Simply put, blockchain creates trust. The decentralized blockchain method carries out transactions via trusted nodes on a distributed ledger, which is different from the previous way of 'centralized' transactions. It means that transactions are secure as it is difficult to hack the distributed structure. It also does not require any centralized management, making it possible to avoid any potential risks. There is no need for a complex process because transactions don't have to be authenticated by a third party. However, the blockchain technology might be abused in gambling, drugs and black market transactions because of its anonymity. There is also the risk of data privacy violations in case delayed transactions occur during a surge in transactions. Solutions for these risks will be found as technologies advance.

 Have you heard of the blog Steemit? Steemit is a blockchain-based social networking website that rewards its users for their content. It is a blog that creates positive online community by attracting good content creators to the platform. Steemit is enjoying rapid growth without any advertisement revenue but by rewarding its creators only for their content. It is threatening Facebook, which earns 50 trillion Korean won annually in advertisement revenue. The below cartoon explains how Steemit works.

 It is no exaggeration to say that the first cryptocurrency Bitcoin, which was created by Satoshi Nakamoto in 2009, shone a light on blockchain technology. There are still many who think 'Bitcoin = blockchain.' Those of you who are reading this column will now be able to explain blockchain technology with certainty.

 Dubai is implementing a project to become the world's first blockchain-powered government by electronically recording real estate registrations on blockchain and managing all governmental documents via blockchain service, expecting a maximum of 75% in cost savings.

 Walmart China and IBM China also maintain the safety of food products by utilizing blockchain technology in recording country of origin, expiration date, warehouse temperature and delivery process of food products to prevent forgery or falsification by intermediary distributors.

 We can find examples in Korean businesses as well. Many companies are building and using blockchain technology-based platforms. For example, XBlock Systems is pursuing a pilot project of a blockchain-based service of issuing medical records certification with LG Uplus. Chain Partners also launched a settlement service that allows payment by cryptocurrency at offline stores.

 Samsung SDS developed its blockchain platform, Nexledger, and rolled out an electronic contract system and payment/settlement service. Other IT companies in Korea also are competing in building blockchain-based platforms.

 Many companies and experts assess that the scalability and decentralized security of blockchain technology will be combined with Internet of Things (IoT) devices, applications and platforms. That is because IoT network is also dispersed and decentralized. The Korean government is increasing its budget support related to blockchain. Let's take a look at the scalability of blockchain technology, which can be applied in various areas.

 Smart Contracts is a form of automated contract that uses blockchain technology. Smart Contracts safely records patients' medical records, including doctor-patient consultation, disease and treatment information, and vaccination history. Such records can be accessed from anywhere, but it requires an encryption key that allows only the patient to access his or her records, allowing it to be used in various medical services.

 There are startups that help musicians sell music. Musicians provide their music on the ledger and Smart Contracts ensure that only those who pay can access music allowing them to use media in a cheaper and quicker way.

 Civil is a blockchain-based journalism platform. This prevents money power and political power that may be involved in the process of news production and distribution by news agencies. ConsenSys founder Joseph Lubin said, "Blockchain's decentralized technology will open a new chapter in news media. The power taken by those with power and money will be returned to the hands of journalists and readers."

 The role of real estate brokers can be replaced by blockchain technology via Smart Contracts, enabling lower commission and transparency in information exchange as the technology allows direct individual-to-individual transaction. This enables not only real estate commissions but also companies' transaction fees to be removed.

 There are of course many problems that need to be solved as blockchain technology is an emerging new technology. In a commercial environment participated by and open to unverified and unspecified individuals, complete transparency might not always be a good idea. There can be issues related to personal encryption key management and transactions need to be based on scalability and trust because there are risks related to duplicate transactions. There is also the need for exclusivity in accessing critical data or confidential data.

 They say that 20% is about blockchain technology, while 80% is business in a business transaction. This means that blockchain technology requires an agreement and trust among participants. Amorepacific can find areas to expand business, accelerate growth and reduce costs by using this new technology. Applying blockchain technology in our door-to-door sales system to enable sharing transaction details quickly and with transparency between stores and HQ or facilitating product purchases using cryptocurrency on the Beauty Point App may be interesting ideas.