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Blockchain & Crypto Analysis

CHAIN ID, ActiveX, and South Korea’s Authentication Nightmare

Tuesday, May 22, 2018

In order to fully grasp the potential impact of theloop’s CHAIN ID, one must first understand the current digital authentication landscape in South Korea.

South Korea has always been technologically progressive. In fact, the world’s first smart city is situated 40 miles southwest of the country’s capital, Seoul. Thus, it’s no surprise that South Korea was one of the first countries to encourage Internet banking, shopping, and other services in the late 1990s.

It’s hard to believe now, but shopping and banking on the Internet was a completely new technology in the not so distant past. With this new way of carrying out business, both customers and businesses were wary of fraud. To dispel this fear, the South Korean government implemented a nationwide digital authentication system in the Digital Signature Act of 1999.

Authentication Certificates in South Korea

There are two types of certificates in South Korea – private and accredited.

Private Certificates

Private certificates are issued by institutions that are not accredited, or certified, by the South Korean government, and are only valid for specific services. For example, a bank might issue a private certificate to a customer that is only valid for services within the bank. Compared to accredited certificates, private ones are impossible to verify, valid only by mutual agreement by the parties involved, difficult to get compensation for, and are only valid for a limited scope of services. The only advantage of private certificates are that they are often easier to obtain.

Accredited Certificates

Accredited certificates are issued by institutions that are accredited by the government. Currently, the following institutions can issue accredited CAs – KFTC, KOSCOM, KICA, KECA, and KTNet. Accredited certificates, while more difficult to apply for, offer quite a few advantages when compared to private certificates. Accredited certificates are seen as legal binding endorsements, are valid for compensation in the event of damages caused by the certificate, and can be used for a variety of Internet services without the need for multiple certificates. Thus, the accredited certificate is by far the most popular authentication in Korea with over 33 million issued certificates.

How Accredited Certificates are Generated

Accredited certificates are issued by government-accredited institutions through a process of manual verification of a resident’s National ID and other documents. Following verification, a resident’s identifying details are hashed into a public/private key pair along with the issuing authority’s digital signature. This process places burden of proof on the issuing CA.

After the certificate is generated, the resident can use his or her public key for online financial services such as banking and shopping.

The Age of Internet Explorer & ActiveX

In the late 1990s, Internet Explorer was the most popular web browser in the world. Hard to imagine, right? In addition to basic browser capabilities, Internet Explorer also offered a software framework for plugin development called ActiveX. South Korean institutions ended up using ActiveX to develop software which allowed users to upload their certificates to authenticate financial transactions online. Keep in mind there is no industry-standard software. Thus, Koreans are forced to install many ActiveX plugins in order to use their assortment of authentication certificates. This can only be described as a user experience s***show with glaring security holes.

Over the next decade and a half, the rest of the world moved on. The online shopping and mobile device industries experienced unprecedented growth, and the FIDO Alliance was established. In short, FIDO provided a standardized protocol for supporting a full range of authentication technologies including biometric, fingerprint and iris scanners, voice recognition, and more. Korea’s inability to adapt and integrate with FIDO left the country at a disadvantage in the global business and trade sectors.

In May 2014, the South Korean government announced that authentication certificates would no longer be required for financial transactions under ₩300,000 (approximately $280). This was a response both to complaints about a Microsoft-centric culture and also the inability for foreigners to buy goods online because they are unable to apply for accredited certificates. One notable example was Chinese customers not being able to purchase clothes and accessories worn by characters on the famous Korean drama, 별에서 온 그대 (My Love From the Star). While this particular situation may seem a little silly, it’s a great example of how South Korea’s absurdly complicated authentication requirements effectively put a bottleneck on the country’s economy.

An official statement from South Korea’s Financial Supervisory Service read, “the revision is expected to improve the complicated security system and diversify payment methods by giving more freedom to financial firms to decide on their own security.” As a result of this new regulation, new services would eventually find their way into Korea’s complicated authentication landscape, but accredited certificates are still issued and used to this day.

theloop, CHAIN ID, and ICON

Last October, theloop revealed that its blockchain-based authentication solution, CHAIN ID, was already being piloted by 25 banks and securities companies in the Korea Financial Investment Blockchain Consortium. Half a year later, theloop announced that CHAIN ID would be used by Samsung (one of Korea’s largest companies) in their biometric authentication technology, Samsung Pass. Recently, ICON Foundation wrote, “in the future it is expected that there will no longer be classifications of certified/private certifications, and all certificates will have the same authenticity.”

Connect the dots.

  • CHAIN ID is already being used by some of South Korea’s largest banks and securities companies.
  • CHAIN ID is being implemented in Samsung Pass. Samsung has over 57% market share in South Korea’s mobile smartphone market.
  • ICON revealed there will only be one kind of certificate in the future.

After a little reading between the lines and a tiny amount of educated speculation, I have come to the conclusion that the majority of digital authentication in South Korea will happen on the CHAIN ID platform in the near future. This blockchain solution is being aggressively adopted by the country’s biggest financial and technology firms. If there’s really only going to be one certificate in the future, it’s obvious they will be issued by the first mover in the space – theloop’s CHAIN ID.

What is CHAIN ID?

Now that we’ve established that CHAIN ID will probably take over South Korea similar to how Thanos took over the universe in the most recent Avengers movie, let’s talk a little about what CHAIN ID is exactly and how it may or may not affect ICON in the future.

A Smart & Distributed Network

South Korea’s current authentication system relies on a centralized network of government-approved entities who are allowed to issue accredited certificates. This system works because a certificate’s trust value is backed by the accreditation and approval of the government. CHAIN ID, on the other hand, provides trust via a decentralized or distributed network.

CHAIN ID leverages several aspects of a distributed network to provide a secure, scalable, and smart authentication platform. The decentralized nature of the platform makes it less prone to major hacks because data monopolization is not an issue. Secondly, decentralized networks are easier to scale than their centralized counterparts. Lastly, CHAIN ID runs on a system of smart contracts and extended feature sets can be easily implemented in the system. This means complex DApp ecosystems can easily integrate CHAIN ID for authentication services.

On the CHAIN ID platform, joint authentication certificates are issued through consensus of all the nodes on the network. These certificates are called “joint certificates” because they are generated through “joint consensus” of the network participants. As a result, these joint certificates are valid for all services offered by CHAIN ID nodes. Smart contracts ensure the network’s rules are being obeyed, keeping data secure and up to date.

The Future of CHAIN ID

On a philosophical level, the concept of identity is integral to the human condition. Proving our identity is part of our everyday lives, and this aspect of modern society moving over to the blockchain is absolutely fascinating. On a technical level, CHAIN ID is just a DApp running on theloop’s blockchain engine, but I believe it has the potential to have a profound impact on South Korea’s culture and economy. With so many major companies and institutions adopting CHAIN ID, it’s only a matter of time before we see more complex ecosystems governed by smart contracts with CHAIN ID acting as an authentication layer between the real world and digital world. Keep in mind that these DApp ecosystems will require an interoperable protocol to communicate with each other.

That’s where ICON comes in.

ICON & LINE’s Joint Venture Could Lead to 200 Million DApp Users

Thursday, May 17, 2018


The ICON team told CCN that the joint venture between ICON and LINE could lead to hundreds of millions of users of LINE potentially utilizing the ICON blockchain on a daily basis to access dApps.

I thought so.

If this ends up happening, and I think it will relatively soon, ICON will be poised to become the most widely used blockchain platform in the world. At the moment, Bitcoin, the world’s number one cryptocurrency, is estimated to have less than 28.5 million users.

In News

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ICON x LINE = Unchain

Wednesday, May 16, 2018

ICON Foundation:

ICON and LINE PLUS, a global social platform with over 200 million monthly average users (MAU) worldwide, has co-founded ‘Unchain’ to build LINE’s blockchain network. Unchain aims to develop various DApp services while building synergies with ICON to expand the blockchain ecosystem.

Until now, every partnership announcement from ICON has only involved theloop (ICON’s parent company) building private purpose-specific blockchains for various institutions. While we have good reason to believe that private solutions developed by theloop will eventually use ICON’s blockchain for interoperability if needed, this is merely speculation. Thus, today’s joint venture announcement with LINE is groundbreaking. It’s the first time a large corporation has committed to using the actual ICON blockchain, and not just a private solution developed by theloop.

H.K. Lee, technical director at ICON, has been appointed as CEO of Unchain. H.K. Lee currently develops and reviews DApp teams looking to collaborate with ICON. He has garnered deep knowledge and experience of both blockchain technology and artificial intelligence through his work.

This joint venture is much more than a typical partnership. The appointment of H.K. Lee as CEO of Unchain confirms there will be a high level of collaboration between ICON and LINE.

Unchain will create a blockchain ecosystem fueled by a token economy, where the users are rewarded for their contributions to the network. DApp services discovered through ICON and Unblock, a subsidiary of LINE dedicated to blockchain research and to accelerate DApp projects, will be integrated with Unchain. This joint venture takes blockchain and decentralization another step closer to being a part of our everyday lives.

To clarify, ICON is an interoperability-focused blockchain platform that allows for DApp development. Unblock is LINE’s blockchain research subsidiary. ICON and Unblock will both brainstorm DApp projects that could be beneficial to LINE’s social ecosystem. The integration development will be done by Unchain, which is headed by ICON’s technical director.

What is LINE?

LINE is one of the world’s most popular social apps, especially in the Asian market. LINE is operated by LINE Corporation, a Japanese subsidiary of South Korea’s Internet giant, Naver. Think of Naver as Korea’s Google.

LINE’s Market Share

LINE currently has over 200 million monthly average users, and is the social platform of choice in Japan, Taiwan, Thailand, and Indonesia. I currently live in Tokyo, Japan, and can confirm this is definitely the case. LINE is the only app I use to keep in touch with my friends here. Not Facebook, not WhatsApp, not WeChat. Just LINE.

LINE Services

In addition to messaging, LINE also offers several social services to its users – LINE Pay, LINE Taxi, LINE Delima, LINE Points, and more.


Think of LINE Pay as Apple Pay, Venmo, and Splitwise combined into one app. It allows users to pay merchants, send money to each other, and split bills. For users who prefer physical payment cards, LINE also offers a LINE Pay Card via Japanese credit card company JCB. The card is linked to users’ LINE account, and offers rewards in the form of LINE Points.

Earlier this year, Bloomberg reported that LINE Corporation is “working to integrate cryptocurrencies into its messaging platform”. Now that we know LINE has committed to using ICON’s blockchain, we can speculate that ICX and its upcoming DEX platform may be used for liquidity between fiat (JPY, KRW, etc.) and LINE’s yet-to-be-announced crypto token.

I personally think LINEcoin (LNX) sounds cool.

LINE Points

LINE Points is the platform’s “reward and incentive token”, and can be earned by completing tasks on the LINE ecosystem. LINE Points can be redeemed by participating in LINE events or using the LINE Pay Card. LINE points can be converted to Lawson (a Japanese convenience store) Ponta points, Seven Eleven Nanaco points, Amazon gift cards, and more.

In it’s current form, LINE Points already offers an incentive-based reward system to users who participate on the network. I wouldn’t be surprised to see LINE Points rebranded as “LINEcoin” in the future, with the purpose of functioning as a platform token for LINE’s upcoming blockchain ecosystem.


LINE Taxi is a service that allows users to call taxis in over 90 cities in Japan. Bloomberg reported that Uber has less 1% of market share in Tokyo, Japan, which happens to be the world’s largest cab market. Part of Uber’s difficulty in the Japanese market is due to local taxi operators like Nihon Kotsu Co. (Tokyo’s largest cab company) releasing their own apps.

Interestingly enough, LINE Corporation has a confirmed partnership with Nihon Kotsu Co. giving users “access to approximately 3,340 cabs throughout the Tokyo area for the initial release”. LINE is planning to “increase cab availability by capitalizing on the nearly 23,000 taxis owned by Nihon Kotsu’s network of 129 partners as it expands to attain the industry’s largest taxi pool” in the future. With over 50 million LINE users in Japan, it’s no wonder why the nation’s largest taxi company has chosen to partner with LINE instead of an overseas solution with minimal Japanese adoption like Uber.

It’s important to know the LINE Pay is the only payment method accepted on LINE Taxi. If we do see a LINEcoin in the future,  it could be used as both a payment method for LINE Taxi and also as a reward incentive for users to use LINE Taxi to call taxis. On many blockchain platforms, rewards are correlated with a user’s activity on the platform. Thus, it’s possible that a theoretical LINE Taxi DApp incentive system could be tied to the user’s contributions to other DApps on the network. Secondly, Japan’s taxi industry is worth approximately $15 billion, and LINE Taxi’s respective transaction volume could theoretically be leveraged as a liquidity source for LINE’s crypto token on its parent blockchain – probably ICX on ICON.

LINE Delima

After launching a successful mobile delivery platform in Thailand, LINE launched Delima in Japan, a food delivery service connecting users to over 14,000 restaurants around the country. In September 2017, it was reported that Delima gained over 1.5 million users in the first 50 days after its launch. Similar to LINE Taxi, Delima accepts LINE Pay as a payment method and rewards users with LINE Points.

LINE Advertising

Advertising accounted for approximately 44% of LINE’s revenue in 2017. By using the LINE Points system, advertisers can reward users for completing certain tasks. Here’s an example graphic from LINE’s advertising guide.

For example, an advertiser like Coca Cola can instruct a user to download its official app, add Coca Cola as a friend on LINE, watch a video about a new drink, and then complete some sort of scavenger hunt in the physical world, in exchange for LINE Points.

There are quite a few blockchain projects in the advertising include AdEx, Basic Attention Token, and most recently Blue Whale on the ICON platform. This section of Blue Whale’s white paper recently caught my attention.

Big Data & Machine Learning Solution. The decentralized network, based on the same SaaS architecture as the Blue Whale’s Booking Software, is the optimal solution for collecting data. Data collected in this manner will be saved to the database in real time.

Blue Whale Big Data & ML Architecture

The saved user data will be tagged according the type of goods/services purchased through the Booking Software. The tagged and categorized data will then be used to train the Machine Learning algorithm for two different uses.

  • Using visitors’ data to aggregate and create a predictive list of potential future purchases.
  • Analyze target visitor’s purchase data to find lookalike visitors.

I think LINE could also implement some sort of machine learning into its own advertising tools. By leveraging user data stored on the blockchain, this advertising platform could take into a user’s activities on other LINE services to create extremely targeted advertising funnels and flows that appeal to the user’s interests and lifestyle. On the advertiser side, data generated from analysis of user behavior could be used to optimize ad spend.

LINE in Popular Culture

Lastly, I want to mention LINE’s brand image. The ecosystem has a number of recurring characters called LINE Friends, whom have manifested themselves into global business opportunities in the physical world – stores, cafes, media content, character goods, character licensing, and more.

LINE Store in New York City.

In the digital world, LINE Friends come in the form of LINE Stickers within the messaging app. While the app comes with a selection of stock stickers, users can also purchase new stickers with LINE Points. You may think this whole concept is silly, but LINE actually made over $268 million in 2016 from selling digital stickers.

LINE Stickers like these can be purchased in the LINE app.

In a blockchain environment, this model can be thought of as “asset tokenization”, and is similar to what Cryptokitties has managed to achieve. Imagine a blockchain-based marketplace that allows P2P exchange of tokenized stickers of varying degrees of rarity. Stickers could be exchanged for LINEcoin or other assets in the LINE ecosystem (perhaps a ticket to a sold-out LINE event), and the value of all these digital assets (denominated in LINEcoin) could be determined by live market dynamics calculated by user data recorded on the blockchain. I think this model could actually be fairly successful in the Japanese market where people love the concept of seasonality and “limited edition things”.


No matter how you look at it, this joint venture between ICON and LINE is groundbreaking. As far as I know, it’s the only partnership between an Internet giant and a blockchain platform that has been publicly disclosed.

Over the next few years, I expect to see a few of LINE’s current services transition into DApps on the ICON platform governed by AI-enabled smart contracts (DaVinci, Korea’s leading artificial intelligence and machine learning platform is made by the same people who created ICON) with “LINEcoin” acting as fuel for the network, a user-incentive token, and a liquidity source for ICON’s DEX.

Update (May 17, 2018) – In an interview with Joseph Young from CCN, the ICON team stated that “the joint venture between ICON and LINE could lead to hundreds of millions of users of LINE potentially utilizing the ICON blockchain on a daily basis to access dApps.”

Samsung Pass to Use theloop’s CHAIN ID

Friday, May 11, 2018

ICON Foundation:

On May 11th Korea Financial Investment Association (KOFIA), which theloop is participating as a technical partner to develop CHAIN ID, has signed an MOU with Samsung Electronics to incorporate CHAIN ID in Samsung’s ‘Samsung Pass’ service.

Samsung Pass is an “identity management as-a-service” that enables secure access through biometric authentication. For Apple users, Samsung Pass is essentially Samsung’s version of Touch ID & Face ID. Samsung phones account for over 50% market share in the South Korea mobile phone market, so this partnership with Samsung is quite significant.

In February, Samsung announced a partnership with HYPR, another decentralized authentication solution. From HYPR’s website, it’s obvious that this technology is a game changer—use cases include online banking, retail, insurance, employee access, VPN access, ATMs, cars, homes, and more.

After today’s announcement, I think Samsung is currently working with several decentralized authentication solutions targeted towards different purposes. For example, theloop has consistently mentioned CHAIN ID being used in the securities and banking industries. On the other hand, HYPR’s vision includes use cases like employee access and IoT security. From a business standpoint, working with multiple solutions is a good idea for Samsung in case one of the companies fail.

CHAIN ID is the world’s first blockchain based joint authentication system developed using theloop’s blockchain engine ‘loopchain’, and is being used by 11 securities companies in Korea.

ICON has already told us that CHAIN ID is being used by securities companies in Korea. On May 9, 2018, Korea’s Money Today revealed Korean banks will start using an unspecified blockchain identification service later this year. Interestingly enough, KEB Hana Bank and Woori Bank have reported they are currently preparing to support the Samsung Galaxy S7’s iris scanning feature, which is a module of Samsung Pass. Secondly, Yonhap News Agency also reports Shinhan Bank is also considering implementing this technology for their customers.

It’s worth noting KEB Hana Bank and Shinhan Bank both appear on theloop’s list of official partners, while Woori Bank announced a partnership with theloop and its parent company DAYLI Intelligence to cooperate in the blockchain and digital money business.

Connecting the dots, we can presume theloop’s CHAIN ID will see real world consumer use as a result of Samsung Pass integration very soon. While I’m not sure if any of this directly affects the ICON platform, it’s plausible that various CHAIN ID implementations in different industries will need to talk with each other at some point. Perhaps that interoperability can be provided by the ICON blockchain in the near future.

We believe that this MOU with a leading global conglomerate is a big step towards both real-world adoption and globalization of blockchain technology.

In order to understand the real impact of this partnership announcement, one must read in between the lines. By securing a partnership with a large conglomerate like Samsung, theloop and ICON have positioned themselves as the premier enterprise blockchain in Korea. Investors FOMO into ICX just like how other corporations interested in implementing blockchain technology will FOMO onto the ICON network in the not so distant future. This is the birth of ICON’s network effect—the true value of a blockchain.

Unsurprisingly, ICX/BTC rose only ~4% following the announcement of this incredible partnership. I generally try to stay away from discussing price action, but does anyone else think there’s some serious market suppression going on with ICX? It reminds me of XRP’s sideways action before a monstrous rise to $3. Just something to consider…

MOU between theloop — aSSIST Business School

Friday, May 11, 2018

ICON Foundation:

On May 10th, 2018, theloop and aSSIST (Seoul School of Integrated Sciences & Technologies) Business School signed an MOU for blockchain education alliance. The two parties have agreed to develop and provide blockchain training programs.

It’s great to see theloop expanding further into the education sector. I don’t know what the exact curriculum will entail, but I bet there will be a heavy emphasis on theloop’s blockchain products including ICON. If this is the case, theloop is literally paving the way for adoption of the ICON platform, especially with Korea’s recently changed stance on launching ICOs.

It was not easy to find good education institution which can provide both technical and business course of blockchain. Through this cooperation, it is expected bring out blockchain experts who can apply blockchain technology in business area.

Bullish on ICON. Bullish indeed.

Korean Banks to Use Blockchain Identification Services in Q3 2018

Wednesday, May 9, 2018

According to South Korea’s Money Today, Korean banks and insurance companies will begin implementing blockchain identification services in Q3 2018. The article also mentions similar services being used by the country’s securities industry last October

While the article doesn’t specifically mention anything about theloop or ICON, there is reason to believe these two entities may be involved in the implementation of this blockchain identification service.

Last October, ICON unveiled theloop’s CHAIN ID on their official blog.

CHAIN ID, Korea’s new standard for secure online identification that allows customers to use the same certificate across any of the 25 banks and securities companies that have already joined the Korea Financial Investment Blockchain Consortium. Starting in November, CHAIN ID will replace the outdated government-issued digital certificates with immutable, verifiable and interoperable blockchain certificates.

While many blockchain projects can be described as “hyperbolic” when it comes to talking up their platforms, I don’t believe this is the case with ICON. They have many established corporate and government partnerships. When they say “new standard”, they mean “new standard”.

So here’s what we know…

  • Korean banks and insurance companies will introduce blockchain identification services as early as July 2018.
  • This blockchain identification service has already been piloted in the Korean securities industry last October.
  • theloop’s CHAIN ID is a blockchain identification service.
  • CHAIN ID was piloted by Korea’s securities industry last October.
  • ICON’s mainnet is now live, ICONest will launch sometime in the next few weeks, and IISS will come later in Q2. If all goes well, the interoperability protocol should start to get real world usage later this year.

Connect the dots.