In the world of enterprise, Korea is one of the first countries to see a concentrated push towards adopting blockchain solutions. Large enterprises, consortiums, and even entire industries have already committed to entering private and public chain networks, for the purpose of transacting in a more efficient way and unlocking access to powerful cost-saving DApps. Along with this concentrated push, a new global industry is emerging for the development and implementation of blockchain technology. The main goal of this industry is to build custom-tailored private chain and public chain solutions. Forward thinking industry players also put a great deal of emphasis on cross-chain interoperability and connectivity as a whole.
In this article, we will explore the blockchain industry in Korea and the interplay of two central players in the blockchain solutions market – Samsung SDS and ICONLoop.
Samsung SDS and ICONLoop
As of now, the two main players in Korea for private chain onboarding are Samsung SDS & ICONloop (theloop). Samsung SDS is a subsidiary of Samsung group and is known for providing IT and consulting services for enterprises. It’s a well established company, with over $8B in revenues 2018. Since 1985, Samsung SDS has provided products and services related to mobile security, digital identity, retail experience, analytics, IoT, and now blockchain. In the area of blockchain, Samsung SDS has made significant moves towards integrating blockchain technology with government and industry.
Samsung SDS’ core offerings in the area of blockchain center around a technology called Nexledger. Before we dig into the details behind this technology, it is interesting to note that Samsung SDS is integrating its current fintech products with Nexledger architecture, as implied here:
Samsung SDS also recently launched a digital finance platform to provide a variety of services being operated on the Nexledger platform. The services include Digital Finance Concierge and AI Virtual Assistant, which are powered by Samsung SDS’s capabilities on artificial intelligence.
- IDC report on Samsung SDS, 08/19/2018
On the other hand, we have a project called ICONLoop (The Loop), which is a private blockchain solutions company started by DAYLI financial in early 2017. DAYLI Financial Group is a highly successful startup in the Korean fintech industry. Founded in February 2015, DAYLI raised just under $100M privately and has quickly become one of the largest fintech companies in Korea. DAYLI itself is a subsidiary of a massively successful “unicorn” startup called Yello Mobile, which launched in 2012 and is already valued at more than $4B. Like Samsung SDS, ICONLoop has also made deep progress in its business development efforts with multiple consortiums and industry contracts in Korea.
ICONLoop’s core product in the area of blockchain is called loopchain. It’s a private chain architecture for enterprise and consortium fintech solutions. It already hosts impressive enterprise products, including Chain ID, U-coin, H-sign and more. We will dig deeper into these specific products in a future article about adoption within the ICON ecosystem.
Samsung SDS Progress & Adoption
Since 2016, Nexledger has made significant progress in business development with Korean banks, government entities, and other industry consortiums.
According to the most recent Samsung SDS publications, Nexledger has use-cases in the following areas:
- Digital identity
- Digital payment
- Digital stamping
- Supply chain finance
- Global warranty program
- Digital provenance
- Digital financial concierge service
It seems, however, that Samsung SDS has only publicly mentioned two blockchain-related products – Nexsign and BankSign
Nexsign – Biometric Authentication Solution
Nexsign was first mentioned in relation to a Nexledger test project with Samsung Card, the conglomerate’s credit card company in October 2016.
- Using Nexledger’s time stamping solution, Samsung Card was able to eliminate 3rd party data leaks and reduce the cost of acquiring new customers by 35%. They also were able use biometric authentication to remove the cumbersome sign-up process for add-on services, reducing the abandonment rate during sign-up from 70% to 0%
BankSign – Identity Verification Solution
Although it is not clear whether BankSign is related at all to Nexsign, we already know that 5 major korean banks from the Korean Federation of Banks (KFB) will work together with Nexledger to implement an inter-bank identity verification solution. As of February 2018, banks include: Jeonbuk, Busan, Hana, Kookmin, and Shinhan. Commercial banking services will be added by the summer of 2018.
- Commercial banking services will begin by the end of the summer of 2018, with the inter-bank platform becoming the first worldwide to roll out Digital Identity and Digital Payment services to millions of customers.
Shipping Industry – Ocean Shipping Logistics Blockchain Consortium 2017
As of September 2017, Samsung SDS launched an effort to streamline data flow for the shipping industry. The Ocean Shipping Logistics Blockchain Consortium was formed to run a pilot program for Samsung SDS’ blockchain solution. Findings from the first Proof of Concept report that processes have been successfully digitized, confirmation processes have been automated, and smart contracts are also on the way. Lately, there has been a lack of new information regarding this project.
Seoul Metropolitan Government – Information Strategy Plan Order 2022
In November 2017, Samsung SDS CEO Won-pyo Hong told the public that Samsung SDS won an order by the Seoul Metropolitan Government for ‘Establishing an Information Strategy Plan (ISP) for innovation in building blockchain technology for the city of Seoul’. The government plans to design future models based on blockchain technology to improve welfare, safety, traffic and other municipal affairs.
Seoul city will first apply block-chain technology to areas that need to use personal information, such as the payment of unemployed youth allowances and the sale of used cars, such as Janganpyeong used cars, and then spread to the entire municipal administration by 2022 to strengthen citizen convenience and administrative transparency.
ICONLoop Progress & Adoption
Like Samsung SDS, ICONLoop has also succeeded in securing impressive deals and starting ambitious projects in multiple industries. Loopchain currently has existing projects in capital markets, insurance, education, and healthcare industries, as well as a recent project with the Seoul municipal government.
Chain ID – Decentralized Identity Authentication Solution
As early as 2014, the South Korean government has been pushing for the creation of a brand new national identity system for its citizens.
The ID numbers and personal details of an estimated 80% of the country’s 50 million people have been stolen from banks and other targets, say experts. Some 20 million people, including former president Park Geun-hye, have been victims of a data theft from three credit card companies.
Now that the country’s population owns 40 million smartphones, with 85% of South Koreans have access to high-speed networks, the timing is perfect for a new ID authentication solution to be built.
Chain ID is one of the leading solutions for this problem. The ICONLoop team partnered with Raonsecure’s biometric identity standard – FIDO, to build Chain ID, a system for decentralized identity authentification. Currently, Chain ID has already been adopted by 11 of the largest securities companies in Korea. ICONLoop is working closely with the Korean Financial Investment Association (KOFIA) to provide blockchain solutions for 27 major securities firms through the Korea Financial Investment Blockchain Consortium.
In addition to gaining adoption within capital markets, Chain ID has signed an MOU with Samsung Electronics to incorporate Chain ID in Samsung’s ‘Samsung Pass’ service, indicating a potential for Chain ID to reach hundreds of millions of smartphone users globally.
Insurance Auto-claiming Service
ICONLoop is partnering with three major players in the ‘Insurance Consortium’ to build a blockchain and IoT service that enables automatic insurance claims payments to policyholders. This solution allows insurance companies and medical organizations to share certified information about insurance, and provide automatic insurance money to hospitalized policyholders. This project is led by ICONLoop as the blockchain provider and LoRaWAN as the IoT network provider. LoRaWAN is the world’s first commercial IoT service, developed by SK Telecom (largest telecom company in Korea), and Samsung Electronics. This project is backed by the National Information Society Agency under the management of the Ministry of Science, ICT and Future Planning.
Currently, the project involves Kyobo Life Insurance, D. Lemon – an insurance technology firm, and One(Won), a hospital medical records service company. Hospitals onboarded include Inje University Sanggye Paik Hospital, Sahmyook Medical Center, and The Catholic University of Korea St. Vincent’s Hospital.
Precision Health Information System (P-HIS)
Precision Healthcare Information System (P-HIS) is an initiative led by ICONLoop to boost data integrity and promote the exchange of data between leading Korean healthcare institutions. So far, the three components of ICONLoop’s solution include a data integrity solution, a cross-border digital signing system, and a health coin. Currently, the solution is being adopted by the healthcare consortium, which includes:
- Gachon University Gil Hospital
- Pusan National University Hospital
- Daegu Catholic University Med. Centre
- Keimyung University Dongsan Medical Centre
- Konyang University Hospital
- Chosun University Hospital
- Chonnam National University Hwasun Hospital
Korea University Hospital will also take part in ICONLoop’s P-HIS solution.
Its first project, in cooperation with the government and other hospitals, is a cloud-based precision medicine hospital information system that will help with synchronizing databases between hospitals, according to Sangheon Lee, a professor at the hospital.
U-Coin is a blockchain digital currency for university students at major Korean universities. It will be used for payments of all sorts, including Smart Vending Machines, tuition, scholarships as well as easy payments and transfers systems at schools and in university towns. U-Coin is currently available at three campuses including Sogang University, Korea University and Pohang University of Technology, and at nearby merchants. The project received a grant from the Ministry of Creation and Science in April 2017.
ICONLoop is also discussing the process of building a blockchain campus in more than 20 universities including Postech and Yonsei University.
WeBee Coin – Woori Bank Digital Currency
In August 2017, Woori Bank, one of the top Korean nationwide banks signed an MOU with DAYLI and ICONLoop for the development of a digital currency and trial of a blockchain ID verification solution (Chain ID). The proposed digital currency has been tentatively named WeBee coin. The purpose of WeBee coin will be to serve as a loyalty points system until it fully transitions into a digital currency. Unlike Bitcoin, WeBee coin will be built on a private blockchain (loopchain). However, knowing the ecosystem behind loopchain and ICON, we can speculate that WeBee coin will eventually be integrated with ICON’s public blockchain ecosystem.
Woori Bank plans for this new digital currency to be integrated with WeBee Honey, a loyalty program for Woori Bank’s customers. Later on, there are plans to implement WeBee coin among affiliated stores, universities, and local governments.
In June, Woori Bank conducted a pilot demonstration of WeBee coin in LG Science Park, a campus for eight of LG’s Korean businesses which is currently under construction, due 2022.
Customs Clearance Processing Solution
ICONLoop’s loopchain technology has been chosen to process Korean e-commerce exports and imports. Loopchain will be used to streamline the customs clearance process, from initial order to import declaration by running nodes between e-commerce, shipping and courier companies. This will lower logistics costs and lower the risk of illegal activities.
On May 28th, the Korea Customs Service and eight other organizations including Nomad Connection, Matrix2b, CJ Korea Express, and Lotte Global Logistics signed an MOU with the goal of launching a pilot project by the end of the year. KCS plans to apply blockchain technology to all e-commerce import and expert services shortly after.
Chain Sign is a contract signing platform built by ICONLoop and Cyberdigm, a specialized contract management platform. It is used to reduce the costs of current contract processes, eliminate the lack of trust in notaries, and increase the security behind contract processing. Chain Sign will create legally binding contracts integrated with smart contract technology. It will be used primarily for frequently-repeated contracts such as rent or utility bills, which will be automated through smart contracts and stored on an immutable ledger.
Chain Sign’s current clients include the Korean government’s regulatory authority, Financial Supervisory Service (FSS), and Samsung Electronics.
Seoul Blockchain Standard Platform
On August 24th, the ICON foundation released an article explaining ICONLoop’s participation in a new blockchain initiative by the Seoul Metropolitan Government. ICONLoop was chosen to apply its loopchain technology to the Seoul Blockchain Standard Platform, which includes a project for a used car trading system, and a mobile-voting system for Seoul citizens. Additionally, the government is seeking out an identity verification solution for services such as a Korean citizen card, automobile mileage integration, subcontract payment, and more. As of now, loopchain will be the primary blockchain solutions provider for these projects.
The Private Chain Battle
Disclaimer: Information below is highly speculative.
Although there is still a general lack of public information regarding the progress of Nexledger and loopchain, there seem to be some interesting parallels that imply competition going on between the two private chain technologies. From the onset, here are some of the most interesting findings:
- Close resemblance of Chain ID and Nexsign
Both Chain ID and Nexsign are identity verification solutions built on private blockchains, integrated with biometrics technology. One can speculate that both projects were created as a response to the Korean government’s call for a complete remake of the current citizen ID card system. Both share similar technological qualities that make them effective solutions for solving the identity theft and certified certifier problem.
From an adoption perspective, both projects are targeting consortiums in the financial industry – Chain ID is focusing on securities companies in KOFIA, whereas Nexsign is targeting banks in the KFB consortium.
Interestingly, one might expect that Samsung SDS would be able to land a contract for Nexsign with Samsung Pass, as both companies have the parent conglomerate ‘Samsung’ in common. Knowing this, and knowing the sheer size difference between Samsung SDS and Dayli Financial Group, it is quite impressive to see how much progress ICONLoop has made from a business development perspective. From the quantity of blockchain project initiatives alone, ICONLoop greatly beats out Samsung SDS, as far as we can tell.
- Integration with Institutions
From the perspective of integration with institutions, ICONLoop seems to be ahead of Samsung SDS with its blockchain technology. Samsung SDS has had success integrating Nexledger within some of the largest banks in Korea, and they have had a large pilot project within a massive shipping consortium. However, apart from these wins, Samsung SDS appears to be lagging behind in terms of having fully-functioning solutions, as compared to ICONLoop. Loopchain has seen successful integration with securities companies, hospitals, universities, insurance consortiums, and the customs clearance industry, with many more pilot projects in the process as well.
- The Seoul Blockchain Contract
Perhaps the most interesting finding from all of this research relates to the recent news of the Seoul Metropolitan Government deal with ICONLoop. The reason why this is such an important piece of news, is because of its connection to the earlier Samsung SDS order by the Seoul Government in 2017. Both times, the Seoul Government mentioned giving out a proposal for a personal information (identification) solution and a used car trading solution. While it seemed that Nexledger might be the platform chosen for this project back in 2017, it appears now that ICONLoop has been chosen instead to lead this initiative. Although this is largely speculation, this might imply that the Seoul Government consciously compared the two platforms (Loopchain and Nexledger) and found more benefits in using ICONLoop for this specific project.
It will be interesting to see any further developments that these two projects will make in the race for blockchain technology adoption among industry in Korea. Knowing that ICONLoop has integration with a global public chain network (ICON), one might believe that ICONLoop has a head start towards entering the global enterprise market for blockchain solutions. It is equally interesting to ponder the relationship between the two companies behind this, and whether they are actually competing for deals. The recent Seoul blockchain contract definitely points towards this possibility. As for the parent companies behind this technological race, there is a fun narrative to consider – a race for adoption of blockchain technology between two of the most impressive technology solution companies in Korea, Yello and Samsung SDS.
Stay tuned for a follow-up article, exploring the Korean government’s role in all of this, and more analysis about the future of blockchain in Korea.