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Blockchain: Evolving into Everyday Services - Part 1

UDC Story - Insights from UDC 2018

*This post is a translated excerpt from Proof of Report UDC 2018 written by Ran Ko, CCO of Join:D, a blockchain media affiliated with JoongAng Daily.

[UDC Story - Insights from UDC 2018]

Blockchain: Evolving into Everyday Services (feat. Developers)

“17 years ago, I was abruptly called to attend a meeting chaired by the vice minister of the then-Ministry of Information and Communication. I rushed over to the top floor of the KT building in Gwanghwamun, where representatives from Yahoo and Daum, major internet portals at the time, were also present. It was a serious atmosphere, to say the least.

The ministry officials began grilling the company reps, and it lasted for over an hour. The basic gist was this:

‘Lack of supervision over free email services has resulted in easy access for teenagers. Mass emails containing harmful content including sex, gambling, violence, and suicide are being sent to teenagers with zero oversight. Though both the media and parent groups have raised these issues, internet portals generating massive revenue from email services have failed to offer any solutions. Aren’t you parents yourselves?!’

Break time. We were all speechless. I decided I had to say something. Our company Naver began its email service later than Daum or Yahoo so there was less to lose if the service was shut down over this. More importantly, I was just too angry to hold back. I strongly appealed our position:

‘First, the current law forbids us from reading user emails without their consent. And I don’t think that should be permitted under any circumstance anyway. Second, portals do not benefit from these mass emails, they lose money. Third, I know who actually makes money from these mass spam mails.’

All eyes were on me. They pressed me to disclose the name of the culprit.

‘It’s KT, the owner of the building we’re currently holding this meeting in.’

At the time, companies that directly operated internet data centers (IDC) could send mass spam mails very quickly and very cheaply. KT’s IDC market share was around 55%.

Suddenly the meeting came to a stop, and the officials began talking amongst themselves. Things were getting a bit hectic.

‘Today’s meeting is over.’

The meeting was over. After all the heated talk about the need to protect teenagers, it was over just like that.

Above is a paraphrase of a Facebook post written last January by current Bear.Better co-CEO Kim Jungho. Kim is one of the founders of Naver and was the CEO of NHN Hangame. The reason for recalling this 17-year-old memory was the Korean government’s latest announcement regarding cryptocurrencies. Park Sang-ki, the Minister of Justice, harshly condemned the cryptocurrency market, even mentioning the possibility of shutting down all the exchanges. Kim couldn’t help but find similarities to his own experiences and ended his post by saying, “Anytime negative side effects arise from services based on new technology, Korean bureaucrats, much like their Chinese counterparts, can only think about regulations and restrictions. It’s the same kind of bureaucracy we’ve seen forever, and history continues to repeat itself.”

Preconceptions can be an efficient tool that assists the decision-making process. A mechanism that allows us to quickly assess the various objects and situations we encounter on a daily basis. Since preconceptions stem from experience, the information it offers has a higher probability of being accurate, which is why it has served a critical role in aiding mankind in its constant struggle for survival.

However, preconceptions can also be an obstacle when making decisions involving new objects and situations. This is why numerous experts of their times have made absurd statements when forecasting the future of new technology.

“I think there is a world market for maybe five computers,”

Thomas J. Watson, then-president of IBM is alleged to have said this in 1943. IBM initially began in 1911 as CTR, a New York company that made clocks and scales. Watson changed the company’s name to ‘International Business Machine’ (IBM) in 1924 because he defined IBM as a company that made ‘machines.’

What’s the first thing that pops into your head when you think of computers? Most of you will probably think of a personal computer (PC) placed on a desk. This was, understandably, not the case 70 years ago. Watson likely imagined something akin to the huge machines that you find in data centers, with the added thought that five of those would be more than enough to handle the needs of most businesses.

“$500, fully subsidized, with a plan! That is the most expensive phone in the world and it doesn’t appeal to business customers, because it doesn’t have a keyboard, which makes it not a very good email machine”.

This is a piece of criticism Steve Ballmer had for the recently-launched iPhone in 2007 while CEO of Microsoft. Microsoft monopolized the computer market at the time, and mobile phones offered limited computing power, not to mention tiny keyboards prone to typos and screens that made for uncomfortable reading. Paying 500 dollars for a mobile phone, even with a few additional features? Ballmer had faith that consumers would not open their wallets so easily.

Unlike Bill Gates, Microsoft’s founder, Ballmer was a typical model student. He scored a perfect 800 on his math SAT and enrolled at Harvard, where he met Gates. Gates soon dropped out of school to launch his company. Gates asked Ballmer for help, but “dropping out” was an unfathomable concept for the latter and he joined Microsoft only after graduation. Ballmer’s mindset was simply not open to the idea of dropping out, or to consumers paying 500 dollars for a mobile phone.

Blockchain is the most controversial new technology of the 21st century. Some claim the technology is so innovative that it will change the way society is structured, while others say it is the most convoluted and elegant scam in history. Some say it’s the next internet, while others say it’s nothing more than a mirage.

Public opinion seems to be swaying towards the less flattering viewpoint. There are definitely major limitations. The number of cryptocurrencies listed on exchanges near 2,000, but Bitcoin is probably the only one that can be declared a successful service. Ethereum, with goals of becoming a ‘world computer,’ can only support 20 transactions per second (TPS). When transaction volume spiked due to the rising popularity of the blockchain-based game CryptoKitties, transactions took more than one day to be approved.

Fraud is also rampant, tempting people with 100 times returns on “the world’s first OOO coin on the blockchain”. In Korea, buildings near Seolleung Station in Gangnam are full of pyramid schemers selling fake coins disguised as cryptocurrencies. And the combination of new cryptocurrency technology and the old legend of sunken riches produced the recent debacle surrounding the Russian treasure ship Dmitri Donskoi.

The few developers with strong understanding of blockchain technology are firm believers in its potential. Song Chi-hyung, the chairman of Dunamu, certainly belongs in that category. To elucidate these possibilities, Song brings up the concept of “Infrastructure Inversion” from Andreas M. Antonopoulos, the author of Mastering Bitcoin.

Think back to when automobiles were first produced. There were no proper roads, only horse trails that quickly turned to mud whenever there was rain. The lack of proper roads, combined with the need for fuel, made automobiles a less than ideal transportation option. Replacing horses with cars probably seemed ridiculous at the time. These muddy roads were never meant for cars and prevented them from maximizing their functionality. Once asphalt roads and gas stations began popping up, choosing between cars and horses was no longer a debate. The emergence of new technology such as four-wheel drive and hybrid engines further eliminated much of the limitations of early automobiles.

Our current social system is fully centralized. This includes technology, financial, and civil infrastructure, and to truly realize the possibilities of blockchain technology, there needs to be decentralized infrastructures that can serve as the asphalt road that takes it to the next level. Criticisms surrounding the viability of blockchain technology are not too different from the ones early automobiles faced while trudging along muddy roads. We’re trying to predict the future while blinded by our own limitations.

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