Future designed by Ground X
Ground X CEO Jason Han's ultimate goal
Kakao’s co-CEOs, Su-young Joh and Min-soo Yeo, announced in a press conference on March 27 that Kakao is planning to establish a unit focusing on blockchain technology. It will establish a blockchain subsidiary named Ground X and devote its strength to creating a blockchain platform ecosystem in which numerous Asian partners participate.
Jason Han currently heads up the blockchain business in Ground X. He is a well-known expert in distributed systems and big data in Korea. After receiving a Ph.D. degree in P2P from KAIST, he founded a cloud and big data company, NexR in 2007. He joined the startup accelerator, Futureplay, as the chief technical officer in 2014 and focused on fostering technology companies.
We met with Jason Han to discuss the future blockchain ecosystem that Ground X aims to build. The key points of this interview can be summarized as follows: “Kakao will develop a global platform led by Korean technology.” “A service with a meaningful number of users is to be launched by the end of this year.” “Every participant can own the platform, i.e. the ownership and governance of the platform will be distributed among all participants.”
"I wish Korea can also lead the global market in IT platforms"Q. You are an expert in distributed systems.
I was always fond of “distribution”. I didn’t really like “centralization”. I don’t like telling other people what to do, nor receiving work orders from others. I think the future world will be centered on individuals. The society has gone through a tremendous development and the intelligence and rights of individuals will become more and more important. As much as the world changes, IT systems will also be altered into a form of 'distribution' and become more efficient.
Q. How did you start working on blockchain?
I’ve been keeping my eye on blockchain for 2~3 years and it suddenly went mainstream in mid-2017. I've decided to jump into the blockchain industry, thinking that it has potentials to make changes in various areas of the world. I learned and acknowledged the principles and limitations of blockchain by participating in cryptocurrency studies and working on Dapp (Decentralized Application: Decentralized service that runs on a blockchain platform) programming.
Q. How would you define blockchain technology?
You would not understand even a half of its real value if you deem blockchain as a mere technology. I’d define blockchain as a socio-economic technology. You have to consider both technology and the token economy when studying blockchain.
In terms of the data storage, retainment and distribution, blockchain technology has certain strengths that are absent in the existing IT systems. It is a new system that further strengthens the idea of transparency and security, which makes data tracking possible and prevents potential hacking respectively.
The token economy is like a fuel that makes blockchain run. Such business model did not exist before. The key is to foster the motivation of participants. It is designed in a way the principle of operation that triggers these motivations can be embedded in it. So participants will be self-motivated to take certain actions on their own, rather than reacting because they get paid by a central organization.
As the distributed ledger technology and the token economy merged, the blockchain technology itself became far-reaching and disruptive. It is powerful enough to destroy the currently existing business models and services.
"The speed and dynamics of the blockchain evolution are different. We need to understand this."Q. Tell us more about the disruptive innovation that blockchain will bring.
Let’s take the advertising business as an example. What would you do to beat Google's search advertising? There is nothing you can do if you are going to use the existing methods. The advertising market will remain the same.
But if use blockchain technology, you will be able to try something new that Google can't work on. In a blockchain-based advertising service where there is no middle man like Google, you can perhaps create a structure where users who actively watch advertisements make money. It’s like a compensation-based advertisement. Revenues that the middle man used to take will go to the participants, so manufacturers and consumers will get more profits.
The Future of Ground X and Kakao
Q. How did you come to work with Kakao?
Kakao held a seminar while I was preparing a blockchain-related business. After the seminar, I got an offer from Kakao to work on its blockchain service together. I accepted the offer on the expectation that with Kakao, I’d be able to make an impact not only in the Korean market but also in the global market with Korean technology.
Q. Was there a decisive factor in accepting Kakao's job offer?
It was Kakao’s culture. The sector which deals with blockchain is called the crypto space. If you want to work with blockchain, you need to be comfortable with the culture of crypto space, which is based on a mutual agreement. You should also be able to accept the atmosphere where personal capacity is valued.
After a few rounds of meetings, I could see that Kakao had an interesting culture, which was quite similar to that of crypto space. For example, Kakao follows the decision-making process of “trust, clash and commit”, and also is transparent in sharing information. Plus, it is more fearless than any other companies when it comes to new challenges. Those were the main reasons I decided to join Kakao.
Q. Do you think Kakao and blockchain go well together?
Kakao has a lot of good digital assets for blockchain projects, such as intellectual property in music data and web comics(“webtoons”), social networks, numerous communities and game data. There is enough room to connect blockchain to Kakao’s services, in terms of how to integrate those digital assets with the token economy and to convert them into blockchain. Should we take another example of other messenger services? Telegram for example? Telegram only has the mobile messenger. It does not have any other asset. I think Kakao has more possibilities to convert its services into blockchain than Telegram does.
Q. There is a concern of self-cannibalization due to the specific nature of blockchain.
Of course there is. My advice is not to convert everything into blockchain. The basic premise is not to touch the parts where centralization works efficiently. Let’s imagine that blockchain is applied to KakaoTalk. The current blockchain performance can’t handle KakaoTalk’s traffic, and there is no reason to consider adopting blockchain in KakaoTalk.
We can think of those services which needs blockchain in the short term based on two criteria. One is the market where we do not have strengths. I can take the global market as an example. We don’t have a competitive edge to compete with services which dominate the global market. Blockchain may help us compete with the top two services in the global market. We will have an opportunity to compete with the market leaders if we create new business models using blockchain. When we enter a market where we do not hold a strong presence, blockchain can become a good weapon.
Another thing is that blockchain can be easily applied when a sub-service is separated from an existing service. There is a Chinese streaming service called 'Uplive'. It’s like online Afreeka TV. Uplive also features a system called Diamond which is similar to Afreeka TV’s star balloons. This system is blockchain-based, so it can be used in Uplive as well as YouTube and Facebook. Blockchain has been applied without any adverse effect to the original service.
As some features of Uplive were allowed to be used globally, a synergy was created between the original service and the blockchain-based service. Uplive became widely known through Gifto, the Uplive’s tokens. Likewise, there certainly are areas where Kakao can achieve a synergistic effect through blockchain.
Q. It is said that Ground X will create its own blockchain platform. Is there a reason for not using an existing platform?
There are two reasons. We plan to launch a service with a meaningful traffic base within this year, and there is no platform that we can use. So we decided to create one. Ever since Ground X was established, I’ve had “time to market” in mind. I wanted to launch a service before the end of this year to prove the effect of blockchain. Startups raise 20 billion and 30 billion KRW through ICOs but no one has shown their services yet. I think the value of blockchain is proven when general users say “This service is good!”, but actually there isn't any blockchain service that they can use.
So we examined some platforms to develop a blockchain-based service, and we could not find one meeting our needs. Ethereum has a limited number of transactions it can go through, and EOS does not even have a main net yet. Then, I started to wonder. Since we have technical skills, we thought we could create our own platform by devoting our technical expertise.
The other thing was we felt up to developing a platform on our own. For blockchain, there is no dominant platform yet like Windows and Android. Although Korea is known to be an IT powerhouse, it has never ruled the world with such platforms. So we wanted to develop a meaningful platform with Korean technology.
Q. Your goal is to create a global platform?
The platform that Ground X aims to develop is not only for Kakao. We wanted to build a common platform in Asia. We are going to design a platform where participants can operate it together. The ownership and governance of the platform will also be distributed among participants. Kakao will not have a sole control over the platform.
Q. You’re a late mover in the blockchain industry compared to companies like Ethereum. Do you think you have a chance to succeed?
I really respect Vitalik Buterin, the founder of Ethereum. Ethereum is heading toward an extreme of decentralization, based on Buterin’s founding philosophy. It has nothing to do with an industry or a customer. Meanwhile, Ground X aims to launch a service as fast as we can even if it means we have to give up on decentralization a little.
On the other hand, I think we can succeed because our developers have lots of experiences. Korean developers are very good, you know. And unlike foreign blockchain developers, Korean developers have a lot of experiences in operating large-scale systems. When they concentrate on developing a blockchain platform, I am sure that they can make one in a short period of time.
Q. Did you say you’d give up on decentralization a little?
Developing a scalable platform within a short period of time requires some compromise with the goal of a complete decentralization. For now, we believe that we can achieve the desired performance to a certain extent if we lower our goal a little. Platform development can be more simplified if we restrict the system and allow only reliable nodes to participate in blockchain. Obviously, the platform can ultimately evolve into a completely decentralized platform on the open network.
Ground X will create a new corporate culture
Q. Based on what you said, it sounds like Ground X’s culture will be completely different from that of existing organizations and companies.
Those who are involved in the blockchain ecosystem like the decentralization philosophy. They prefer an environment where individuals are respected and can devote themselves to things that they want to do and enjoy. They love to work individually as they do not wish to get tied to an organization. I think in order to foster creativity in a blockchain company, the company should create an organizational culture in which every participant's characteristics are embraced.
Basically, transparency is very important. Information and schedules should be shared with everyone regardless of a person’s position in the company. A flat organizational structure should be in place on top of transparency. I believe that teams can be formed only when they are necessary based on different tasks that are assigned to deal with. That way, the members of the team might be able to show their competence and effectively handle those tasks. I think such structure is better than a hierarchical structure. Discussion is also important. Even if a manager or a certain department of the organization makes decisions, any member of the organization should be able to express their opinion. The decision should be open for discussion.
I deem Ground X as a studio model. People can come up with various ideas in blockchain. If someone has a great idea and decides to spin it off and set up his or her own business, we are going to fully support those decisions.
Q. Bearing in mind that the blockchain system possibly changes the organizational structure, do you think blockchain can be applied to the operation of Ground X?
It is possible. When people record what they do based on blockchain, it can be a proof that no one can refute. It can also be used for performance evaluation. Moreoever, decision making process can be conducted through polls as voting system and blockchain go well together.
We can also create a blockchain-based compensation system. For example, we can apply the token economy to our system by developing our own tokens that can be used in our business operation. Let’s call this token GX for now. Individual employees will have the GX power based on the number of GX they have. You can get GX when you help your colleagues, for example. With such power system, dynamics will arise within the company and GX can be linked to employee incentive system as time goes by. It may be difficult for now, but I am thinking of developing such structure gradually.
"Blockchain is a key for global market. The world will watch Korea's move on blockchain technology."Q. You will recruit new staff members soon. What will they do when they join Ground X?
There are mainly two parts in our organization – Tech and Biz. Tech involves both platform and Dapp development. I believe platform development will be the greatest opportunity of one's lifetime as one will be participating in a project to develop a platform that might likely lead the world. Dapp development is about developing services that suit the token economy and blockchain. It involves creating a smart contract using completely new methods.
For Biz, there are four main positions. One is a designer. Of course the role of a designer will change in blockchain. Designers will design the token economy. It is important for them to motivate people to participate and design a structure that fosters the circulation of tokens. So designers will handle product managing and planning and study how this structure can be integrated with services and how to design UX and UI.
Also, we need people to sell our products in the global market, particularly those who can develop businesses in Asia.
The third position is to support the ecosystem. Kakao’s blockchain business must be different from that of startups. Kakao should act like a big brother and lead the ecosystem. I want the ecosystem to be supported mainly by the technology. Currently the communities which lead the ecosystem focus more on investment and ICO. On the other hand, we wish to educate the technology developers, support platform studies and also sponsor college students with creative ideas.
Lastly, we are also recruiting the staffs whose work is to create and lead social impact as blockchain can be useful in solving social issues.
Q. There may not be many people who have experiences in blockchain development and business development.
I think fundamentals are more important. They will be able to learn the basic principles of blockchain if they work with us for about three months. Platform development requires a basic understanding of distributed systems. So platform developers should have basic experiences, like experiences of using large scale system or open sources. I admit that there are not many people who are familiar with Dapp development, but if you can cover the front end and the back end and develop a decent web service, you might be able to create a smart contract without difficulties. In terms of business, you are welcomed to join Ground X if you are smart and have business acumen.
Q. Do you think there is a certain personal trait which fits well with this field?
Everything happens so fast in this field. One month feels like a year. So we need someone who can adapt to this hectic environment and is able to catch up with the flow. In order to do that, you need to constantly challenge yourself. Therefore, someone who keeps looking for new things and devotes himself or herself in studying them would be a perfect fit for this field.
I’d like to work with people who keep nurturing intrinsic values, people who are not afraid of studying new things and make efforts to develop one’s own competitiveness. Ground X prefers people who feel comfortable with collaboration. We prefer people who can listen to other people’s opinions attentively and reflect on their own ideas at the same time.
Q. Will someone with little or no experience have a chance to join Ground X?
I think junior developers can jump into the token economy establishment, new business model development, platform development, and smart contract development because it is a zero base. Internship is an option but we won’t be able to offer an internship program in a near future as we will have to focus on platform and service development. In the long run, there will be areas where interns can demonstrate their capacity.
'We need to grant new opportunity for the young people to nurture their interests on blockchain."Blockchain to give hope to teens and other young people
CEO Jason Han passionately explained the value of blockchain and the future that Ground X dreams of throughout the interview. When we asked him about his upcoming schedule, he told us that he is going to participate in a blockchain discussion forum hosted by the university students. Although he is very busy since Ground X has been launched, he constantly seeks certain ways to support young people who willingly take new challenges and set their goals for the future.
We asked at the end of the interview if there is any last word he wants to add. CEO Han said, “As a person involved in the blockchain industry, I have a mission to build a ground where young people can play freely.” He added, “College students can create a service that allows them to square up to Google with their ideas because blockchain makes it possible," and “I hope the older generation will not take a dim view of those in teens and 20s showing interest in blockchain and cryptocurrencies.”
Kakao Ground X gets ready to explore the new world that has never existed before.How was the company name “Ground X” created?
How did Kakao Brand Lab do the branding of this new company which will lead the blockchain ecosystem in Asia? The first keyword was “ground”, as in a playground or an open ground where developers can participate, communicate and study freely. Then, “X” was extracted from the words “eXperimental” and “eXperience”.
Lastly, the name 'Ground X' was created signifying “an unknown space which has never existed before”, “infinite growth potential” and “the beginning of a new challenge”. The headquarter in Japan which will lead the direction of Kakao’s overall blockchain services is named 'Ground X' while its Korean branch is named 'Ground 1'. A new number will be added to “Ground” as Kakao’s blockchain unit opens a branch in a new region.
*The photos have been taken in HyundaiCard Studio Black, Gangnam.
