This is Part II of ICONLOOP CEO JH Kim’s interview with the Korean think-tank Yosijae: Future Consensus Institute. You can read Part I here.
We finished off the first half of this interview with a few key advantages decentralized identification (DID) has over traditional forms of ID, such as plastic cards in your bulky wallet. Let’s continue by further examining the value of DID in detail:
By allowing users to selectively provide data, DID can bring added value to users. Companies could provide advertising fees directly to individuals, a sort of “Google Ads” directed at data creators, i.e., individuals. Businesses begin to target individuals rather than platforms.
Currently estimated at KRW 65 billion, Korea’s existing ID certification market isn’t huge. Kim explains, however, that DID isn’t a certification service. It’s an app that confirms the user’s identity and a platform for distributing your personal information. This means the market is vast as existing ID services could restructure themselves in a user-focused way. Chatting and email services, too, could also restructure right away.
Kim reveals that my-ID’s selection by the Financial Services Commission (FSC) for inclusion into the watchdog’s regulatory sandbox for innovative financial services was a bit of a torturous process. There were disagreements between the regulatory and promotional divisions of the FSC, every line in the application raised issues that required solving, and every time ICONLOOP expanded the service, it had to seek confirmation with multiple government organizations.
Kim thinks that in the end, the FSC was impressed with ICONLOOP’s determination to build the MyID Alliance to create an ecosystem for issuing and using DID. While startups like ICONLOOP often collide with existing regulations, the decision to work with major industries in creating a community could resolve those conflicts.
The ICONLOOP chief says DID could yield immediate benefits online, where current digital ID solutions are inconvenient. Since DID saves your information on your device, you can use the service offline, too. For example, if you reserve a hotel room online, you still need to prove your ID when you arrive at the hotel. With DID, you can reserve your room and confirm your ID at the same time. In fact, every offline location using ID information could switch to DID.
ICONLOOP plans to launch DID service in the first quarter of 2020, beginning with a blockchain-based digital ID for the financial sector. Later, it plans to expand its cooperative relationships in the fintech, e-commerce, sharing economy and education sectors.
Kim says ICONLOOP is participating in Busan’s blockchain zone, too, by taking part in Busan Bank’s digital voucher project. DID could play a significant role in reducing that project’s administrative burden.
The steel giant POSCO, one of ICONLOOP’s partners, is planning to implement DID in the former’s “smart city” designs for Gwangyang and Pohang. Kim says since distributed blockchain technology forms the technological base of the smart city, you can design the infrastructure in a citizen-centric way. Administrative services for the public will run on DID-based citizen IDs that can connect to other cities or even centralized administrative systems. Kim said the problem is that even if you have a DID solution, national and local governments have to permit it before it becomes a reality.
As for Korea’s other two DID initiatives, Kim says it runs counter to the spirit of DID if an ID can be used only within its own community. The basis of DID is sharing. He says the most important thing is establishing compatibility based on mutual standardization, though you might see some competition in the process of achieving this.
ICONLOOP is also working to develop its technology so as to be compatible with the Sovrin Network, in which major global companies such as CISCO and IBM participate. The two have apparently been cooperating since 2017.
Kim ends by addressing what needs to be done to develop Korea’s blockchain industry.
He notes that since blockchain technology is in its infancy, there are few technical differences between counties. That said, blockchain faces major impediments in Korea due to regulations. The government mustn’t play the role of referee. He points to Japan, where the government approached blockchain not to supervise it but to promote it, the trevails of cryptocurrency regulations notwithstanding.
Blockchain technology is a technology of trust, he says. At its heart, it’s about using technology to confirm if things are progressing as agreed upon by the parties involved. In the real world, much money has been spent to see if processes are proceeding as agreed upon and to confirm the accuracy of data. Blockchain could reduce those costs considerably.
Kim says the structure of existing IT technology is vertical, as are certification and regulation structures. Since blockchain is horizontal, it’s good for building trust. Blockchain will reduce the total costs that go into establishing trust in an epoch-making way.