Raised during THEKEY AMA on July 4th
On June 20th 2018, THEKEY, the Ministry of Human Resources and Social Security (MHRSS) of the People’s Republic of China and the China Social Insurance Association (CSIA) entered into a Cooperative Agreement on Research of Blockchain Applications in Social Insurance Scheme which sets up the National Laboratory of Blockchain Technology in Social Insurance. This is official start of the application of blockchain technology by THEKEY in the largest insurance entity in the world. Against this background and in support of the above Laboratory, Catherine Li, Chairwoman and CEO of THEKEY, announced the same day to set up THEKEY Scientific and Research Fund totaling 20 million USD for the next five years with purpose of properly addressing all the challenging technical, management and regulatory issues ahead by further mobilizing resources globally.
In regards to the significant progress, Catherine held a global AMA on reddit on July 4th. Here is a summary of some typical questions raised by the community members.
Q1. How does entering into cooperation on research of blockchain application in social security service with Chinese government benefit both THEKEY and the government?
I believe social insurance needs blockchain technology for betterment and improvement of its management. On the other hand Chinese social insurance will also give blockchain a huge opportunity for its second revolution. Please refer to the statement released after the AMA.
Q2. The Government gave THEKEY exclusive access to the data, let you partner with state owned company, and even entered into cooperation research with you. While yet you are still unsure whether the government will use TKY or not. Are you just being humble?
I was not humble but conservative. The discussion with the Chinese government is still ongoing. And yes, utilizing cryptocurrency in social insurance system will surely increase efficiency and decrease cost of transactions between banks. Taking consideration of the fact that the number of cross bank transactions is huge in the Chinese social insurance the benefit will be huge. I therefore strongly believe the Chinese government will adopt cryptocurrency system in the not-so-distant future in many areas, especially in the area of social insurance.
However on the other hand it will still take unknown period of time for the Chinese legislators to work out the corresponding laws, acts and regulations in this domain which is one of the prerequisites for using cryptocurrency in the real world. As I previously reported we are still working together with the Chinese government on this subject and I am now becoming more and more optimistic.
Q3. Will our TKY token holder benefit the success of THEKEY?
There’s no guarantee of stability of TKY price as clearly indicated in our disclaimer. TKY as one of the cryptocurrencies and utility token, its price is decided by the market. What we can do is to keep the rapid, healthy and sustainable development of the project. And thus to enhance the value.
As I mentioned during last AMA, for the projects with great products, the token price might be low temporarily, but it will surely increase in the end as the project develops. Currently the priority for THEKEY is to increase the value and development of the project itself instead of only increasing the token price.
Q4. Recently, there is the news of the creation of an investment fund (ETF) in the Chinese market for Chinese crypto scopes. Do you think the government will invest in THEKEY?
There are several funds backed by Chinese government focusing on investing in blockchain technologies and we also started conversation with them. As per the non-confirmed information, the funds may invest in fiat or cryptocurrency for stake of the company or purchasing the tokens directly. We hope we can receive the investment from those funds.
Q5. Are there any requirements to the applicant of THEKEY Fund? Could the individual apply for the Fund?
With respect to potential applicants, any highly accomplished academic, commercial, government or NGO institution with outstanding achievements in relevant fields that have intensive international working background and are willing to follow all data security regulations and rules set by Chinese government are eligible to apply to THEKEY Fund. While the current 2018/19 Racing Plan is not open to individuals.
Q6. Are there any other supports will be provided to the funded project, such as technical support?
THEKEY, as the initial sponsor and organizer of the Fund, will provide significant support to all winning beneficiary/research partners. This support can include, but is not limited to: industrial and technical resources; government support as makes sense; key data support, access to the data including personal health data and other supporting data from statistically significant populations of users; the processing of health data; the provision of data experimental environments; and team work supports from THEKEY’s highly accomplished and award-winning technical team; and other related professional fields.
Q7. What type of projects or research will be funded? How to apply for it?
THEKEY Fund is open to universities and research institutes worldwide. It will support projects in the following thematic areas:
1) Research on security and supervision mechanism of blockchain technology application and data commercialization and application in China social insurance services.
2) Research on operation and maintenance of national medical resources Group Purchase Organizations (GPO).
3) Development and application of blockchain technology in China’s social insurance services.
4) Processing, analysis and application of healthcare big data.
The 2018/2019 Projects of The Racing Plan under the Fund is calling for Expression of Interests. Relevant instructions and application forms will be downloadable on THEKEY official website https://www.thekey.vip/#/Fund by July 15th 2018. And this will be announced on THEKEY social channels by then.
Q8. Will the 20 Million Scientific Research Fund be used for future research purposes only? Or do you use it for investment?
THEKEY Fund is only used for the relevant scientific research, for more details pls check
For avoidance of confusion, I need to make it crystal clear to the community: the current Fund will not be used for investment in any form for any purpose.
Q9. How do you believe THEKEY will position itself within the cryptocurrency market in the upcoming months? Will it be a household name?
TKY will be a household name. As it’s mentioned in my opening speech, TKY can be used by 1.4 billion people who are covered by the Chinese social insurance scheme.
As you may already noticed in our MVP /Testnet Progress Report which has already been released, we have tested the BDMI in the smart social insurance pay and which is indispensable and frequently used in people’s daily life.
Another fact, the social insurance payment is around 1.5 trillion USD annually. Cryptocurrency can realize the pier to pier transaction without going through the centralized bank, thus it will reduce the cost significantly. So I am certain TKY will be one of the most frequently used tokens.
Q10. As I know, TKY will be using Proof of Stake. So can I assume that staking will result in the user getting reward more TKY? And if the user get reward TKY, then where does the TKY come from? When a person using services from TKY, does the token get burn? Or are you still working on these options?
TKY currently runs on top of NEO. NEO uses DBFT. Please consult NEO documentation about the consensus algorithm. I need to emphasis that currently no matter testnet or mainnet are just for POC (Proof of Concept). Once we reach to the real world which is far more complicated, POS, POW etc., are apparently not suitable for identification purpose due to many reasons. I am now working on that part together with the best people in that area. More details will be released by the end of this year.
To answer your second question when a person uses TKY, the TKY is transferred from one party to another. It will not get burned.
Q11. People use fiat to get tokens. Then pay for service with tokens. Tokens get split up, some to THEKEY, some to service providers. Tokens never get burnt, never get lock up. How do we expect the token value to simply go up when they always come back into circulation right after its being used?
First of all, we’ll never guarantee the token price will go up as stated in the disclaimer.
In my opinion, as it’s clearly demonstrated in my opening remark, the demand for TKY in the ecosystem will be enormous when it’s applied in the biggest application scenario (social insurance) in the world. With the same amount of TKYs circulated in the ecosystem under the condition of significantly increased demand, theoretically speaking, the token price shall increase under the supply and demand token economy.
Q12. Will IDV requester be able to verify directly with the blockchain, as is done with Civic? Or will there always be a central party providing the information to the requester?
As it’s clearly pointed out in our White Paper, there will always be a central party to provide the IDV information and we are not using the same way as Civic.
Compared to other peers in IDV industry, who are also applying IDV into blockchain, BDMI has the following three advantages:
• More reliable results — The supporting data is gathered in real time, is comprehensive, accurate and reliable. The data is also validated in advance by government agencies or other public institutions.
• Lower cost — Full use of existing data sources. Avoidance of duplicate work for data collection, processing and authentication.
• Better user experience — It is not necessary for individual users to install any application or upload any information.
I need to emphasize that to have a central party is a good thing instead of a bad thing as long as the central party can address the issue in a more cost-effective way. Another thing I need to point out is as per HIPPA of U.S, GDPR (General Data Protection Regulation) of EU and Cyber Security Law of China, I believe that it will become more and more difficult for private companies and organizations to collect PII (Personal Identifiable Information) from individuals. Therefore to use government data will be the future.
What’s more, if decentralization means to give up all the existing centralized databases that would be a disaster of the civilization of entire human being. These things, I am pretty sure, should not and will not happen.
Q13. Is the validator always necessary? Can the user not simply decide what information about themselves that they are happy to share?
Individual user is always an important element of THEKEY ecosystem. Without valid authorization, PII data of a given user in most cases cannot be used.
However I also need to point out that individuals cannot always decide what information they are able to share since some individual information is related to the social stability and some are even national confidential information. Government’s prior approval is needed. For example, law enforcement agencies like FBI or CIA etc., they can access PII data for anti-terrorism purpose anytime and I am sure no terrorist is happy to share his information with them.
Q14. According to THEKEY White Paper, the personal data are stored in a data warehouse. Is this not counter to a decentralized model?
Centralization and decentralization seems to be an issue of philosophy. We should not make judgment if the project is good or bad just because if they are “decentralized” or “centralized” for the following reasons:
1) We must be realistic. The most important thing is to achieve the business objective in a more cost-effective way, not the issue of decentralized or centralized.
2) If decentralization means to give up all centralized database that would be a disaster which the entire human being cannot afford. I am sure it will not happen.
3) Taking a closer look at HIPPA, GDPR and China Cyber Security law you can easily get a conclusion that for private companies and organizations it will become more and more difficult to collect PII and we must turn to the already-available government database. That is the reason why up to now we still haven’t found any blockchain project which is “very real” decentralized.
I believe in hybrid system of the decentralization and centralization, which is adopted in our technical solution. 1) Centralized data collection and processing based on the government. 2) Multi-scenario data application in a decentralized environment.
Q15. I recently saw the news that China RE composed a blockchain with two other reinsurers. What is THEKEY’s role in this news?
We are in partnership with China RE. However it’s not building the blockchain together with them, but to cooperate on IDV services in insurance underwriting and claim settlement. China RE actually acts as a service provider in the ecosystem.
Q16. You said you want to enter into the Korea market, but the hacking of the stock exchange happened. Is there a plan to continue working on the Korea market?
The hacking to Coinrail was an accident and we were sorry for their loss. And please also be assured that the TKY asset on Coinrail wasn’t affected by the hacking. According to Coinrail’s announcement on their website, they’ll reopen the platform on July 15th. We’ll not drop Korean market because of this accident.
About THEKEY
THEKEY is a decentralized ecosystem of an identity verification tool using national big-data and blockchain. THEKEY project team is now developing an identification verification (IDV) tool with blockchain based dynamic multi-dimension identification (BDMI) by using Personally Identifiable Information (PII) which is exclusively authorized by government authorities. THEKEY token (TKY), is the only method to settle smart contracts signed between the participants in THEKEY Ecosystem. Now TKY is tradable on the exchange platforms, such as HitBTC, Bit-Z , KuCoin , LBANK.
For more information, please visit:
Website: www.thekey.vip
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