have changed in the world economy, with production of most physical goods being exported largely to places like China, South Korea’s continued growth has been shaped by their attempt to have world-wide cultural influence through industries like K-pop and K-drama entertainment. However profits are hard fought for and hard to keep, especially in the age of the internet. What could potentially spur an additional growth spurt, if done right, is innovative blockchain technology ideas born and developed in South Korea.

South Korea may not have as loud or robust a startup culture that countries like those in Europe, or the U.S.A. and Canada have, where there are huge tech incubators, accelerators and communities built around VC firms looking to get their hands on the next big thing. However, considering that such a massive amount of South Korea’s GDP is controlled by just a few companies, it’s not surprising that so much private enterprise effort has been put into developing blockchain technology through those channels. However, that’s not to say that the smaller and scrappier teams aren’t working hard to grow and get noticed. As the debate over private vs. public blockchains evolves, the power of developing the next big application of that technology may shift away from the mega-corporations to the startups and maybe Korea’s startup scene is suited quite well for that opportunity.

So who else is looking into blockchain technology currently? Despite what is admitted publicly, pretty much everyone in finance and beyond is toiling away to discover how they can be a first-mover. Some experts have predicted that capitalization surrounding blockchain-related industry could be around $1 Trillion by as early as 2019. If any executives at giant South Korean companies like Samsung or Hyundai were to give even the slightest credence to these predictions, they’d at least be prudent to form some sort of internal “task force” to sort the wheat from the chaff as far as what’s applicable to their interests and what isn’t. Then again, it’s not entirely clear whether or not both aforementioned companies aren’t already deeply invested in seeking out their own private blockchain innovations.

Not all development in the blockchain space is being taken from a top down perspective. A local incubator space in Seoul called the Bitcoin Center Korea offers work spaces, networking events, and workshops and has generally been a champion of all things Bitcoin and blockchain related from a startup level. General Manager of the Bitcoin Center Korea John Saeyong Ra has brought a dynamic events calendar together to build a strong community around Bitcoin and the blockchain and hosts some interesting up and coming startups in the space as well.

John Saeyong Ra told BTCManager, “Bitcoin Center Korea is basically a hub for all these companies and organizations and functions as a think tank from time to time in order to create better ecosystem.”

If you do a quick search in Google  for how the biggest companies in South Korea are becoming involved with blockchain technology, you’ll find primarily that entities like the Korean Securities Exchange (KRX) and large Korean Banks like Kookmin Bank are publicly stating that they’d like to explore using blockchain technology. However, you’d be forgiven for scratching your head and asking yourself, “that’s it?” Don’t be too surprised as much of the news can likely be found on the South Korean search engine that’s widely used domestically, Naver.com. It’s possible that Korean companies don’t focus on international press coverage as much as Western companies do, however given the technological power that Korea has in many aspects of its everyday society, it’s worth digging a little deeper to see what Korean companies are accomplishing in the blockchain technology space.

Even if some of the biggest companies in South Korea may be very cloak-and-dagger about their approach toward blockchain technology, the startup scene is still thriving, growing and continuing to evolve. LG CNS is actually developing  a startup called Blocko, which offers a product called Coinstack, a blockchain-as-a-service software. Shinhan Bank has a financial tech incubator called The Futures Lab which also supports several blockchain startups. Also, from a governmental perspective, the Chairman of the Financial Services Commission Yim Jong-yong has shown support for blockchain and Bitcoin startup culture in the last year.

Regardless of national and international publicity on blockchain technology and what bankers and government officials are saying about it, it’s clear that the cat is out of the bag as far as blockchain technology goes. The culture and economy behind what blockchain exists as, which is Bitcoin, is thriving as well, with some struggles along the road to becoming wide-spread. However, for every financial executive that writes of Bitcoin as a joke or failure, they’re often saying within the next breath that blockchain technology is at least something that they’re taking seriously and plan to look into so as not not be left behind in case of a massive sweeping technological revolution. It will be exciting to see how Korea’s private and publicized efforts with developing blockchain technology contribute to the movement as a whole.

Royal Bank of Canada Engages Ripple To Foray Into Blockchain Technology

Deloitte has continued its focus on providing insight for it’s rather large and well-established client based on blockchain technology applications in their latest paper entitled “Blockchain: Democratized Trust.” One of their more prominent examples in this paper of large scale businesses using blockchain technology is the Royal Bank of Canada in their venture into new-aged remittances.

Including a mixed bag of bank-to-bank, business-to-business and peer-to-peer remittances, Royal Bank of Canada operates across 40 countries and with 16 million customers worldwide. They, like most other major international and domestic banks, operate under largely restrained and inefficient financial operations when it comes to cross-border operations. Due to multiple middlemen, bureaucratic red tape and high fees, transferring money overseas has become anywhere from an annoying to prohibitive task for people all over the world, regardless of their country of origin or economic status.

Even though this traditional process of cross-border remittance is painfully slow and expensive, it’s considered largely a secure and reliable process which hasn’t had enough pressure on it to change in the market, until now. With blockchain technologies starting to gain acceptance and application in smaller-scale businesses, they are being recognized by important executives in the Fintech sector as a potentially necessary play for the future.

Eddy Ortiz, RBC’s vice president, of solution acceleration and innovation spoke about blockchain technology stating, “as we came to understand more about the challenges we faced, we realized the underlying technology powering it was what was particularly exciting.”

One blockchain related technology that has been particularly appealing to the Royal Bank of Canada is Ripple, a real time gross-settlement-system. Ripple has attracted particularly large enterprise level financial and software companies seeking a more secure entry into the blockchain technology space since its beginnings in 2012.

Before rushing headlong into deploying blockchain technology across all of their verticals, RBC intends to work with Ripple to develop a limited production solution to test the solution’s effectiveness and security. Additional areas that RBC is looking to explore with blockchain technology include customer loyalty programs and eventually smart contracts.

Featured image from Shutterstock.

 

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Consumers Research Holds Conference In Bretton Woods About Future Of Blockchain and Bitcoin

Consumers’ Research, founded in 1927 and the oldest consumer research group in the United States has released a whitepaper surrounding something very contemporary; Bitcoin and the blockchain. Centering around a financial conference located in Bretton Woods in New Hampshire’s White Mountains last summer, the whitepaper covers discussed topics from a workshop held with leading Bitcoin industry insiders.

A similar conference happened in the same place as in 1944 where matters were discussed about what would happen with the world’s economies and society as a whole if responsible and more sustainable monetary systems were collectively setup. The result of this latest gathering is a 97-page piece of work that is both in-depth and vast in its coverage of the current state of affairs and future potential of Bitcoin and the blockchain technological application.

Joe Colangelo, the executive director of Consumers’ Research released the whitepaper last Friday at the North American Bitcoin Conference which took place in Miami, Florida. The whitepaper starts off by giving a broad background on Bitcoin and the blockchain technology behind it, allowing  a lay person the ability to grasp the technical distinctions surrounding how it works on a high-level. It then goes on to define the goals of the whitepaper, articulate use-cases for Bitcoin and give an honest look at the risk and upside of various scenarios.

Colangelo wrote in his preface that the 3 main goals of the paper were to:

  1. “Serve to inform those new to Bitcoin and block chain technology of opportunities they may not have considered previously”
  2. “Better inform members of the Bitcoin community of potential hurdles that may impede their ability to effect change, which they may not have realized.”
  3. “Serve as a primary document for how industry experts viewed Bitcoin and block chain technologies in the year 2015.”

The editor and primary author, Kyle Burgess along with Joe Colangelo who is co-primary author brought together a wide range of Bitcoin and block chain industry experts to weigh in on the breadth of issues set forth in the whitepaper as contributing authors. Some of the contributing authors and workshop participants overlapping were:

  • Alicia Carmona, Identity 2020
  • Michael J. Casey, MIT Media Lab/Digital Currency Initiative
  • Patrick Deegan, Open Mustard Seed & Personal BlackBox
  • Jinyoung Lee Englund, Digital Currency Council & FE Ventures
  • Eric Martindale, Blockstream
  • Victoria Van Eyk, ChangeTip

One of the most prominent mentions on the contributing author list was Nick Szabo, a smart contracts pioneer and a man once rumored to be the secret identity of Bitcoin founder Satoshi Nakamoto. In the paper he writes of his main recommendations for smart contracts moving forward:

“Lobbying, advocacy, and education will help developers get out in front of onerous regulations. Organizations such as Consumers’ Research, CoinCenter, the Digital Currency Council the Chamber 48 of Digital Commerce all work to address regulatory challenges and the Bitcoin community should reach out to them with their concerns.”

Coincidentally, the whitepaper was released in a period where much public speculation and criticism has been levied against Bitcoin. Though some large financial institutions have made some version or other of block chain technology their cutting edge darling, there has been no shortage of public dismissal of Bitcoin by finance executives, particularly at the 2016 World Economic Forum in Davos Switzerland.

This whitepaper serves as a compass for both regulators and Bitcoin industry insiders to steady their aim on the main and agreed upon issues at hand for Bitcoin and block chain technology. The opportunity analysis breaks down into three sections – blockchain 1.0 (currency and payments), 2.0 (Smart Contracts, Programmable Assets, Decentralized Autonomous Entities, and Proof of “X”) and 3.0 (non-economic applications).

Colangelo noted on how he hopes opportunities for Bitcoin and block chain will be perceived:

“Goals exist both on a large, strategic scale such as human empowerment, and also on a more tactical scale, such as specific opportunities or use cases. Since many of these specific opportunities fit within multiple overarching goals, the first section will address overarching goals and tie specific opportunities to each of them.”

He continues:

“The diversity of viewpoints represented by the authors of this paper means that the authors, and ultimately the signers, cannot endorse the idea that the realization of the enumerated goals are in themselves worth the cost of disruption, or that such a realization is in itself a goal worth pursuing. At the core of Bitcoin is the ability to send money faster around the globe, improve property rights, and enable people who have never met to fully trust one another.”

An overarching theme associated with many of the opportunities presented in the paper were challenges or “threats” that could be ahead including incumbent resistance, negative cultural reaction, criminal exploitation, transparency and market demand. The paper goes on to address the severity of each thread and make a recommendation on how to address each one.

The paper concludes with an exhibit that illustrates “Game Theory and Collaboration: A thought experiment with Decentralized Autonomous Organizations.” This section highlights a major part of the philosophy behind Bitcoin and the blockchain which have made it so popular and polarizing for so many people.

What this paper may serve as is a larger collection of some of the most achievable, yet bold ideas that industry leaders and enthusiasts are championing through Bitcoin and the block chain. While this is by no means a comprehensive list of every single application of business, government, social uses for Bitcoin and block chain, it gives the reader, at a considerable level of depth, the ability to parse through what’s exciting and challenging about this experiment.