I understand the blockchain product layout of JPMorgan Chase

JPMorgan Chase, one of the giants in the US banking industry, whose CEO Jamie Dimon has bombarded Bitcoin many times, but in fact, JPMorgan Chase is the first to touch the blockchain. One of the financial institutions.

So, what is the blockchain layout of JPMorgan Chase in the past few years?

Below, the former developers of the JPMorgan blockchain division will tell us the story behind the bank's blockchain products.

The original authors are Stuart Popejoy and Will Martino, who worked together in JP Morgan Chase's blockchain department, led and developed Jongen Chase's first blockchain project, Juno. After 2016, they left JPMorgan Chase and Co-founded the blockchain startup Kadena.


(Image courtesy of flickr.com)

Juno: The prototype of JPM Coin

JPMorgan’s brand center is centered around finance and banking, not software and technology. The bank also knows the importance of adopting valuable financial technologies and making strategic investments in future innovations. In 2015, JPMorgan Chase established a new product division to evaluate the bank's potential technology vendors from cloud to big data solutions.

Six months later, the blockchain quickly became the main focus of JP Morgan Chase. JPMorgan evaluated all the blockchain projects in the market at the time, from Ethereum to digital assets, from Ripple to Hyperledger. Obviously, the blockchain selection at the time was not technically suitable. Real enterprise applications.

After evaluation, JPMorgan decided to build its own blockchain internally, they want to show the bank that the technology is feasible, and Juno is such a demo product based on a Byzantine fault tolerance (BFT). A variant, and known as Tangaroa's consensus algorithm, Juno is designed to be a viable private blockchain that supports enough transaction volume per second to satisfy enterprise applications.

This demonstration became an early payment pilot project, and JP Morgan Chase deployed in offices in London, Tokyo and New York, which speeded up transaction settlement, similar to what JPM Coin did today. In 2016, JPMorgan opened the open source for Juno and submitted it to the Hyperledger Foundation.

Juno can be said to be an example of a well-performing private blockchain in the early days. It shows us the actual value of the blockchain. Despite some progress in the project, JPMorgan was not ready to put all its power and The brand was placed behind the blockchain and it was reluctant to push Juno and the payment pilot project at the time.

Quorum License Blockchain

When one of JPMorgan’s teams built Juno products, the second team was working on an integrated Ethereum virtual machine (EVM) and sidechain project that eventually became JPMorgan’s current Quorum blockchain platform. Quorum is based on the code of Ethereum, a licensed blockchain designed for the needs of financial institutions and businesses.

The challenge for Quorum is that it relies too much on Ethereum's EVM and Solidity's smart contract language. Quorum chose Ethereum to take into account ecological factors rather than strategic choices for security or scalability. That is to say, Quorum will be largely restricted by Ethereum, and Ethereum founders never have Interest or experience to design a platform for real-world business operations.

Unlike IBM's Hyperledger, the Quorum blockchain is much simpler, but it still faces complex issues when building a framework for confidential transactions. Now, several key developers at Quorum have left the team to pursue new blockchain projects, and it remains to be seen whether those customers using Quorum will receive stronger support.

Perhaps the biggest risk for Quorum is that it is managed by a large bank rather than a specialized technology company. For JPMorgan Chase, Quorum will always be a product, not its core business. In the long run, we expect the bank to spend time strategically looking for a mature blockchain platform for its workflow. But we also want to praise JPMorgan’s selfless management of Quorum. The bank has proven the potential of the blockchain and has established key partners that have been successfully deployed and used.

JP Morgan Co., Ltd. is developing a stable currency (JPM Coin)

We can think that the Juno payment pilot project is an early version of JPM Coin, which was a stable currency project officially announced by JP Morgan Chase earlier this year. JPM Coin tries to solve two problems in the financial market:

  1. Expensive and inefficient settlement process;
  2. The volatility of the cryptocurrency;

The way JPM Coin achieves its goals is impressive and unobtrusive.

In order to resolve the volatility of the cryptocurrency, the stable currency can be anchored with the underlying asset and redeemed at a fixed price. For example, JPM Coin is a stable currency linked to the US dollar, which can be exchanged for one dollar from JPMorgan's bank account with one unit of JPM Coin. However, stabilizing currencies also has shortcomings: stable currencies are stable only with sufficient asset reserves. Just as George Soros had successfully defeated the Bank of England, it was possible to break the anchorage of the stable currency with enough financial firepower. In addition, when a stable currency like Tether may not have the financial reserves it claims to have, the controversy arises.

Of course, adequate financial reserves are not a problem for JP Morgan Chase.

Unlike Facebook's Libra stable currency, JPM Coin's JPM Coin is tied to a single sovereign currency, and Facebook's Libra has suffered tremendously from the impact, and JPM Coin is much less harmful. In the end, JPM Coin can be used as a token, you can use it to redeem money already in your JP Morgan account. However, today JPM Coin is mainly used to track cash to improve compliance efficiency, and there are currently not many other things to do.

When JPM Coin connects to a public blockchain network through a hybrid platform that interoperates between JP Morgan Chase's private ledger and a secure, scalable public blockchain, it becomes more influential . Through a hybrid network, the bank can benefit from the liquidity and market access of the public blockchain while ensuring privacy and security through the licensing chain.

The existence of JPM Coin has important implications for the blockchain and the financial world. Five years later, we expect every company to build its own "JPM Coin," and JPMorgan Chase has proven that it is at the forefront of blockchain implementation.

Major gains in working at the JPMorgan blockchain group

One of the biggest gains we've made in JP Morgan's career is to understand how the financial system works and what it takes to move the blockchain application forward. Facebook's Libra and Silicon Valley's arrogant "subversive finance" attempts stem from the lack of institutional knowledge of how the financial system works in the real world. To succeed in "disturbing" something, you must be disrupted. Have a deep understanding. In order to understand the requirements of a blockchain in an enterprise, we must first build a blockchain for one of the world's largest financial institutions.

While Quorum and JPM Coin face technical and business challenges, it is commendable that JPMorgan Chase is a pioneer in the enterprise blockchain space. It is understandable that the bank’s motive to enter the blockchain sector is to protect its advantages in the financial sector. Still, it is still a savvy contributor to innovation.

Many large organizations (far more than the publicly announced scale) are trying to get Ethereum to work as a line of business, but almost everyone has failed, and JPMorgan Chase has succeeded, allowing EVM to be used in any business that uses Quorum.