J.P. Morgan, who’s CEO Jamie Dimon previously called Bitcoin “a fraud” and would “fire a trader in a second” for dealing in Bitcoin will now be pursuing Quorum, an enterprise version of Ethereum.
Quorum’s chief goal is to enable the operation of smart contracts and will start with “tokenised gold bars to allow sustainable miners to earn a premium on global markets”. J.P. Morgan’s head of blockchain initiatives, Umar Farooq, said that they “are the only financial player that owns the entire stack, from the application to the protocol”.
The article cited that “JP Morgan and Credit Suisse are members of the Enterprise Ethereum Alliance, which is developing standards for the technology”. Umar Farooq also highlighted that since they are apart of the Ethereum network, they can benefit from upgrades and tap the development community.
“We are all building private networks but there is a long-term thought process of what happens when you get to a point where you need to do private-public convergence – a connection –and at that point, if you are in some ways a derivative of a public platform, it could become easier”.
Growing interest in blockchains highlights importance of open-source access
Even though this is a 180 degree turn for J.P. Morgan from earlier statements, it is not the first time that a large institutional bank has signaled interest in blockchain technology. Fidelity has launched its own custody account and has taken a 15% stake in Neptune Dash, the publicly traded fractional Dash Masternode ownership company. Then HSBC India and ING Bank Belgium reportedly made one of the first blockchain-based trade transaction platforms. Banks are increasingly finding security and cost advantages to integrating blockchain technology into their operations.
However, this growing interest is also a warning to the importance of open-source access and decentralization. While it can be difficult for any system to be trustless since most people are not an expert in every field and must eventually default to trained expertise, open-source access and decentralization mitigates risks of trusting different systems. Allowing anyone to audit and edit code instills confidence in users that the system they are using could withstand the scrutiny. However, banking blockchains are increasingly becoming private and enterprise versions, which become closed off from the public versions available on github. This introduces an extra degree of risk since the consumer is less aware if the bank implemented various changes that made the private version less secure, more expensive, or other violations of peer-to-peer, decentralized, digital currency.
Dash focusing on building open-access and decentralized applications
Dash has been focused on becoming an easy to use cryptocurrency in everyday life, which requires certain modifications to make it easy to use for the average non-tech consumer. Dash is working towards that with Evolution by implementing a series of upgrades to make Dash’s user interface and user experience much more friendly. However, equally important as usability is the ability for anyone to develop decentralized applications (DApps) on top of the Evolution platform to provide consumers with necessary services. Andy Freer, Dash Core Group’s chief architect, just left the team because he was confident in Evolution’s near completion and wanted to focus on developing DApps and helping teach new developers how to create DApps on top of Dash.
This platform will allow consumers and merchants to have access to more applications and data, but will still remain open so either they or other developers can verify and check the code and data. Dash’s strategy allows for banks and other entities to develop useful applications on Dash without closing off their ecosystem from consumers and merchants and their ability to check code and data. Even if banks still create their own networks, Dash will provide a playground for developers to be incentivized by the Treasury to easily create open-source competitors.