Image credits: Brian Li —

The Comprehensive ICON Report Part 1: ICON Facts & Commentary

Markus Jun
May 28, 2018 · 16 min read

This is part 1, for part 2 click here.

By Markus (ICON Hyperconnect P-Rep):

This report has formerly been translated into 8 different languages by the Hx57 Community. However, with the mass update, ICON Hyperconnect P-Rep will be funding the translation of this report.

This report is a comprehensive overview of ICON for both beginners and enthusiasts.

I write this report to clarify many aspects of ICON, especially its relationship between ICONLOOP & ICON, and explain why I believe it’s on course to become one of the most important blockchain projects of our time. I unpack ICON in its simplest terms.

ICON Report: Table of Contents

Part 1.

  1. Essential ICON Facts.
    — Core Components: Relationship between ICON & ICONLOOP
    — Korean Dominance & Core Initiatives
    — Government Funding and Initiatives
    — Institutional Investors & Global Expansion
    — Major Corporations and Real-life Applications: LINE, Samsung, Deloitte, etc.
  2. Commentary
    — Will Loopchain Connect to ICON?
    — How Loopchain will Connect to ICON: A Chain ID case study
    — Interoperability Beyond ICON
    —ICON’s Real World Focus & Network Effect

Part 2.

  1. ICON ICX Token Utility
    — ICX Fees
    — IISS ICON Incentive Scoring System
    — ICON Decentralized Exchange
    — ICO Fundraising ICONest
  2. ICON ICX Token Valuation
    — ICON High performance Interoperability protocol
    — ICON’s Professionalism and Enterprise Blockchain Expertise
    — ICON’s Korean Dominance & Global Initiative
    — Early Stage of the Project
    — ICON Dapps
    — ICO Fundraising
    — IISS ICX Incentives (Passive Income & Partial Governance)
    — ICON Dex (Improved Scalability)
  3. Final Thoughts

Essential ICON Facts.

Core Components: Relationship between ICON & theloop & Deblock

  • ICON is a high performance 3rd generation blockchain protocol that supports interoperability. It is one of the largest blockchain networks in the world and connects reputable institutions in major industries.
  • Backed by the largest fintech group in South Korea, Dayli Financial Group, also one of the largest in Asia.
  • Dayli Financial Group owns the following key companies in the Korean blockchain/fintech space:
    ICONLOOP, the largest blockchain company in South Korea responsible for developing both loopchain, the private enterprise version, and ICON, the public blockchain.
    Coinone, 4th largest cryptocurrency exchange in South Korea.
    DaVinci, the largest AI provider in South Korea with a clientele that includes AXA global, the largest insurance company in the world, and Samsung Card. DaVinci helped develop ICON’s AI technology for IISS (ICON Incentives Scoring System).
  • Loopchain is the core blockchain engine that powers both the private ICONLOOP networks and the public ICON network and will ultimately be connected through the ICON Nexus which will require the use of ICON ICX (this fact will be explored in the Commentary section). Thus, the ICON team and the team of ICONLOOP can be considered one and the same.

In fact, here is a statement from JH Kim, CEO of ICONLOOP regarding the rebranding of theloop to ICONLOOP in 2018.

“This rebranding of theloop to ICONLOOP change demonstrates a strong and long-term commitment to the ICON project… the new brand is expected to unify and improve ICON’s brand positioning in Korea and the global market. The rebranding makes a lot of sense as we are now finally ready to push the ICON project here in Korea… Our team is fully committed to contributing to the ICON project and servicing the ICON Foundation.’”

A diagram showing how networks will be connected via the ICON Nexus.
  • Every business partnership/MOU with ICONLOOP can therefore be considered a potential addition to ICON’s network.
  • ICON currently has more than 100 full time employees working on the project, making it one of the largest teams (if not the largest) in the blockchain space. Of this team more than 80% are developers. This makes them the largest blockchain developer base in Korea, and ICON are known to be quite selective in hiring top developers. They are still actively hiring.
  • ICON’s enterprise blockchain implementation, loopchain is one of the oldest and largest operating blockchain networks in the world. It has been used for over 2 years by some of the largest and most reputable companies of major industries in Korea including the 50+ MyID Alliance members which include all of the largest banks in Korea and top financial securities firms such as Samsung Securities.
  • ICON Council Member, Min Kim, has over a decade of experience with startups in Silicon Valley, including taking companies public. Min Kim also helped found Dayli Financial Group and is currently its CSO (Chief Strategic Officer).

Korean Dominance & Core Initiatives

ICON currently dominates major industries in South Korea. The following include core implementations of ICON’s private blockchain, loopchain, used in the following industries:

  • Banking: partnerships with 2 of the largest banks in Korea, Woori Bank and Nonghyup Bank, to develop and research ICON tech for banking use cases. Projects include WeeBee coin of Woori bank, Korea’s first blockchain based digital currency with a 1:1 equivalent value to the Korean Won.
  • Healthcare: Precision Medical Hospital Industry, the largest Healthcare blockchain Consortium in Korea consisting of major domestic hospitals in Korea for which loopchain will be the blockchain technology provider.
    This includes a project run with government cooperation by Korea University Hospital utilizing loopchain to provide improved data integrity, a cross-border digital signing system, and a health coin.
  • Insurance: The Insurance Consortium backed by the Government’s Ministry of Science, ICT and Future Planning. The consortium is led by Kyobo Life Insurance, D. Lemon, and hospital medical records service company One.
    — The blockchain tech will be provided by theloop, and SK Telecom, the largest telecommunications company in Korea with over 50% market share, is likely to interoperate with the systems of this consortium via the LoRaWAN IoT network.
    — It should also be noted that the insurance claims system is already being used by 3 hospitals for small insurance claims under 279 USD, and the system has proven its efficiency with real-time payment claims taking less than 10 minutes.
    — Anyone who’s ever faced the frustration of submitting /faxing documents for insurance claims will understand the significance of this fact.
  • Capital Markets (Finance): Chain ID, powered by loopchain, used by the capital markets consortium, consisting of 27 securities firms helmed by KOFIA. Samsung Electronics has pledged to incorporate Chain ID technology to Samsung Pass.
Credits: Speculative Rationality

— Chain ID is significant, as there are currently regulatory efforts to replace the Certified Certification system currently in use by every Korean citizen for ID authentication for web services, banking, and government services.
— A far more efficient, blockchain based, decentralized ID authentication system like Chain ID that is already being used by top financial securities firms is likely to be a strong competitor.

  • Customs Service: The Ministry of Information and Communication and the Korea Internet Development Agency (KISA) announced that 53% of all Korean e-commerce imports are to be processed on the loopchain network as a running pilot. At the end of 2018, loopchain is set to process all of Korean e-commerce exports and imports.
  • Gaming: A business agreement between ICON/theloop and Smilegate, a leading gaming company in Korea that’s behind the world’s top online FPS game, CrossFire. The agreement will create a social gaming ecosystem built on the ICON network.
  • Education: U-coin, backed by the Ministry of Creation and Science, is a cryptocurrency for university students in top universities in Korea including Korea University, Postech University, and Sogang University. Furthermore, Theloop is discussing the process of building a blockchain campus in more than 20 universities including Postech and Yonsei University.
  • Contract platform: Chain Sign, developed by both theloop and Cyberdigm, is a blockchain based contract platform in which legally binding contracts can be signed digitally. It is powered by the loopchain engine and has proven its cost efficiency and tamper-proof safety to a clientele that includes the government’s regulatory authority, Financial Supervisory Service (FSS), and Samsung Electronics.
    — A recent signing of the MOU of the Seoul Fintech Lab, hosted by the city of Seoul, included both the mayor of Seoul and the Government Financial Supervisory Service director.

Government Funding and Initiatives

  • ICON has received government funding in South Korea twice. Both in its education implementation, U-coin, by the Ministry of Creation and Science in April 2017, and its Insurance project by the Ministry of Science, ICT and Future Planning also in April 2017.
  • On May 10th the Ministry of Information and Communication and the Korea Internet Development Agency (KISA) announced that loopchain would be implemented to process the shipping process of approximately 56% of South Korean e-commerce import goods till the end of the year. After that loopchain technology will be implemented to all e-commerce import goods and export goods.
  • The Government’s Financial Supervisory Service is a clientele of Chain Sign, a blockchain based contract system powered by loopchain. The Mayor of Seoul was also one of the 33 members who signed the MOU for Seoul Fintech Lab with Chain Sign.

Institutional Investors & Global Expansion

  • ICON is actively hiring and expanding globally despite already having one of the largest teams.
  • One of the founding members of the Blockchain Interoperability Alliance and arguably its leader in terms of technical development (mainnet maturity, wallet, ICO platform), business traction (largest and oldest network via their private blockchain, loopchain), and market capitalization.
  • Backed by Pantera Capital, the largest crypto hedge fund in the world with over a billion dollars in their crypto fund. Within this fund, ICON was confirmed to be ‘their single largest bet,’ by the founder and CEO, Dan Morehead.
  • Pantera Capital Partner, Paul Veradittakit has stated that he hopes to help ICON expand globally beyond South Korea.
  • Backed by #Hashed, the largest crypto hedge fund and accelerator in South Korea with over a quarter billion dollars in their crypto fund. ICON ICX is a significant part of their portfolio.
Japan’s Credit Card Industry Consortium
  • ICON CEO, JH Kim, was invited to present on ICON technology at the 1st workshop of Japan’s Credit Card Industry Consortium in which representatives of the largest companies of Japan’s finance industry, including JCB, Sumitomo Mitsui Card, and Credit Saison attended. The consortium secretariat is jointly operated by SBI Ripple Asia and JCB and actively reviewing alliances with companies not only in Japan but also overseas to incorporate blockchain technology in finance.
B Dash Ventures, one of Japan’s largest VC firms
  • ICON entered a strategic partnership with B Cryptos, backed by B Dash Ventures, one of Japan’s largest venture capital firms and Quoine, Japan’s leading crypto exchange.
    ICON and B Cryptos will co-host hackathons, project demo days, and conferences, as well as operate incubation programs to support blockchain projects.
    — This partnership implies expansion, acceleration and funding of ICON projects in Japan. JH Kim, CEO of theloop, will also become a member of the Investment Committee of BCryptos.

Major Corporations and Real-life Applications: LINE, Samsung, Deloitte.

LINE and ICON Joint Venture

  • Line and ICON announced a joint venture, Unchain, which aims to ‘deploy various decentralized applications (dApps) and its blockchain mainnet on the ICON blockchain protocol.’ Emphasis should be had on the fact this is a joint venture in which an ICON foundation council member will become the CEO of this joint venture, Unchain.
  • Line is an Asian internet giant with over 200 million active users, and the most popular internet messenger social networking app in Japan. This is significant considering that the entire population of Korea is only 50 million.
  • The ICON team has stated that this could lead to ‘hundreds of millions of users of LINE potentially utilizing the ICON blockchain on a daily basis to access dApps.’
  • The fact that Line is owned by Naver, an internet giant of South Korea, cannot be ignored. Naver handles 74.7% of all web searches in South Korea and has 42 million enrolled users (Korea has a population of 50 million).
  • It should also be noted that Naver is much more than simply a search engine but the most popular news, entertainment, blogging and internet community platform in Korea. There are few international comparisons. Stating that Naver is just the Google of Korea would be an understatement.

Samsung Electronics & ICON Business Partnership

  • An MOU was signed between theloop and Samsung Electronics in which Samsung pledged to use Chain ID for Samsung Pass.
  • Samsung Pass is the default biometrics identification authentication system found on every Samsung phone. It is used by Samsung phone users several times a day for online payments, logins, signatures and even phone unlocks.
  • This would mean that in the future, Chain ID, theloop’s ID authentication service, would serve every Samsung Galaxy phone.
Left: Deloitte Startup Advisory Group, Director YS Kim, Right: ICON Foundation Council JH Kim

ICON and Deloitte Business Partnership

  • ‘Collaboration between Deloitte Blockchain Lab, which has developed and commercialized more than 30 blockchain projects, and ICON’s technology is expected to strengthen both companies’ competitiveness in the blockchain industry.’
  • ‘Through this agreement, the Deloitte Startup Advisory Group will provide professional services for the commercialization of blockchain based projects through accounting/financial consulting, tax advisory, risk consulting, investment sourcing and overseas advancement support.’


Will Loopchain connect to ICON?

It’s pretty clear that ICON is the absolutely dominant blockchain platform of Korea with deep ties to the government, and business deals with the largest corporations and consortiums in major industries. It also looks ready to begin expansion on the global stage (e.g., United States, Japan).

However, you may have noticed that many of the initiatives and facts above seem to relate to Loopchain, ICON’s private, enterprise version. And you wouldn’t be wrong.

While I have clearly stated above that the ICON team can be considered one and the same as the team of theloop, and that loopchain will eventually connect to its public chain ICON through the use of the ICON Nexus via ICON ICX tokens, let me clarify why all these private blockchains would want to interoperate (i.e., connect to the ICON network) in the first place.

Here’s Min Kim, speaking at the interoperability panel at AIONEX in May:

Chain ID (is a project) in which 25 securities firms decided to share and create a blockchain just for these firms. However, we also have blockchains in the healthcare side, university side, and we’re in the process of linking these blockchains together. There are other consortiums that are very interested in using the ID data that are stored in the 25 securities firms blockchain. This is not something that… we thought of, it is a natural progression to where things are going. As a company we are pretty much delivering on what the market is demanding at this point.’

This is Min stating that the demand of these private loopchain blockchains to interoperate with each other was a ‘natural progression’ that arose within the company themselves.

In other words, the companies utilizing loopchain are the ones who requested interoperability. The public network ICON, which will connect all loopchain networks and more, was created out of demand and necessity as companies understood the value in sharing data in a public network.

So yes, it’s safe to assume that loopchain networks will utilize the ICON public chain, and along with it, the ICON Nexus and ICX tokens.

How Loopchain will Connect to ICON: A Chain ID Case Study

Let’s look into a case study of how these loopchain networks may interoperate. The ID authentication project, Chain ID, is one of ICON’s most important and advanced projects, as evidenced by its adoption by top financial securities firms (capital markets consortium), a sector in which KYC and AML laws are arguably the most stringent.

When Chain ID connects to the public ICON Network via the ICON Nexus through the use of ICX tokens, and interoperability is enabled, Chain ID immediately expands its use case and scope to almost every imaginable interaction. Our personal identity is at the core of every interaction we make, whether we’re visiting a hospital, making an insurance claim, checking into work, or shopping online. This means that to enable a seamless experience in which these interactions are linked to our identity, the Chain ID loopchain network needs to be connected to the loopchain networks of all the relevant industries and that’s what ICON enables.

Here’s how this plays out in real life. Imagine that a student requires surgery. She may check into a hospital, verify her identity on Chain ID and give permission so that the hospital can share her medical records directly with her insurance company. This will trigger a smart contract that will immediately transfer her health records and her surgeon’s medical certificate (signed digitally on ICON’s Chain Sign) to the insurance company. The insurance company can then immediately process the insurance claim as both the health records and the medical certificate are tamper-proof on the blockchain and do not require additional verification or the sending of official paper documents, steps which typically slow down the process of traditional insurance claims and make them more costly.

After her surgery, the student who needs to get hospitalized for a few days may then give permission to the hospital to share her records with her university so that she can get formally excused from attending classes. The information would again be shared immediately via a smart contract without the need of a third party ‘messenger’, without the need for paper (e.g., a doctor’s note), and with full assurance for both parties that the information is legitimate.

Thus, the use of Chain ID, Chain Sign, powered by smart contracts executing on the ICON network, enables information sharing within industries to become safer, faster, tamper-proof, and cheaper. This means that ICON isn’t just enabling connectivity between loopchain networks, but a more efficient connectivity.

It should be noted that this scenario is theoretically possible on any smart contract blockchain protocol. However, the reason why it’s a uniquely plausible scenario for ICON currently is because ICON is one of the only platforms that have already secured and built the networks in the necessary industries (e.g., healthcare, banking, insurance). Building a blockchain can be as easy as copying and pasting code, the true challenge is building a network.

Interoperability Beyond ICON

For the most part, we’ve been focusing on interoperability within ICON’s network. But what makes ICON special is that their interoperability protocol enables connections with protocols that are not of its own. This is to say that ICON will be able to connect with other blockchain protocols like Bitcoin, Ethereum, or NEO and so on.

As the blockchain landscape matures with almost an over-saturation of blockchain protocols, it’s becoming abundantly clear that there will be no one-blockchain-to-rule-them-all. And insofar as you accept that multiple protocols will always exist, you must accept that interoperability will be a critical factor in blockchain adoption.

Just like the intranets of the past were collectively connected and expanded on by the internet, we can expect stand-alone protocols like Bitcoin, Ethereum, and NEO to be collectively connected and expanded on by interoperability protocols like ICON.

‘Networks of Networks’

Thus, when we consider the fact that ICON’s interoperability features expand beyond its own blockchain protocol to communicating with those that were built to be stand-alone protocols, we can understand how immensely expansive and encompassing the ICON network has the potential to be beyond the interoperability of loopchain networks that have been described so far.

ICON’s Real World Focus

ICON currently has contractual agreements with the largest corporations of major industries for real world use cases of blockchain. This can’t be stressed enough. The only way we’ll see blockchain become useful beyond the world of crypto enthusiasts (e.g., crypto-kitties, and master nodes) and bridge the gap of mainstream adoption is through its use in the real world, and more specifically, real world adoption by corporations, and ICON seems to be leading this initiative.

Once corporations adopt the technology, consumer adoption will follow. This is especially true for a country like Korea, the most wired country in the world, in which a handful of large corporations dominate the technology/software landscape (e.g., Naver handling 74.7% of all web searches, Kakao messenger used by 93% of all smartphone users etc.) In a landscape like this, choices are limited, and using what everyone else does is not just more convenient, but almost essential.

However, we’re still far from mainstream adoption. The fact that the majority of us are having discussions about different consensus algorithms, and transactions per second is proof that these are still early days. When the majority of crypto-users stop having these discussions except for a select few, we’ll know we’ve hit peak mainstream adoption.

That’s not to say that technical discussions don’t matter. It’s true that in its current state, even major platforms like Ethereum require more scalability, but minor differences in tech should not be the core focus or selling point of a project especially since a) blockchain technology still hasn’t been adopted on a meaningful global scale, b) most of blockchain technology is open source. And within any open source environment, companies and projects learn from each other as codes are published freely online. The technology will ultimately follow. The more difficult and important task is educating companies, lowering barriers to entry and building an expansive network that corporations and people will find beneficial to join. That is ultimately what will bring real mainstream adoption. Here is Minho Kim, Council Member of ICON, making this point in an interview back in September:

‘Do you care today if mobile companies use GSM or CDMA? (If you don’t know what these are, you prove his point.) We don’t care. Do you care about the technology behind the Mastercard network? You never ask those kinds of questions… why ask them about the blockchain? Everyone uses WhatsApp and WeChat… The matter of fact is that you mainly use those apps because your friends are on it. That’s the power of the network. The value of blockchain is in the network itself. The network increases with the number of participants. The more participants you have… the more friends are on WeChat, the bigger the value it is for you.”

At the end, Kim refers to adoption occurring with ‘the more participants you have.’ And this is precisely the approach that ICON is taking: enticing corporations to join ICON’s network. Because every time you see an announcement of an MOU between theloop and Company X, you are seeing a new addition to the ICON network. And every addition makes the network more valuable. The sum total of the network value will always be more valuable than any single company within. Even if Company X is Samsung.

If you agree with Kim that ‘the value of blockchain is in the network itself,’ you may see why ICON has gone beyond any other project in realizing this vision.

for part 2 click here.

Part 2 will focus on the following:

Part 2.

  1. ICON ICX Token Utility
    — ICX Fees
    — IISS ICON Incentive Scoring System
    — ICON Decentralized Exchange
    — ICO Fundraising ICONest
  2. ICON ICX Token Valuation
    — ICON High performance Interoperability protocol
    — ICON’s Professionalism and Enterprise Blockchain Expertise
    — ICON’s Korean Dominance & Global Initiative
    — Early Stage of the Project
    — ICON Dapps
    — Deblock: Building the ICON Ecosystem
    — ICO Fundraising
    — IISS ICX Incentives (Passive Income & Partial Governance)
    — ICON Dex (Improved Scalability)
  3. Final Thoughts

By Markus (Deblock):

Disclaimer: Blockhack does not provide investment advice. I am not a financial advisor.

Markus Jun