Meet Kakao: How Korea's Largest Mobile Giant Is Embracing Blockchain

This tendency may also underly the seeming contradiction that large corporations, which typically exert centralized control over a product or service, are embracing new decentralized technologies such as blockchain and the token economy.

Kakao is a corporate giant that dominates the Korean mobile market.

Based on this overwhelming market share, Kakao has successfully expanded its operations into markets such as advertising, gaming, mobile banking, taxi services and music.

As one of the leading "Middlemen" that has taken control of the mobile platform market in Korea, if Kakao chooses to embrace blockchain - which eliminates the middleman and allows users to directly exchange value - what would happen to the massive profits the company currently earns in its intermediary role?

"What kind of strategy could Kakao adopt if it wanted to export its successful service to the Asian market? Each country already has one or two established services. The only solution I can think of is offering incentives through blockchain. With blockchain, you can shake up the existing order."

North America-based messenger service Kik is also working on a blockchain business called KIN, while Telegram has raised $1.7 billion through an ICO, the largest amount ever recorded in a token sale.

"Messenger services like Telegram have an advantage since they already have a platform with an established user base. This is why we need to pay attention to what these companies are doing. On the other hand, those messaging services have lots of users but no other services, while Kakao already provides a wide range of services."

"If a platform has a very well-refined philosophy, will users be willing to pay for that value? You need to be issued a private key and install a wallet, but if you lose your private key, you lose all your money. Even the person who created the platform can't recover the money for you. It's ridiculous to the average users. Performance and speed are the basics, but even once you've got that sorted, it's just the beginning. The first step for us is figuring out what we need to do to make Kakao's services work and how to support millions of users accessing a service at the same time."

Kakao plans to launch its main network alongside meaningful services by the end of the year.

When Kakao announced the establishment of its blockchain subsidiary in March, Financial Services Commission chairman Choi JongKu reaffirmed his negative view on token sales.