Interview with Jaesun Han — CEO of Kakao’s Ground X, by dstreet.io
Good news! We are glad to share with you yet another interesting interview with Jaesun Han, CEO of Kakao’s blockchain arm Ground X — the company developing Klaytn. We hope our Klaytn community finds the interview as interesting and enlightening as we did! The interview is quite lengthy but it’s definitely worth the read as it highlights many of Klaytn’s key strategies of achieving its mission of mass adoption. Enjoy!
This interview was originally published by D.STREET and dstreet.io in Korean on May 8th by reporter Reporter Kim Do-yoon. KlaytnCommunity provided an English version for the global Klaytn community and we added some interesting notes here and there. For those wondering, the big fluffy animals sitting alongside Jaesun are part of the famous Kakao Friends.
Jaesun Han shares his view with confidence; “In the future, the concept of assets will be redefined. Game items, one’s personal profile, digital content, activity data, and much more will be issued as digital assets. It is a world in which individuals exercise their right to information and create wealth through digital activities.” He defines this era as the ‘Next Internet’.
According to him, the 2030 generation will greatly benefit from the ‘Next Internet’ era. The reason being that the 2030 generation is familiar with the digital environment, which in turn is advantageous for the creation and adoption of digital assets. Furthermore, digital assets can help to solve wealth inequality between generations, and thus blockchain technology can be used to alleviate social problems.
Jason is a serial entrepreneur and blockchain enthusiast. He received a Ph.D in EECS at KAIST in 2005. His research topics were P2P algorithms like DHT and distributed systems. In 2007, he founded NexR, the first big data and cloud computing tech startup in Korea, which was acquired by KT (Korea Telecom) 4 years later. After that, he co-founded FuturePlay and took the role of CTO. FuturePlay is a tech-centric accelerator and investor, focusing on tech startups in APAC. He invested in dozens of startups and gave them technical mentoring. He also taught an innovative business model and IT trends course in KAIST MBA as an adjunct professor for 7 years starting in 2007. Since 2018, he has been leading Ground X, South-Korean Kakao’s blockchain arm.
My first meeting with Jaesun Han was back in April 2018 at the ‘Daily Money Icon’ demo day event hosted by ICON and Adforce. At the time, Jaesun was being consulted by several local blockchain industry representatives. I noticed him launching sharp questions to each of the project representatives while also sharing his view and giving sincere advice. After the event, some time was spent at the bar to network and talk about the future of blockchain technology. I had the pleasure of talking to him and was able to pick his mind and ask him about ‘Kakao’s blockchain business’.
“2020 will be the first year of blockchain mass adoption, as we plan to launch ‘Klip’ integrated with Kakaotalk” — CEO Jaesun Han
And now, after two years, CEO Jaesun Han has made his business idea into reality. The blockchain platform Klaytn was officially launched on June 27th 2019 and has secured more than 70 service partners so far, laying the foundation for the Klaytn ecosystem. In June of this year, Klaytn plans to release a digital wallet ‘Klip’ that works with KakaoTalk. “2020 will be the first year of blockchain mass adoption”, he said.
Today I had the pleasure of getting together again with Jaesun Han for a candid conversation about Klaytn. During the talk, Jaesun shared his vision on important topics such as the ‘Next Internet’ era and the Klaytn ecosystem. In addition, he went in-depth about his views on what Klip will mean for Klaytn and how it could spur mass-adoption.
What specifically sparked your interest in blockchain technology?
“I received a Ph.D. in EECS, my research topics were P2P algorithms. Since then, I have been interested in distributed systems. Later on, I came across blockchain technology and soon fell in love with it as blockchain is a person-oriented technology. On the other hand, technologies such as artificial intelligence (AI), big data, and the cloud are focused on automation. Blockchain technology attracts people’s participation and could, therefore, play a big role in solving a wide range of social hurdles the world is facing. ”
What kind of problems, do you think, can be solved through blockchain technology?
“It’s an inefficient and burdensome process for individuals to create and manage assets today. Blockchain technology provides new opportunities in the process of building and managing digital assets. The game industry is already well known to be working on digital assetization. Take Lineage, for example, gamers love trading items. I’m confident that this process can be strengthened and enhanced through blockchain technology. In particular, I wonder how the 2030 generation will benefit. This is because today’s youngsters have way more flexible access to new services than my generation (laughs). They will be able to accumulate new forms of wealth.”
“The more I think about it, the more I realize that the problem blockchain can solve is ‘trust’. There aren’t too many ways to guarantee trust in contracts on the internet or on mobile now. So naturally, we’re facing a lot of problems on that front. Blockchain makes it easy to solve these hurdles. When today’s trust infrastructure begins to adopt blockchain technology, we expect that new forms of trust-based internet services and mobile services will emerge. I think digital identity authentication is at the center of this process. ”
Ground X envisioned building the ‘Next Internet’. What is ‘Next Internet’?
“Ground X’ vision on the Next Internet means we aim to build a new internet through blockchain technology. Though I want to stress that it is not a replacement for the Internet — it is a concept of adding layers (layers). The idea is to put a trust layer on the Internet to improve anonymity concerns and add a value transfer layer to create a new form of the Internet that enables digital asset management.
Compatibility and usability are key to this movement. It must be easy and free to build trust-based services. If you look at the DeFi (Decentralized Finance) field these days, the main two implementations are stablecoins and loans. Each use case is implemented in the form of a smart contract, and since the underlying tech is open source, you can easily use the existing contracts. Once the above-mentioned layers are in place, startups can efficiently and swiftly produce services. Just take what already exists and combine it to suit your needs. A few developers will be able to develop services in a month or two give or take.”
These days, it seems difficult to acquire users, even if you have created a service. In particular, the blockchain sector is often regarded as particularly challenging to gather users and achieve adoption.
“Right — When the first iPhone came out and the first App Store was created, it was highly likely for an individual to create an app and succeed. You see, there are conditions for being a successful freelance developer. Now it takes a lot of capital to develop successful apps as there’s lots of competition in the field. And even if you create a new service, it is difficult to attract users. It is also difficult to understand the needs of those users, as they are new. This is because a computer system cannot make any recommendations as it has not yet gathered enough information about their preferences. This is called the ‘cold start’ problem. I wonder if there is a blockchain-based layer that could solve the cold start problem. ”
Could the cold-start problem be solved with a blockchain-based layer?
“If the user’s data is stored in a blockchain-based layer, then it’s not stored in data silos owned by service providers like Google or Facebook. Users have the right to use their data. With the user’s consent, new service providers can use various data such as personal information, usage patterns, finances, and health statistics.
Let’s say you created a dating application. Need to attract new users? Developers usually end up spending money on Instagram or Facebook to advertise so people will install their app. However, it is very troublesome for users to sign up for a new app. You have to authenticate with your mobile phone, register your personal information, etc. It’s typically a complicated process. By consequence, a lot of people leave mid-registration. Now, if the identity authentication would be executed with data stored in the blockchain-based layer, this process can be omitted.
Over at Ethereum, developers have developed, to some extent, a workaround through a wallet service called ‘Metamask’. If you install the Metamask extension in your Chrome browser and log in, you can use any compatible new service with just one click. At present, Metamask does not require any personal information. There is no identity verification process. The wallet only has an Ethereum address that starts with 0x, and when the user clicks it, Metamask takes care of the rest. Metamask does not embrace the concept of storing personal user data or preferences. Therein it is different from the model we are pursuing, but it is a good example in terms of swift registration.”
Is Ground X’ authentication process similar to Facebook’s ‘Social Login’ function?
“Yes. Add DID (Decentralized Identifier) to a ‘social login’ process for it to become a ‘DID login’. Social logins are provided by service providers such as Google and Facebook, but the DID login is different in that the user has the information and manages it directly. DID login allows users to easily process various credentials and preferences. Service providers can respond quickly by collecting user preferences as data for their services. At this point, the user can be rewarded instead of agreeing to the use of the data by the Service Provider.”
If the ‘Next Internet’ becomes reality, what will change from a user’s perspective?
“When the ‘Next Internet’ era arrives, you will have fewer headaches (laughs). I can think of a few examples as many industries are prone to be disrupted by blockchain technology. Let’s say you want to hire an accountant but you want to be sure you receive the best service at a certain price. At this point, healthy competition between accountants can be created. With a trust-based decentralized infrastructure, you can prove that an applicant is an accountant without revealing his or her privacy.
The same applies for notary services. If both me and you have proof of identity, then we can sign autonomously. The only thing we need is a channel to communicate with each other. By signing a contract and registering it to the blockchain, we can establish authenticity and transparency. With a trust-based infrastructure, this can be done very easily.”
Let’s talk a bit about Klaytn. I hear the blockchain is opening up the platform to the outside. As the development environment for Klaytn and Ethereum is similar, Ethereum developers don’t experience any high entry barriers. What skills do general app developers need to join the Klaytn ecosystem?
“Blockchain typically has high technical barriers due to its niche characteristics and the branch being in its infancy adoption-wise. We are actively working on lowering these hurdles. We have recently constructed an application programming interface (API) and software development kit (SDK) for general developers to develop easily. We are still working on improving the tech and making it more accessible. We also plan to support multiple development tools in the future. Since it is open source, it will be smooth for other developers to participate in the ecosystem.
Developers will be quite pleased with Klaytn’s tools if they worry about how to integrate blockchain technology into their own services, whether they want to introduce blockchain technology for security purposes or for tokenizing loyalty points. Understanding and implementing blockchain technology can increase productivity and provide you new options. It is our job to make it easy for developers.
Of course, it would be better if you could write your own smart contract code. There are not many C or assembly developers these days (C and Assembly are low-level programming languages). That’s why your ability to code in C or assembly makes you part of a scarce group. Likewise, if you can write and understand smart contracts, you will be able to do more in the blockchain ecosystem. ”
Do you plan to introduce PoC and KIR programs to attract new partners and incentivize existing partners within the Klaytn ecosystem? If so, how will they operate?
“Correct! We’ve recently published a dedicated post about these programs.
PoC, meaning Proof of Contribution, is designed to encourage and incentivize all participants within the Klaytn ecosystem to spontaneously engage in economic activities by creating and exchanging values with one another. Such activities collectively build up an economy of circulating wealth that helps improve the stability of the Klaytn platform and also drives the economic growth of the entire ecosystem.
KIR (Klaytn Improvement Reserve) is a program that supports platform, tool and community development initiatives. For example, when a developer thinks “Hey, there is something missing in the Klaytn ecosystem, let me create it.” — then we can reward him or her accordingly. Both programs underpin the infrastructure for the development of the Klaytn ecosystem. Therefore we aim to make it a structure that developers can take advantage of. Both PoC and KIR are preparing to start in the second half of 2020.”
What role does Kakao play in Klaytn’s ecosystem?
“First, several Kakao affiliates are participating in Klaytn’s Governance Council. The core responsibilities of Governance Council members are contributing to the governance and ecosystem growth, alongside participating in the operation of the consensus nodes. In addition to Ground X, Kakao, Kakaogames, Kakaopage, Kakaopay, and KakaoIX are operating consensus nodes. I am trying to make a practical use case by applying blockchain technology to the Kakaotalk messenger service via Klip. Making real use cases popular and achieving mass-adoption (delivering a killer application for blockchain) is the golden grail of the blockchain ecosystem right now, therefore we are obviously focussing hard on this.”
Kakao is known for delivering real use cases quickly.
“Kakao is trying to apply blockchain technology. However, it is burdensome for large companies to take a blockchain service to their main clientele and product line. Start-ups may be more agile in this regard because you can take more risk at the early stages. Big companies need to take a more serious approach. As of now, there are no large companies in the world that are running their business on a blockchain with confidence. Kakao belongs to the category of companies that need to carefully consider before integrating new technologies into its existing business.
Nonetheless, Kakao continues to challenge. Kakao Connect, Kakao employee ID card, Kakao Pay certification, etc. If you stack up use cases like this, there will be many examples of using blockchain tech without knowing it. You could say that Kakao is leaning towards gradually adopting of blockchain technology.
Soon, KakaoTalk will be equipped with a ‘digital asset wallet’ called Klip. We will create a service that allows KakaoTalk users to interact seamlessly with Klip. Our digital asset wallet will also include partner services, so I’m confident this will prove to be a prime example of a real use case. ”
The integration of Klip with KakaoTalk could definitely serve as a key-catalyst for user onboarding and adoption. However, having users click one additional button is not often considered to be an easy challenge.
“Sure, Klip being part of Kakao’s services is definitely a stepping stone, though it’s never easy to attract loyal and active users. There are several services in KakaoTalk, but users aren’t all of them. We are considering different avenues such as how many of them know about digital assets and how they perceive cryptocurrencies.
It’s important to note that Klip was made specifically with the vision of user-friendliness in mind. Unlike a normal wallet, the private key is not visible — which means you won’t even have to manage it. Even if you just enter your friend’s phone number, you’ll be able to send him digital assets. We made it so that even ordinary users, who are not familiar with blockchain, can easily use it.”
If you want Klip to be popular, then the user’s perception must also change. What’s your strategy to make people, that aren’t familiar with cryptocurrency, use Klip?
“I think it is very difficult to bring cryptocurrency to the general public. You will be able to store cryptocurrencies in Klip, but first, we want to focus on having our users recognize the concept of digital assets and the management thereof.
Klaytn employs so-called non-fungible tokens (NFTs). An NFT could represent a game item, a ticket, or a discount coupon for a restaurant. Maybe it’s a proof that you’ve done something. We are looking to create a structure for partners to easily issue and distribute these digital assets in the form of tokens.
Even then, it’s still a hard question as to why any end-user should use Klip. It is clear why cryptocurrency investors use wallets, for asset management. But it’s another matter to entice new users to go and try out Klip. I keep thinking of strategies.”
What do you think is the most important thing to make Klaytn a success?
“Because we play the platform role, I think it’s most important for our partners to thrive within the ecosystem. What we need to do, is help Klaytn-based services succeed. Creating a Klayn-based killer dApp is key to mass-adoption.
If one or more services, that can greatly benefit from applying blockchain technology, should launch and succeed — then this will spring many other projects into existence, make them follow success models, and eventually create a blockchain boom.”
Jae-sun Han, who briefly looked up and had started pondering, cited the example of Kakao’s ‘Anipang’.
“In the early days of Kakao, there was a killer app called ‘Anipang’. Anipang used Kakao Talk’s social graph (user information) to exchange hearts with one’s friends, and to share rankings among them. Later ‘Dragon Flight’ and ‘Windrunner’ also became successful via social graphs. So the social gaming sector came into place. I believe the blockchain market should create a success equation of its own, similar to the Kakao game model.”
Is there any area, in particular, that is promising in the long run?
“The volume of stablecoins and DeFi is getting quite loud in the United States. We have also considered giving it a closer look. However, since Ground X is a platform-oriented business, we are focused on our partners building services on Klaytn rather than doing it ourselves.
Note: This morning Klaytn announced to have joined the CeloOrg Alliance for Prosperity, a mission-aligned network of organizations fostering social impact and financial inclusion through the use of blockchain technology.
DID is also important. I think it is the use case with the greatest short term potential, but it is difficult to execute well. I think it will take some time for DID to be completely battle-tested and work properly. As you might know, we are also in the DID business, but we don’t want to focus too broadly. Instead, I think it’s important to build up our skill, specialize and make examples rather than rushing whatever new direction blockchain technology is heading into.”
What do you want to be remembered for?
“I think blockchain technology can have a great impact on many aspects of society. My goal is to make my ideas reality. And if I’m going to do something, I want it to have a strong and lasting impact — that’s why I joined Kakao. The blockchain industry is going through a rough patch right now, but if you overcome it well, it can create a new playground for the Internet like Amazon. Internet shopping, which I had never imagined before, is now a routine for most of the younger generation. I’m confident Klaytn will play an important social role in the future. Also, I want Klaytn to become a blockchain that is widely used — not just in Korea but also in Asia and globally. I want to be remembered as a leader who has built this foundation.”
About Ground X
Ground X is the blockchain subsidiary of Korea’s largest mobile platform, Kakao, with over 50 million monthly users. By developing a scalable blockchain platform with tangible and practical blockchain services, Ground X aspires to achieve mass adoption of blockchain-empowered services as to substantiate the value and utility of blockchain technology.
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