Though South Korea’s crypto markets have weathered their share of regulatory storms, their enterprise blockchain space has managed to gain momentum relatively unopposed. However, the sector’s development has also been quiet. Their biggest blockchain startup, BLOCKO, just hasn’t gotten much outside recognition. Currently, the company runs Coinstack, a blockchain-as-a-service platform that helps companies integrate new technology into their current systems. They’re in the process of transitioning over to a new platform, AERGO, which will bring them into a more public-facing position.
BLOCKO hasn’t just been rolling out theoretical tech, though: its applications are being used by over 25 million users around the world through companies like Samsung, Lotte, Hyundai, Credit Suisse, and many others. Because they’ve been almost exclusively business-facing in the past, they haven’t attracted broad international attention in the way that projects like ICON have.
Thanks to their AERGO project and a big push for community involvement (contributing to buzz will get you tokens), that’s changing. Where Coinstack was interesting for its SDK and for being interoperable with existing systems, AERGO promises to bridge the gap between permissioned and public chains, and it supports a variety of smart contract types, programming languages, and consensus mechanisms.
BLOCKO & Coinstack: What they do and how they work
BLOCKO’s overall mission is to make enterprise blockchains easy to develop, easy to run, and easy to connect to existing infrastructure. The first stage of that process, focused mostly on private chains for businesses, was Coinstack, and though it’s met success in multiple use cases, the new hybrid public-private AERGO chain will ultimately phase it out.
Coinstack’s core blockchain technologies are nothing new, but its approach to development gives it an edge over some similar projects. It markets itself as “middleware”—a sort of bridge technology between an enterprise’s existing infrastructure, blockchain tech, and dApps. Anyone using Coinstack gets not only a blockchain network but also an SDK (Software Development Kit), making it easier for developers to build with it, as well as support for APIs that make shuffling data around a lot easier. While AERGO will add some fancy new features, the basic success of BLOCKO and Coinstack so far seems to have been in providing accessible and secure solutions to companies that otherwise would likely be a lot more cautious about approaching a relatively untested technology.
With about 25 million users currently on services run by Coinstack, though, its strategy seems to have worked very well. Their portfolio includes:
- Lotte Card: One of South Korea’s biggest credit card companies, Lotte Card used Coinstack to build a biometric login system for their app, and it’s been going since 2016.
- Korea Exchange: The Korea Exchange (Korea’s main stock exchange) launched the Korean Startup Market, providing a marketplace to trade equity in startup companies. Its document and identity authentication systems are both built on Coinstack.
- Samsung SDS/Nexledger: The ICT branch of Korea’s most well-known company has been working with BLOCKO and their Coinstack platform to develop their own enterprise blockchain structure, Nexledger, as well as offering services to the Samsung credit card.
- Voting in Gyeonggi-do: Though it isn’t their most profitable venture, Coinstack successfully ran a community vote in Korea’s populous Gyeonggi Province.
The exact technical details behind Coinstack aren’t directly available since it’s a proprietary platform, but in broad strokes, it’s based around an SDK built for a full-stack blockchain solution originally branched off of the Bitcoin protocol and the Ethereum Virtual Machine. It’s also come to support programming languages like Java and Python. The blockchain infrastructure may vary from application to application, but once it’s in place, the Coinstack middleware makes it easier to monitor and develop it.
How AERGO Works
AERGO is being developed as a replacement for and expansion of Coinstack. Where Coinstack is a relatively closed-off, custom-built solution, AERGO will be an open-source platform with its own chains, hub, marketplace, and features designed for enterprise use. It is using Coinstack as a base, but it will ultimately look much different when it rolls out. It comes with a whole laundry list of interesting points that, combined with BLOCKO’s previous track record, paint a good overall picture for the project’s future.
The AERGO project’s main goal is to be, like Coinstack, a platform that enables businesses to build and manage blockchain solutions, but in a much more open ecosystem that will allow developers to deploy new technologies on it and scale it however they like. The project is being built on three main components: a public chain to act as the backbone, a blockchain hosting service for building and deploying custom chains, and a marketplace to exchange software and computing assets.
AERGO Chain
This is the main public chain for the AERGO project. It runs on a delegated proof-of-stake (DPoS) consensus mechanism and effectively connects everything else that is built on the AERGO network, from enterprise blockchains to dApps. One of its big selling points is AERGOSQL, the chain’s smart contract engine that uses the already-popular SQL programming language.
AERGO Hub
AERGO describes this as a blockchain hosting service, and that’s essentially what it is. The AERGO chain aims to be easy, and the hub is what adds that extra layer of accessibility. This is the public interface that allows other, independent blockchains to be built on and deployed to the AERGO network. As with Coinstack, though, these chains can be custom-built to be fit-for-purpose—they don’t even have to follow the same consensus mechanism as the main chain, as both RAFT and PBFT are supported. It’s fairly similar to existing cloud web services, with development tools and support to help anyone build and control their own project without having to worry about public forks or updates.
AERGO Marketplace
AERGO Hub will allow users to access the marketplace, which is where programs, services, and resources available to the AERGO ecosystem can live, kind of like an app store. It’s not just for third-party developers to sell software, though—it also works as a way to buy and sell computing resources (somewhat similar to the Golem marketplace on Ethereum), and will allow a broader ecosystem to develop.
Ultimately, AERGO is slated to be the replacement for Coinstack. If companies want to upgrade their existing Coinstack platform to the new version, they should be able to do so with minimal disruption, as it seems to be backwards-compatible. While Coinstack has so far been used primarily for private permissioned chains with limited functionality, the new platform’s open-source, dApp-ready structure is aimed at accommodating pretty much anything you could think to put on a blockchain. It’s accessible to developers, compatible with a lot of existing business systems, and can be scaled up as much as necessary without bumping up against the limits that make many public blockchains less practical.
Tokens and Timelines
BLOCKO itself has received a fair bit of venture capital money and is also taking in revenue from its own ventures, so it’s fortunate in that it doesn’t need to stake a lot on an ICO. There may be one at some point, but the only official word so far is that the very first tokens will go towards community incentives to increase awareness of the product. This is mostly an effort to bolster one of BLOCKO’s weak points, which is that they, as a mostly enterprise-facing company, haven’t gotten quite the recognition in the crypto space that similar projects have managed to get.
Since community contributions will be reviewed on a case-by-case basis and the applicants will be subjected to KYC/AML procedures, the initial drop could take a while. Additionally, two big markets, the US and China, aren’t allowed to participate due to regulatory issues.
Once the system gets off the ground, though, the native token will be required for smart contract execution and to perform other operations on the AERGO chain, so it will have some real-world value. How many of the companies currently running on Coinstack will be coming over to AERGO isn’t known, but with the community initiatives and backwards-compatibility, the project has a decent chance of starting off with enough big names to give it some traction.
The official timeline is that the AERGO mainnet will be coming online in Q1 2019, with the Hub and Marketplace coming in Q3 2019, though, as with any project, this is subject to change. As of October 2018, they’ve released the first of their core open-source technologies, LiteTree, which will help with the management of their SQL-based smart contracts.
Outlook
Cryptocurrency may have been sliding into a valley for quite some time, but projects like BLOCKO’s Coinstack and AERGO are far less susceptible to the changing tides. They don’t have the radical, decentralized vibe that made a lot of other projects popular in the beginning, but they do have a very reasonable business plan with a heavy focus on compatibility and interoperability, which makes them a lot more likely to attract real, serious users from the start. They may be second only to IBM in the number of real-world applications they’ve managed to roll out already, and even if they end up only being a moderate or a regional success, they’re at least going to be interesting to watch as they try to bridge the multiple gaps between public/private blockchains, smart contracts, developers, and real-world enterprise applications. If blockchain tech as a whole is going to go anywhere, it’s going to need to evolve towards user-friendly interfaces and services on every level.