Eight-Dimensional Insight｜"National App" Kakao's blockchain chess game
There are two paths for the popularization of blockchain technology and crossing the "chasm": bottom-up innovation and top-down transformation
If Kakao Talk is WeChat, then Kakao is Tencent, an ecosystem with a deep and comprehensive layout
To realize the large-scale application of blockchain technology, it is necessary to create Internet-level enterprise experience (EX), user experience (UX) and developer experience (DX)
Building a platform is like building a new economic zone, which needs to be built: infrastructure, economic incentives and governance structure
Boldly assume that the implantation of electronic wallets in Facebook, WhatsApp, and Kakao Talk will directly increase the number of digital asset holders to the level of hundreds of millions, and this top-down user conversion is becoming a reality
The Enlightenment of the Trojan Horse Scheme:
Transform massive Internet users into blockchain users and occupy the traditional market
The empire map of South Korean Internet giant Kakao
Recently, the news that Facebook will release the white paper of the Libra project on June 18 has aroused heated discussions. According to reports, a team led by former PayPal president David Marcus is building an asset-backed cryptocurrency that will operate on Facebook's existing instant messaging infrastructure (WhatsApp, Instagram and Facebook Messenger).
Just like the status of Facebook and WhatsApp in Europe and America, the status of WeChat in China, in South Korea, there is a Korean "WeChat" called "Kakao Talk" that is used by men, women and children. In South Korea, which has a population of 50 million, Kakao Talk has more than 43 million monthly active users and a penetration rate of 95% among smartphone users. It is known as the "National App".
Among the three mobile social giants in Asia, Kakao Talk was launched a year earlier than WeChat in China, and half a year earlier than LINE in Japan. In 2014, Kakao completed the merger with Daum, the second largest portal in South Korea, and became a listed company, renamed Daum Kakao, with a current market value of US$10 trillion.
If Kakao Talk is benchmarked against WeChat, then Kakao Ecology can be benchmarked against Tencent. Kakao Talk is mainly free to use, and earns revenue through commercial methods such as paid emoticons, coupon sales, mobile payment, advertising marketing, and game distribution. , AI/Blockchain, games, online literature, music/video and IP including the Kakao empire of various businesses.
Diverse businesses: advertising, travel, FinTech, games, AI/blockchain, online literature, music, IP
The Kakao empire makes people have to think of China's BAT. For example, mobile payment Kakao Pay is benchmarked against Alipay, financial technology Kakao Bank is benchmarked against Tencent’s WeBank, and Kakao Games is benchmarked against Tencent Games. In Kakao's IR report, we found a theoretical basis for this intuitive judgment.
South Korea's "WeChat Pay": kakao Pay
Among Kakao's strategic investors, there are indeed Ant Financial and Tencent. Tencent invested in Kakao Talk in 2012 and obtained a 13.84% stake in it; Ant Financial injected $200 million into Kakao Pay in 2017 and opened up Alipay’s 34,000 merchants in South Korea; Tencent became the second largest shareholder of Kakao Bank in 2017. And invested in Kakao Games in 2018, the investment amount reached 293 million yuan, accounting for one-third of the total financing amount.
Tencent and Ant Financial are important strategic investors in the Kakao ecosystem
It can be seen that Kakao has grown from a simple chat tool to a global enterprise with a vertical and horizontal layout and a full ecological layout. Its growth can be summarized into three stages:
Kakao1.0: Communication
Kakao2.0: Mobile Ecosystem
Kakao3.0: Synergy + Global (synergy + globalization)
In the future planning of Kakao3.0 stage, the strategic layout of "synergy + globalization" will be realized through four directions:
artificial intelligence
artificial intelligence
Blockchain (Ground X, Klaytn, next-generation ecology)
IP industry
The blockchain will become an important layout of Kakao 3.0, which is not a plan that only stays on paper. Kakao has established Ground X, and received a strategic investment of US$90 million in March 2019. This round of financing was led by IDG Capital, Translink Capital, and Crescendo Equity Partners. Ground X is responsible for developing and operating Kakao's public blockchain platform Klaytn.
Klaytn's mission is very clear, to become the first blockchain platform to achieve mass adoption, to provide millions of users with an Internet-level deployment environment and a friendly user experience, thereby proving the value and utility of blockchain technology.
exist
existBlockchain vs Internet Revolution: Are We In 1994? What's the next step?In this article, we mentioned a concept - "The Chasm". At present, there are about 4 billion Internet users in the world, and blockchain users are still in the "innovator" range of 2.5% of the global population, and have not even entered the early adopter stage.
An emerging technology that wants to cross the chasm, from the edge to mainstream adoption, mainly faces two difficulties:
Lack of channels to acquire users
Lack of a friendly user interface
There are two paths to solve these two problems, one is bottom-up, externally driven subversive change, and the other is top-down, internally initiated improved innovation. Representatives of the former include Bitcoin, Ethereum, and EOS, while representatives of the latter include Hyperledger, Quotum, Corda, and Klaytn.
Public chain and private chain/consortium chain
So far, the blockchain market has been mainly driven from the bottom up by entrepreneurs and developer communities, who have outlined a decentralized business blueprint and underlying infrastructure, such as API vs Smart Contract (API vs Smart Contract), Database vs Blockchain (database vs distributed ledger), App vs Dapp (application vs decentralized application), Finance vs DeFi, etc.
Although subversion sounds very "sexy", another top-down path cannot be ignored. After all, the giants have hundreds of millions of existing users, a complete industrial ecology and strong technical strength.
Previously, most of the giants chose to deploy enterprise cloud infrastructure services, such as Microsoft Azure, Amazon AWS BaaS, Oracle Blockchain and Baidu’s blockchain engine BBE, Tencent’s TrustSQL, Ant Financial’s Ant Blockchain, Ping An OneConnect and so on.
And now, those social networks with huge customer bases are joining, such as Kakao, LINE and Facebook. If the previous stage was dominated by the lower-level BaaS platform, then we have seen the dawn of BDapp applications.
Facebook is developing a solution to allow stablecoin payments on its messaging app WhatsApp, while Samsung and HTC recently announced that they are already developing hardware to introduce built-in digital currency wallets in the Galaxy S10. The dilemma of blockchain crossing the chasm is actually the advantage of large To C companies (Starbucks, Facebook, Wal-Mart, etc.) and financial institutions (Fidelity, Nasdaq, Goldman Sachs, etc.):
Lack of channels to acquire users ⇋ has a huge C-end user base
Lack of friendly user interface ⇋ the ultimate pursuit of the last mile user experience
Klaytn clearly puts forward the value proposition of "letting the blockchain be used by tens of millions of users", which is not just "painting a big cake". As a "rich second generation", Klaytn has a prominent and difficult to replicate advantage, that is, it has deep business resources and a large number of native users from kakao and its partners.
50 million native users and 400 million partner users
Partners in the fields of data, information security, e-sports, content, life, and insurance
As Jason Han, CEO of Ground X said: "Creating meaningful real cases will be the next major challenge facing the blockchain industry. Klaytn is working with a group of successful companies that have developed and operated and accumulated tens of millions of users. Create a Killer BApps (killer application) that is friendly to these users."
Create a special economic zone in the digital world - industry as body, technology as application
Klaytn's ambition is obviously not limited to a widely used application. Its goal is to attract more developers, enterprises and users to this open platform for innovation through positive economic incentives.
Just like building a new economic zone, an open platform also requires the cooperation of hardware and software. In addition to road and bridge planning, preferential policies for attracting investment and talent-friendly facilities must be formulated to attract talents and businesses to generate income for the new zone.
In the same way, in the digital world, creating an open blockchain platform is nothing more than the cooperation of three parts:
Infrastructure (network, account, transaction, computing, storage)
Economic incentives (financing structure, consensus mechanism Proof of Contribution)
Talent governance (community contributors, committees, voting)
Structure of toolkit, technology platform, and application ecology
In a prosperous new economic zone, only by allowing city builders, enterprises and citizens to feel a good living and working experience can people be retained. Similarly, in the blockchain ecology, this is reflected in the triple experience of DX, UX and EX:
1) Developer Experience (DX): The platform provides API interoperability tools and IDE, making it easy for developers to get started.
2) User Experience (UX): Provide user-friendly functions including private key management, wallet settings, and account management.
3) Enterprise experience (EX): Without compromising high transparency and security, decentralized applications or services are realized through enterprise-level performance. In the early stage, subsidies are used to motivate enterprises to participate and provide BI (business analysis), etc. Tools to help businesses become profitable as quickly as possible.
Qianlong soars to the sky
40 years ago, Shenzhen was still a small fishing village. 40 years later, Shenzhen has emerged as a metropolis. From the perspective of time dimension, the special economic zone in the digital world - the blockchain platform also needs to go in three steps. The first step is to lay the foundation of the underlying technology and economic mechanism, the second step is to quickly realize the expansion of business and users, and finally the Grow into an ecology that can accommodate hundreds of millions of users and merchants:
Foundation period: build a stable technology platform and design a feasible economic incentive mechanism
Expansion period: Work with partners to achieve rapid user expansion through business migration and project landing
postscript
postscript
In order to achieve a penetration rate of 1/4 of the global market, it took 46 years for electricity, 35 years for the telephone, 14 years for the TV, and 7 years for the Internet. We estimate that it will take about 15 years for blockchain technology to reach the level of popularity that the Internet currently has. Forming strategic alliances with big players (such as Facebook, which has a 44% market share in the global segment, and Kakao, which has a 93% market share in South Korea), and with the help of their resources and conversion of massive users, we are expected to accelerate the realization of this small goal.
Author: Wei Ran@eight-dimensional capital
Original by Eight-Dimensional Capital Research Institute, please indicate the source for reprinting
