ICON: Korea’s Ethereum

【Original Post Written by Mike Mu, Translated by Harrison Goldsmith】

Investors who have entered the cryptocurrency market since last year must have heard about the market situation in South Korea in the news, such as the speculation of Korean nationals, the relatively strict regulations of the Korean government, and the premium that Koreans have to pay for crypto compared with other exchanges (also known as kimchi premium). The most famous Korean cryptocurrency would be ICON. ICON is not only famous for being a Korean cryptocurrency, but it is also known for the great technology behind it and its piratical real world applications.

What is ICON?

ICON is known as the “Ethereum of Korea”. The token name is ICX. It is a decentralized blockchain network and formed by a variety of independent community networks. Most of the blockchain projects are decentralized. Therefore, there are many restrictions in real-world applications. The main problem is the scalibality of the transaction processing. For example, when the ERC20-based ICO platform Ethereum’s demand increases, there will be scalibility constraints because the whole network could easily overload.

The credit card information used to order a cup of coffee in daily life is stored in a total of seven FEP (Front-end Processor) intermediaries and stored in a database (DB). In this process, a variety of fees are incurred, because this is a centralized system that ensures trust through an intermediary or a third party service provider.

The ICON Network’s decentralized connection will break the various boundaries that exist in centralized systems. For example, the University of Korea’s Diabetes Specialist can simultaneously study data on diabetes patients in Sydney and London hospitals, Besides converting existing currencies into tokens, Icon’s network could also include tangible assets such as real estate, automobiles, patents, copyrights, etc. along side with intangible assets such as voting rights, citizenship and other legal rights. Even personal blood test results can be achieved on the ICON Network (tokenized).

ICON is a decentralized network formed by a variety of independent organizations connected by blockchain technology. The goal of ICON is to create a decentralized network of blockchain links from various independent institutions (banks, securities firms, insurance companies, hospitals, universities, e-commerce, etc.).

Icon Componants

Community (Community Network)

The Community is a network of different nodes under the same governance system. Financial institutions, governments, schools, e-commerce platforms, healthcare, Bitcoin, and Ethereum can all be considered a community network. Each community network has different node composition and size depending on its composition characteristics and conditions.

C- Node , Community Node (Community Network Node)

C-Node is the cornerstone of the community network, implementing consensus or decision-making in community governance. The Node C policy for individuals and organizations (banks, brokers, insurance companies, schools, governments, etc.) is determined by the members of each community network.

C-Rep, Community Represnetive (Community Network Representative)

C-Rep is a representative of the community network and a unit that forms the common governance of ICON Republic, with the right to vote on transaction verification and governance in the ICON Republic. The C-Rep is selected based on the decision of each community network, and the C-Rep may change at every node. In other words, C-Reps may vary according to different situations and the purpose of each governance unit. In addition to all that, C-Reps will be rewarded for maintaining and activating the ICON Republic.

Citizen Node
Citizen Node is an element of the ICON Republic. Anyone can participate in the DApps created on the Loopchain as a Citizen Node. However, Citizen Nodes have no voting rights for ICON Republic’s governance, and can only generate transactions. If certain conditions are met, the Citizen Node can also be a C-Rep with voting rights.

ICON Repubilc (ICON Republican System)

ICON Republic is a network of different community networks, consisting of C-Reps and other Citizen Nodes. The governance of ICON Republic is determined by C-Rep and is decentralized. The function of ICON Republic is the communication channel for different community networks.

ICON Republic connects on the basis of a loopchain, and communities are launched on this chain governance and consensus mechanism (LFT). The blockchain that makes up ICON Republic is called Nexus, and the C-Reps are made up of Portals. The connected Nexus chain can quickly handle token transfer and various transactions through Portal. The Portal connected to the Nexus blockchain performs transactions between a plurality of connected blockchains based on the BTP (Blockchain Transmission Protocol).

Nexus Structure

Type of connection on the ICON Network (community and ICON Republic connection)


A community network and ICON Public connects instantly through the Decentralized Exchange (DEX). DEX provides a community network and ICON Public exchange rate by setting the currency reserve rate, and exchanges value in real time based on the ratio.

When it comes to links to community networks, there is no real-time consensus (such as Bitcoin, Ethereum and cryptocurrencies built on Ethereum).
The consensus within ICON Republic will be suspended until the community network reaches a consensus.

Nexus
Nexus is a multi-channel blockchain consisting of Light Clients for each blockchain.
Each blockchain is connected to Nexus via Portal, and each Portal is basically A representative of an independent network that participates as a node in the Nexus blockchain network.

Since Nexus is based on Loopchain, its consensus is based on the LFT consensus algorithm. One of the functions of Loopchain is its unique grouping function.

Nexus includes a representative channel through which operational policies are proposed and voted on. Each Portal as a C-Rep will represent his community network and participate in the channel of the delegates.

ICX tokens are embedded in Nexus, where interconnected blockchains can convert value through ICX, because it is itself a blockchain, Nexus can be linked to another Nexus, allowing blockchains of different governance structures to Execute transactions and exchange value with each other.

Portal
As an element connecting the independent blockchain to Nexus, Portals is connected to Nexus through BTP (Blockchain Transmission Protocol). According to the policy of each blockchain, Portal can be composed of a single node or multiple nodes. The consensus network can thus meets different needs.

The Portal is interpreted as an analogy of the SWIFT8 international banking network, facilitating communication between financial institutions in different monetary systems. Similarly, the number of nodes in Nexus are managed by the grouping function of the loopchain. Portal represents its own blockchain, as C-Rep, and proposes policies and vots within the agent channel to achieve decentralized governance.

Real world use case
The “Financial Investment Industry Blockchain Alliance”, participated by 25 securities companies and financial investment associations in Korea, provides Chain ID (blockchain-based joint certification service) based on the Loopchain.That can certify people as the BSI (commercial standards company, provision and education training). Besides the certification, authorities can also be directly authenticated between users and financial institutions through electronic signature verification services. A total of 11 securities companies provided demonstrations of these services.

Through the “SCORE” smart contract (in the ICON) can verify the workflow process in the capital market such as Post-trading, Trading, and gradually expanding the possible use cases of blockchain technology. In the current world, most transactions are achieved through intermediaries, in order to clear transactions and payments there are several clearing processes, the liquidation process is often lengthened, making the back office more complicated. After the stock transactions ends and before the end of the liquidation work, it will cost $9 billion USD to process all the transactions because the processing flow is not immediate.

Insurance

After the insured member receives the medical report and the insurance notice after a treatment at the hospital. the insurance company will confirm with the clinic the member’s personal information including the patient’s identity etc. Using blockchain technology (smart contracts) will result intermediaries not needed to handle this transfer of data because smart contracts would be able to automatically handle the insurance claims, bringing innovation to the insurance claims and payment businesses. From the point of view of the insurance company, this can improve business efficiency and save costs; from the perspective of consumers, it can improve convenience. Compared with other financial industries, the insurance industry has relatively frequent transactions (data and funds) with third party institutions. Third Party organizations usually operate on a variety of systems that match the characteristics of each organization because Inter-operability is lacking between different systems. Trust and interoperability can be ensured through the ICON Network.

Health care

Most of the Korean hospitals participate in the precision medical information system program, and it will implement the international medical information network tech such as loopchain and ODHSI (Observational Health Data Sciences and Informatics). which are based on the blockchain, the Alliance has established a system with medical information, security, transparency and information sharing.Due to the fact that the recent development of modern medical information diagnosis technology, the scope of medical information is rapidly increasing. In the process of efficiently handling multiple information transactions, we must actively discuss ways to ensure safety and stability. The use of blockchain technology ensures interoperability between hospitals to manage data and access records.

Application of blockchain on medical systems

Comparison of ICON with other similar platforms:

The Problems we identify: As far as the consensus mechanism is concerned, C-Rep can give ICON Republic a chance to be threatened. C-Rep is very similar to Eos’s DPos (Delegated Proof of Stake) method with the role of witnessing the verification block. It is also similar to the role of the Validator of Casper in Ethereum. In DPoS, witnesses are selected via voting by individual nodes, and if there is any problem, they can be replaced at any time. Casper uses a collection of Validators that can be converted to certain conditions, but there is no such functionality in ICON.The election of C-Rep is determined by the standards within the community network and can be re-elected at any time. In addition, C-Reps have to follow ICON Republic’s important rules (eg, inflation ratio). C-Rep’s voting rights in the system have their own problems, whether they recognize the strong or protect the weak.Finally, the nature of the blockchain is decentralized, but if a particular community tends to focus on interests, then the platform will be eliminated.

Source:

ICON White Paper

https://icon.foundation/resources/whitepaper/ICON-Whitepaper-EN-