The blockchain has been regarded as the core technology that will lead the fourth industrial revolution, but there is a sharp contrast between the conflicting views on the blockchain technology in Korea. Large companies such as Samsung, Kakao, and SKT have already made dedicated blockchain teams/departments and announced their own business models. However, there is still no government policy to encourage them.

In the face of these domestic situations, there is an indigenous company that has entered the blockchain industry as a global player. Dae-Sun Chung, CEO of Hyundai BS&C, a third generation of Hyundai Group, founded Hyundai Pay, a Fintech company in December 2016, and established Hdac Technology, a blockchain technology company in Crypto Valley, Switzerland, in October of the following year to respond quickly to IT trends.

Hdac, which unveiled its MainNet in May 2018, pursues a blockchain technology company that can pervade every aspect of markets and industries based on the technology development strategies prioritizing commercialization. For this, Hdac will provide services from blockchain-based B2C services, including a simple payment service or a smart home, which can be easily used by ordinary users to enterprise blockchain solutions that will bring innovation to the industrial field through convergence with innovative technologies such as IoT, AI, FinTech, and Big Data.

Hdac said in the press conference in March that it plans to launch a blockchain-based simple payment service and P2P asset-trading service. In addition, the Hdac Enterprise Blockchain Solution can be applied to a wide range of industries including construction and real estate sectors such as smart home, manufacturing sectors such as electronic contracts, purchasing, and production history management, and financial and distribution sectors such as membership points and remittances.

Moon-Ok Cho, CTO & CSO of Hdac, in charge of a helmsman as a strategic and technical supervisor in Hdac, which has begun to blow the blockchain innovation in various fields, emphasized the visions for blockchain ecosystem through the interview with ACROFAN.

Q1. What do you think about the current status of the domestic blockchain industry?

It is true that the domestic cryptocurrency market had been so hot that the so-called ‘Kim-P (abbreviation for ‘Kimchi Premium’, which means that the market price of the domestic cryptocurrency is higher than that of the foreign cryptocurrency) was coined. The abstruseness of the blockchain technology and coin economy brought scammers and speculative forces, and also various negative effects. Due to the speculative frenzy started before the blockchain proved its usefulness, the misunderstandings to view blockchain and cryptocurrency as the same concept, as well as negative publicity about cryptocurrency, have stiffened.

Fortunately, domestic companies are doing well. The reason why the blockchain industry in the whole world is paying attention to the Korean market is not just about 'Kimchi Premium'. There have been companies that challenge entrepreneurship in an environment that is not friendly, and I believe that the efforts and intentions of these companies are the driving force for putting Korea in the position of a blockchain powerhouse. In recent years, large corporations in Korea have been making efforts to foster relevant businesses such as building a dedicated blockchain organization, which is a very encouraging phenomenon.

Q2. What do you think about a lot of skepticism about the impact of blockchain?

A blockchain is a technology that makes transaction information into data blocks and links them, and it prevents data from being forged or falsified through distributed computing method. Therefore, it is the best way to apply to finance or payment services for enjoying the technical characteristics of blockchain. However, these areas are closely related to the national economy and governance of governments, and as such, they are strictly controlled at the national level. That's also why the government takes time to prepare related laws and regulations.

However, companies are limited to the development of related business until the institutional framework is established. In addition to financial and payment services, there are areas which can take advantage of the technical characteristics of the blockchain such as services managing important documents including copyrights, legal documents, and contracts, and industrial areas including logistics and trade. Especially, when blockchain is applied to supply chain management (SCM) area, it is expected that the effective value for all the supply chain participants will be very great.

In the process of supply, from raw materials to manufacturers, wholesalers and finally end consumers, many processes exist and participants with various roles are involved. The only technology that guarantees the reliability, security, transparency, and scalability of the data generated here is blockchain. The cost reduction by simplifying unnecessary verification procedures and manual work is the main aspect, and the power of the blockchain, combined with technologies such as IoT, cloud, and AI, will be enormous.

Q3. It has been quite a while since Hdac had collected substantial funds through ICO in 2017. Isn’t there any materialized business yet?

The story of collecting 300 billion won in ICO follows us, but the price was based on the time when the Bitcoin price was over 20 million won. Now, since the bubble has burst, it is time to pay more attention to every step. As we avoid ‘showing off’ marketing activities that deceive people’s eyes and ears like some other blockchain projects, it might have seemed that there is no materialized content, but it is not true at all. Hdac is working diligently and steadfastly to be worthy of the title 'Hyundai Group' and is carefully executing budgets to avoid waste of the funds.

As stated at the press conference held in March, Hdac has completed or is carrying out multiple POC projects for Hyundai group companies in various industries. In the public sector, discussions on the actualization of business are underway since the signing of MOU between Busan City and Hyundai Pay in February, and there are still many other things that have not been disclosed yet. I would like to take this opportunity to say that Hdac has worked with Hyundai Heavy Industries to complete the POC for applying the blockchain to the existing electronic contract system, and is currently negotiating the contract of the further project.

Q4. It seems that the government still has not decided responses to blockchain. What do you think about it?

As long as the blockchain provides the ability to issue a cryptocurrency, it is, in fact, desirable for the government to be cautious about this. It is true that the negative effect of the speculative frenzy of cryptocurrency was considerably big, but the time given to a player in the IT competition is very short. Because the whole world is competing in real time without the border and day and night, it is likely to miss the 'Golden Time'. I think a cautious decision does not necessarily to be long.

The operating system installed in most smartphones around the world is Android which was developed by Google and first launched in 2008, or Apple's iOS first announced with iPhone in 2007. Now, even if an outstanding operating system is developed by a Korean company, I think it is almost impossible to go through between them. No one will want to use an operating system that does not have an available app, and no developer will develop an app for an operating system without a user. The similar situation can occur in the blockchain.

A major global IT company, Oracle's vice president of the blockchain development group, said in a recent media interview that more than half of the world's enterprises will use blockchain technology in three years. If we cannot avoid blockchain as it is the current of time that cannot be defeated, it may be better to prevent the side effects by putting it in the system. Furthermore, I believe that 'post-Android' could be a blockchain platform developed by a Korean company if the government provides a promotional policy for Korean companies to lead the global market in the long period.

Q5. How do you foresee the trends of blockchain market for the next five years?

While international standards are important, 'De Facto standards' are more important in the IT field. There are a number of international standards organizations such as IEEE, W3C, GSMA, and ISO, but now, the technologies and services created by open-source projects and companies based on them, Google or Amazon for example, becomes the standards. In other words, when people use it a lot in the real market, it becomes the standard, and we must be able to lead this de facto standard.

At present, I think that Etherium is the closest to the de facto standard. Various technology standards starting with ERC become projects, and many developers voluntarily gather here to create a strong ecosystem based on spontaneity. It may be due to the technical superiority of Etherium, but the advantages of 'what people use most' are great. The more users there are, the easier it is to get relevant information. Also, a lot of information will make it easier for new users to come in. It is difficult for such an ecosystem to form in a short time.

From this point of view, the future of the blockchain market is likely to become a battle for hegemony. However, it is not easy for followers to take the lead in platform competition, because it depends on how many people use it, rather than how well a particular blockchain is technologically superior. As such, long-term and aggressive promotion policy of the government is urgent.

I went to MWC held in Barcelona this year. Although IoT, AI, 5G were the mains, it was not difficult to find companies preparing blockchain technology everywhere. I thought that the blockchain would be in the overall IT industry with IoT and AI at a point in the near future. Blockchain somehow got the spotlight a little early, but it is starting now. Ju-yung Chung, the founder of the Hyundai Group, always said, "Hey, have you ever tried to do it?" I think it is a spirit of the times that we all have to remind ourselves of.


Moon-Ok Cho, CTO & CSO of Hdac, in charge of a strategic and technical supervisor in Hdac Technology and Hyundai Pay, is a representative FinTech specialist in Korea, who was responsible for ‘T Pay,' the mobile payment service of SK Telecom. In early 2010, he was attracted to the potential of a service model that combines blockchain and FinTech by encountering the blockchain technology for the first time through Hoh Peter In, a professor at Korea University’s Blockchain Research Institute. Moon-Ok Cho is the first-generation architect who introduced SOA(Service Oriented Architecture) to Korea at the time of working at Samsung SDS. Taking the first step into the IT industry as a developer, he has a higher level of understanding and experience than anyone else in both IT and finance, the core attributes of blockchain technology. Recently, he has written a book on Hyperledger development which is to be published.

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