I read this week that JP Morgan has launched it’s own blockchain system, JPMCoin [2]. I gather that this system is based on “a private version of Ethereum”. It is a permissioned blockchain with some of the data on the blockchain and some of the data private. If I understand correctly, it uses trusted nodes as validators, not the peer-to-peer of Bitcoin or Ethereum 1.0, though possibly similar in spirit to Ethereum’s Proof of Stake, except no proof is needed.
The first big use case will be interbank transfers. The blockchain and related cryptographic protocols offers huge savings, perhaps hundreds of millions in this application. It could also eliminate tens of thousands of jobs.
Wow!
This is one of the most non-Nakamotoan blockchain projects ever!
First of all, JP Morgan is the very definition of “The Man”. When Nakamoto was thinking about freeing us from the tyranny of third parties, he was thinking about JPM.
And I’m pretty sure that saving JPM millions was not at the top of his goals for Bitcoin.
The project itself is definitely not Nakamotoan. It is not peer-to-peer, it is not transparent, and it is basically controlled by on, powerful, centralized organization.
I’ll note that the code is “based on” Ethereum, which is yet another case of wall street appropriating public code, and then claiming ownership of the derived product. Are they going to contribute back to the community that created the software? Don’t bet on it.
Bottom line: this is a perfectly reasonable use case for permissioned blockchains, in fact, a completely obvious use case. But this is really violates a lot of the original spirit of Nakamotoism: centralized, opaque, and benefiting only “The Man”.
- Stan Higgins (2016) JP Morgan is Quietly Developing a Private Ethereum Blockchain. Coindesk, https://www.coindesk.com/jpmorgan-ethereum-blockchain-quorum
- Daniel Palmer (2020) JPMorgan’s ‘JPM Coin’ Is Live, Execs Says. Coindesk, https://www.coindesk.com/jpmorgans-jpm-coin-is-live-exec-says
Cryptocurrency Thursday
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