After the cryptocurrency frenzy from late 2017 to early 2018, public interest toward digital coins has dramatically dwindled along with the prices.
The value of marquee crypto currency bitcoin that once surpassed $20,000 per coin now hovers around the $5,000 level. Ethereum, or ether, the second-largest digital currency by market capitalization, has marked more than a tenfold decrease in valuation after reaching a high of $1,400 in January 2018.
Despite this, crypto developers and blockchain companies have been working behind the scenes to come up with improved services while more traditional tech giants -- such as Facebook, Amazon and Samsung Electronics -- are increasingly joining the crypto trend.
Coinduck CEO Shin Min-seob. (Coinduck)
Coinduck, the world’s first ethereum-based payment solution, forecasts that the blockchain market will continue to grow despite the drastic price fluctuations thanks to the entry of conventional retail and tech businesses and technical advancements.
“Although blockchain will not probably replace the whole internet -- as previously envisioned by many pioneers -- I believe it will certainly serve as an alternative to some parts of it,” Coinduck CEO Shin Min-seob told The Investor in a recent interview.
“Just over the past year, blockchain technology has made great strides, and the transaction speed, for example, is not considered a major issue anymore,” he added.
Efficiency is the strongest point of the company’s blockchain payment solution, according to the CEO.
Tourists, for instance, do not have to go through all the hassles involved in money exchange.
Instead of changing money into local currency, they can just scan a smartphone QR code that is displayed at restaurants to pay for their food with their ethers.
Once the scanning is done, crypto coins from customers’ digital wallets are automatically transferred to restaurants. This payment process only takes 30 seconds on average.
Restaurant owners can also choose to receive the payment in local currency depending on their preference. The startup takes 1 percent of the payment as a fee.
With the Coinduck solution, there are no lengthy intermediary steps between merchants and traditional card issuers, which usually takes a week or two. From payment to clearing, it only takes a day or less with the crypto system.
The Seoul-based company began as an in-house startup under blockchain firm Chain Partners in November 2017, and first made headlines when its payment solution Coinduck was adopted in the world’s first blockchain smartphone Finney in November 2018. The crypto system was also made available at some of the venues at the PyeongChang Winter Olympics in February 2018.
After being spun off in August 2018, the crypto startup took part in Samsung’s C-Lab startup accelerator program. Riding the momentum, the payment solution became one of the first four blockchain services available in the Galaxy S10 smartphone, which was released in March this year.
“When Coinduck was picked for the accelerator program, I got a feeling that Samsung was considering to adopt the payment solution in the S10,” the Coinduck CEO said.
For Samsung, the startup was a less risky option to enter the blockchain market than others, such as crypto exchanges, as its service does not impact the price of certain coins.
“Many things are still unclear in the blockchain industry, and that is why many big conglomerates hesitate to get on board,” said the CEO, adding “I hope there is more clarity down the road.”
Using the crypto payment solution, S10 users in Korea can pay for their offline purchases with ethereum currently at more than 1,200 bars, restaurants, and stores across the nation.
The S10 being sold outside Korea is not compatible with the blockchain solution at the moment, but any smartphone user can still utilize the Coinduck service with their existing crypto wallets.
Expansion into e-commerce
In order to scale up the current business, Coinduck is planning to bring the payment solution to the online realm.
The company, for example, can enable online sellers on social media -- like Facebook or Instagram -- to be paid with crypto coins, which will likely remove a range of barriers in the Korean e-commerce market, including digital authentication certificates and limited money transfer apps.
“Coinduck will try to put focus on linking the nation to the rest of the world with blockchain,” the CEO said.
He believes that the partnership with Samsung will help the blockchain startup gain a footing in different business sectors.
The company has already received some limelight. Since the crypto solution was fitted in the S10, global smartphone and crypto companies have contacted it to discuss a partnership. Although nothing has been decided, Shin said there will be more opportunities this year for the business to take off.
Shin has so far founded three startups, including Do!Nation, an e-commerce platform where restaurants donate food in return for free promotional campaigns.
The serial entrepreneur said he felt competing with heavyweights like Baedal Minjok in the food-related industry was an uphill battle, so he found blockchain as a “blue ocean” and jumped into the emerging industry.
“After having run those startups for the past years, finding a less crowded area does not necessarily lead to success,” said the CEO, adding that “entrepreneurs should choose to do what they can dedicate themselves to.”
By Kim Young-won (firstname.lastname@example.org)