Korean government set to invest up to $110 million on blockchain R&D

Today the Ministry of Science and ICT announced that the Data Economy Blockchain Development Project has passed a feasibility study. As a result, the Korean government will invest anywhere from $83-110 million in the project which will develop core blockchain solutions such as consensus algorithms, smart contracts, and DID.

The project’s main goal is to prepare the country’s infrastructure for a transition to data economy with blockchain-based solutions that improve processing performance and protect privacy. The project is planned to operate for 5 years from 2021 through 2025 with a sizable government grant.

Specifically, the core technologies slated for development in the project include consensus algorithms, smart contract security technology, distributed identity (DID)-based systems which manage identity an personal information, and data management technology which guarantee data sovereignty under Korean law.

Consensus technology will be used to promote stability and security in decentralized systems regardless of the amount of participants on a network and whether and how that amount changes. Normally, as the amount of users on a network increases, the stability and speed of the network suffers which affects scalability. This makes consensus a key element in the design of a blockchain and is likely to take the lion’s share of the funding throughout the course of the project.

It comes as no surprise that DID made the list of main targets for development as part of this project since DID has been trending among government ministries and private companies alike since last year. For example, major Korean telecoms giants LG U+, KT, and SK have formed a consortium to handle the development of DID solutions through the PASS app and other programs in development. There is also a mobile drivers license app now available for residents of Busan. Raonsecure and Kakao, through Klaytn, have also begun developing their DID platforms both for commercial and for government use. Additionally, the MyID consortium backed by ICON aims to provide security through DID. The consortium includes dozens of telecoms and blockchain companies, such as Bithumb.

The project plans to use DID management technology to develop a private key recovery and data encryption solution with biometrics. The use of biometrics would be a new use for DID applications that generally authenticate an individual’s ID with the use of digitized documents and personal information. This could protect user privacy to a higher degree than existing security features.

The Ministry of Science and ICT is also planning on developing large-scale node management technology and large-scale distributed data storage technology to process data more efficiently. It’s expected that they will need to develop an index analysis and query language solution for rapid search on the distributed system. It’s not clear exactly how a distributed data system could be kept secure if sensitive and pertinent data were stored there since theoretically anyone with access to the network would have access to all the data therein. This has been the key issue in distributed medical data storage.

This project passed all the tests so far with one exception. When the ministry applied for the feasibility test from Yeta last November, they requested about $400 million in funding for the project. Now the funding is just over a quarter of that initially-requested amount since the scale of the project was also apparently scaled back from the initial plan.

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