|BOSCoin CEO Yezune Choi responds to a question during an interview in Seoul, last week. / Courtesy of M&K PR|
By Kim Yoo-chul
Blockchain technology is something new but it is definitely promising and has huge growth potential on multiple fronts with companies dedicating themselves to it.
Facebook and Samsung, for example, have recently created teams to study how the blockchain technology behind bitcoin, the most popular cryptocurrency, could be used in developing new products.
A few other options are also being explored. The project financing industry is one example that could benefit from distributed ledgers, as well, with BOSCoin CEO Yezune Choi pushing hard to bring credit and blockchain together in the years to come.
While it's true that there's been a lot of buzz about the pros- and cons- of blockchain in the digital currency community, Choi claims public blockchains are an appropriate application of the protocol in terms of the creation of a relevant ecosystem.
A public blockchain is basically the model used by bitcoin, ethereum and litecoin, and could be regarded as the original distributed ledger structure. The technology can receive and send transactions from anybody in the world. They could also be audited by anybody, and every node has as much transmission power as any other.
"Because each node on a public blockchain has as much transmission and receipt power as any other, they are not only decentralized, but fully distributed. This fits well with startups and companies, which want to raise funding to promote their business ideas with little paperwork, and investors seeking a high return with greater accessibility to company details," Choi said during an interview in Seoul, last week.
BOSCOin is Korea's first blockchain initiated by a blockchain OS via an initial coin offering (ICO) in May last year. The initial issue amount was 5 billion BOSCoins and its ICO earned 15.7 billion won in backing in nine minutes, according to the company. It was listed on Kucoin.
"Pursuing ICOs is not our primary focus as BOSCoin is hoping to get closer towards ways to creating new financing models, which haven't been existed before. The core value of the public blockchain is that it's ideal to create new credit for all interested parties," said the CEO.
BOSCoin has partnered with a local energy distribution company Energy7 under which the latter procures oil with BOSCoin providing financial support.
"Specifically, we are interested in project financing in commodities including meat and raw materials. We can give them financial support and the recipients can get their borrowings back plus commission after the completion of distribution of their products to the market," Choi said, adding public blockchain technology needs to be scalable and transparent in this industry moving forward.
He said the GM deal was another good example on how public blockchain technology could also be used even in non-consumer industries.
"For the GM issue, when you want to raise billions of dollars through a public financing, then you will have lots of complex issues which may affect the regional economy. It's also possible that GM commits its car-manufacturing factory in the local provincial city of Gunsan as collateral in a revision of its borrowing agreement with creditors using the blockchain system. This is, I think, one plausible liquidity option," according to the CEO.
In a related note, the government said it has reached an agreement with GM to inject $4.35 billion in funding and other measures to turn around the unprofitable Korean affiliate.
He noted that the blockchain or blockchain-related industries are still in their early stages and will be rationalized after industry consolidation.
"The global blockchain industry will see heavy ups and downs, meaning the market will remain volatile over the next few years; however, this is the needed process that is required. Market discipline will come to play a greater role in ensuring market stability," Choi said.
As a back-up move, BOSCoin developed an electronic voting system based on a homomorphic encryption solution that guarantees anonymity (secret voting) and singular votes (equality).
The development is aimed at gaining trust and credit through blockchain and cryptocurrencies. "Homomorphic encryption will be used for purposes beyond electronic voting system. It will act as a core tool for the perfect protection of BOSCoin's infrastructure."
Like cryptocurrencies, blockchain technology also has its flipside as it is not matured and speculative. "What I want to say is that financial regulators killing an entire industry isn't always good. If necessary, the markets should be regulated, but properly, however, technology is evolving and we need open discussions to get the tech on the right and manageable track."
New Financial Supervisory Service chief Yoon Suk-heun said the regulator will look at revising some regulations which are now currently applied to the cryptocurrency market as the former Seoul National University visiting professor said there are some "positive aspects" regarding cryptocurrencies.
Korea is the world's third-largest cryptocurrency market after the United States and Japan. But the market went south after the country enforced a ban on all "unnamed cryptocurrency trading" by mandating _ among both cryptocurrency exchanges and the banks providing services to them _ the use of real-name trading accounts.