Recently, financial services related to the Fourth Industrial Revolution are once again becoming a hot topic as the Gyeonggi Provincial Government announced that it would incorporate blockchain into its donation management system.

The blockchain-based donation management system, which enables donation management information to be shared with donors in real time, originated from concerns regarding the proper use of donations. According to a survey by the Ministry of Health and Welfare, respondents with donation experience questioned the transparency of organizations, while those without donation experience questioned the trustworthiness of organizations.

As the form of employment changes due to the Fourth Industrial Revolution, the types of financial transaction customers are also expected to change. Accordingly, it is predicted that blockchain will become more active and non-traditional payment systems such as mobile money and P2P (peer-to-peer) will spread.

Blockchain is commonly referred to as a technology that prevents money from being paid more than once when using electronic currency (Bitcoin) between transaction parties (P2P). Overseas, it is being used in various fields such as e-commerce, finance, fintech, public data, royalty payments, crowdfunding, stocks, Bitcoin, medical data, social media, smart contracts, and IoT platforms. For example, Estonia issues digital permanent residency based on a blockchain called 'E-Residency'. With a single personal PIN, it is possible to access public institutions, conduct banking transactions, perform online identity verification, and even authenticate documents. Gyft in the U.S. exchanges Bitcoin for gift cards equivalent to a certain amount. BTCjam is a P2P lending company that raises funds via QR codes using Bitcoin. MobiKwik in India allows users to top up their accounts online to pay mobile phone bills and utility bills.

In Korea, blockchain is primarily used in the financial sector. Paygate has been providing 'Safert' to P2P companies since 2015. Safert is a blockchain-based platform that offers fund collection, escrow, currency exchange, and settlement services. Jeonbuk Bank has integrated BLOCO's blockchain Open Keychain technology into its mobile banking app's simplified login service. Last August, Shinhan Bank launched the 'Shinhan Gold Safe Service,' the first in Korea to issue purchase exchange certificates and guarantees for gold bars.

Lotte Card introduced a blockchain-based fingerprint authentication service to its application, enabling identity verification without accredited certificates or passwords. KB Kookmin Card also introduced a blockchain-based identity verification service.

Blockchain, not a technology, but a discourse

At ICT Convergence Korea held on the 23rd, Blocko CEO Kim Jong-hwan stated, “There are various terms used to describe blockchain. I would like to say that blockchain is a discourse, not a technology.” He explained, “Blockchain is a system that runs on top of a computing system that performs parallel and distributed processing for tasks handled by a single existing database.”

Blockchain is different from escrow payment methods that secure security through centralization. While traditionally problems were solved by someone possessing trustworthy data and supervising it, blockchain implements the human act of supervision in software.

In this context, CEO Kim cited blockchain as the first technology that humans must create. Utilizing a structure where security strengthens as accessibility increases, blockchain is being deployed in various software sectors, including finance, healthcare, and the public sector. Bitcoin can be viewed as a collection of applications that communicate via the Bitcoin Protocol implemented on the blockchain. As the utility of Bitcoin expands, it is expected that costs within the existing payment ecosystem will decrease.

Bitcoin can be described as the only network where computers issue commands to humans, as it exists solely through contracts without a centralized government. Since data digitized through contracts becomes a trust and is shared, people invest in the network, effectively driving the capital market.

CEO Kim stated, “The blockchain currently used in Korea is in a simple form. It is compatible with public and private certificates and is used for light tasks.” He added, “Starting with finance, attempts are being made to utilize it in various fields such as the public sector, refugee management, donations, and automated medical billing. Since the application areas are so broad, there are limitations to what a startup can achieve alone. We are striving to popularize blockchain in Korea through collaboration with the market.”