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>The coin will be issued on the Quorum blockchain which was developed by JP Morgan over the last year and is a private blockchain inspired by Ethereum. This mea

• dwiel 8y ago
  I tend to agree with you. I wonder though, does reframing as a crypto help them get around any rules, regulations or taxes?
  • apl002 8y ago
    i was curious about this as well
    • SideburnsOfDoom 8y ago
      No. Why would it?
      • tombert 8y ago
        I know nothing about finance law, but I know that governments typically have a "blind spot" for new technologies. Sometimes this can be a good thing, and I think it's what kind of led to the internet being such an interesting place with things like BitTorrent, but often businesses will see it as a quick loophole.
        • SideburnsOfDoom 8y ago
          I know nothing about the law for e.g. violent crime, but if you find a new murder weapon, the law would certainly not have a "blind spot" for your new technology. The law isn't a computer program, it is a human process.
  • GordonS 8y ago
    Surely if it did, regulators would move quickly to close that gap?
  • basch 8y ago
    like the gnu/linux/systemd/gnome/blink argument, this is a great example of why calling linkedlogs/dcash/proofofwork/byzantineFT/cryptokeysasidentity "crypto" kind of muddles the conversation. In JPMorgan's case, using linkedlogs/dcash/cryptokeysasidentity might end up working out really well. They can distribute the tech to other banks, and the killer feature, besides being distributed ends up being cryptokeysasidentity, from a security standpoint. In my book, what they are doing is still "crypto" but it isnt the genius innovation the whole sum of all bitcoin was. (You might argue that its the proof of work that makes something a crypto, and thats fine.) What made bitcoin different was APPLYING a bunch of academic knowledge to a useful to solve problem. https://queue.acm.org/detail.cfm?id=3136559 https://queue.acm.org/detail.cfm?id=3136559 If you look up the definition of TECHNOLOGY, its "the application of knowledge." Bitcoin is a PERFECT EXAMPLE of a technology, not because its digital, electronic, and computery, but because its taking a ton of knowledge from academia and APPLYING it. This new coin is more a reapplication of technology, than any sort of creation.
  • tylersmith 8y ago
    I don't think it's the work "crypto" that helps people skirt regulations. It's the anonymous, permisionless consensus coordination that does. JP Morgan's coin won't have that property, they're just signing off on transactions themselves.
• _bxg1 8y ago
  I don't know much about this area, but I could imagine that even if the mining is selective, the transfers might not be. It could remove some overhead that large banks have to do in verifying transactions and preventing duplicates, etc.
  • freeone3000 8y ago
    mining and transfers are the same thing. that's the core concept - the ledger transaction is the currency.
• pjc50 8y ago
  > what the blockchain does here that couldn't be implemented by any random database system It says "blockchain" on it, so it can be sold to some uniquely gullible investors?
  • reallydude 8y ago
    > what the blockchain does here that couldn't be implemented by any random database system More likely it can be used to circumvent regulations by trading digital goods and investing in futures, instead of liquid assets. Even if it is eventually regulated, the upside potential (no matter how temporary) is an upside.
• deleted 8y ago
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• talawahdotnet 8y ago
  Yea, it definitely has limited immediate value compared to a database as long as it is on a closed network. However it does allow them to experiment with the technology in a controlled fashion. They could have done so quietly but, you know, marketing. I think there is still value in Blockchain networks like Stellar[1] that are not fully decentralized, but are federated and diverse. If this is a first step towards them issuing a stable coin on a network like that then I welcome it. 1. https://www.stellar.org https://www.stellar.org
  • sparkie 8y ago
    "Stable coin" is one of those misnomers where it means exactly the opposite of what one would expect from the existing definition of those words. Something pegged to the US dollar is inherently going to be unstable, because the dollar is unstable. The dollar is not priced in terms of dollars. One dollar today might not be a dollar tomorrow. The instability is mostly due to the conditions of the market, but then those effects are compounded by the whimsical economists printing it for fun. OTOH, Bitcoin is a closed system. At any point in time, you can measure the amount of Bitcoin you have as a fraction of the total amount of Bitcoin which exists, and you can even directly predict how that will change due to inflation for the next 100+ years. I personally prefer the term "fiat coin" or just "shitcoin" is sufficient.
• darawk 8y ago
  I think it may be that the decentralized control structure makes organizations who would normally be in competition with JPMorgan more willing to be on board with using something that they developed. For instance, if you are say, Goldman Sachs, would you want to use a private database at JPMorgan for you and your clients funds? Or would you prefer to use a semi-private blockchain, where although it's not open to the public, each participant in the network has equal stature to one another? I think that is the true innovation here, and I do think that it is important. It solves some of the corporate cooperation issues that prevent certain types of value from being created, because nobody wants to let their competitor control the space.
  • koolba 8y ago
    This already exists. It’s called the DTCC and everybody uses it. https://en.m.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation https://en.m.wikipedia.org/wiki/Depository_Trust_%26_Clearin...
    • darawk 8y ago
      And that company is exactly what this tech. replaces. That company does not provide its services for free. This blockchain product does.
      • 0xffff2 8y ago
        How does this product operate for free? Who's paying for the miners?
        • darawk 8y ago
          Sorry, there may be small fees paid to the miners. But those fees will presumably be dramatically less than this current company charges.
          • deleted 8y ago
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• ConcernedCoder 8y ago
  One thing it could do would be to let each participent in a transaction verify the transaction itself... which I suppose is a nice feature, maybe everything goes into "escrow" and then is released when everyone ( the participtors in the transaction who can mine? ) can agree on the result.
• deleted 8y ago
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• treis 8y ago
  > random database system Who would own this database?
  • root_axis 8y ago
    JPMorgan
    • treis 8y ago
      Which is the problem that JPM Coin is aiming to solve. For them to use a DB solution requires both parties to the transaction to be customers of JP Morgan. A block chain issued coin doesn't require that and, therefore, has some theoretical advantage. Of course it remains to be seen how true that turns out to be. There is a DB based solution for financial transfers today in SWIFT. It has numerous flaws that a block chain based solution legitimately solves.
      • hcknwscommenter 8y ago
        I am not saying SWIFT is perfect, but please enumerate these flaws and the ways in which blockchain legitimately solves these flaws without introducing an equal number of equally problematic flaws.
        • treis 8y ago
          SWIFT transactions can be slow depending on the banks involved. If a bank's SWIFT credentials are compromised the attackers can transfer all the funds a bank controls. With a blockchain coin it would require the private key of the customer to send the coins.
          • root_axis 8y ago
            > With a blockchain coin it would require the private key of the customer to send the coins. There are no "customers", this is a private blockchain where only banks participate.
• cm2187 8y ago
  Plus if it is backed by the dollar, it is subject to the same central bank manipulation than the actual dollar.
  • notyourwork 8y ago
    Not really a con based on the use case, right?
    • cm2187 8y ago
      Then why create a currency if it isn't as a currency at all?
• djohnston 8y ago
  the moment you start using a private blockchain you miss the point of cryptocurrency. all of these enterprise coins make me laugh
  • elif 8y ago
    There are a lot of points of cryptocurrency. It's true a private chain has no protection against central control... however it does have protection against double-spends, mutable history, confirmation guarantees, etc.
    • djohnston 8y ago
      right but all of those are more performantly implemented with a cluster of mysql replicas .. the protection against double spends is only as strong as the cluster of machines doing the hashing
• Legogris 8y ago
  Given a standard for moving assets across chains, this starts to become really interesting. "What can be achieved by HTTP that can't be achieved by any random binary protocol?" Plasma could facilitate this for Ethereum-compatible chains, including Quorum.
• tlrobinson 8y ago
  You are correct that these sort of "private" and "federated" blockchains completely miss the point of Bitcoin (some intentionally, some not). The features they provide were possible before Bitcoin was invented, but no one really cared about finding uses for them until the blockchain hype train rolled through town. That doesn't mean they're completely useless though. If Bitcoin eventually inspires some real innovation in fintech, then great.
  • tylersmith 8y ago
    But the inspirations have almost entirely not come from the stuff that makes Bitcoin and "blockchains" unique. If they realized that people want an easy way to have their assets managed and traded digitally they can do it much better without blockchain baggage.
• deleted 8y ago
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• elif 8y ago
  well how many servers that you interface with financially allow you to audit all of their transactions in a mathematically verifiable way?
• grahamperich 8y ago
  What they're gaining is interoperability with public blockchains. JP Morgan's permissioned blockchain—Quorum—is essentially a fork of Ethereum. They can issue assets on their private chain (which, yes, by itself is no better than a traditional database). However, they can then transfer these assets to and from public blockchains. By doing this, they are gaining access to the greater crypto ecosystem while still maintaining centralized control when they need it. Here's a little example of how this might work in practice: 1. You hold $100k in your JPM money market account 2. You convert $25k of that to JPM's stablecoin on their Quorum chain 3. You withdraw this $25k JPM-coin to the public Ethereum blockchain 4. You use it in Ethereum's burgeoning "Decentralized Finance" or "Open Finance" protocols.. some examples: https://www.dharmalever.com https://www.dharmalever.com, https://compound.finance https://compound.finance, https://www.augur.net/ https://www.augur.net/ 5. You finish what you're doing, and transfer it back to your JPM account
  • root_axis 8y ago
    Where is the benefit? If I wanted $25k in eth, why wouldn't I just buy $25k in eth instead of adding in the extra step of a JPM stablecoin?
• tylersmith 8y ago
  It's absolutely just a buzzword. A blockchain is just a data structure which is useful in Nakamoto Consensus, which is only for censorship resistance. Everything a cryptocurrency can do be done much more efficiently, faster, cheaper, safer, better UX, etc, except for censorship resistance. If you don't want your coin/token to be censorship resistant then you can have a system that's a million times better by just building a web app that uses regular cryptography.
  • stale2002 8y ago
    Not really. If you build a web with a private, centrally controlled database, then you might be messing with the database behind the scenes. A Blockchain makes that database transparent, and makes any secret funny business immediately apparent.
  • basch 8y ago
    That black or white worldview absolutely ignores a middle ground use case for a bunch of collaborative entities that _sort of_ trust each other, are ok being non-anonymous, and want to work together on a shared ledger. Ten firms working towards a common goal can do so without an insane amount of redundant double entry accounting at each firm, they can do the work once and share the results, they can audit and verify the log. And they arent all just accessing one databased stored at one firm. Im not sure people really understand the implications of a team of companies that collaborate often banding together, and eliminating the need for 3rd party audits and 3rd party fund settlement.
    • sparkie 8y ago
      > Im not sure people really understand the implications of a team of companies that collaborate often banding together, and eliminating the need for 3rd party audits and 3rd party fund settlement. I think it is more that people don't understand what existing technologies there are already, but they've heard of this "blockchain" thing, and the black and white view is one where you either need a blockchain or you don't need anything. There are some other interesting technologies and research areas. One example is SMPC. In 2008 (pre-dating Bitcoin), a secure auction with sealed bids was conducted in Denmark for the purchase of beets from independent farmers[1]. This kind of research get drowned out by the blockchain hype because nobody is interested in something which doesn't print their own money. There are also more well understood distributed databases and consensus algorithms which work when you have semi-cooperative parties. I think a lot of these "blockchains" really just want a merkle-tree, and they could probably get by with a database like noms[2] When you have a bunch of cooperating parties, they either need to assume that the parties are cooperative, or you need an arbitration process. The arbitration process is what the blockchain is about (with the record keeping in the blockchain being a kind of toxic waste which is kept around to support that). What do you do when the parties are being uncooperative? If there are only a few parties, then PoW is not a viable solution because one party could outpace others if they have more computing power. If you pick something like Proof-of-stake, then several parties could collude to swindle others. If you have a centralized system, you've not gained anything. Ultimately, the companies involved are always going to take any quarrels to a legal court and have a human decide the outcome - meaning their blockchain is going to have to be "fixed" by manual intervention anyway. [1]:https://eprint.iacr.org/2008/068 https://eprint.iacr.org/2008/068 [2]: https://github.com/attic-labs/noms https://github.com/attic-labs/noms
• tootie 8y ago
  Institutionally-backed money laundering maybe? IDK really.
• dkoston 8y ago
  The blockchain signs each dollar. You could have done this instead by making each dollar a PGP signature and allowing trusted parties to decrypt the signature and claim the dollar. Honestly though, if the chain isn’t public, JPMC can update the code behind-the-scenes so there’s not as much trust as there would be on a public network.
• bouncycastle 8y ago
  > I genuinely don't understand what the blockchain does here that couldn't be implemented by any random database system. A blockchain is...well... a database system itself! There are many different types of database systems, eg. Relational, Graph, Object orientated, document (eg elastic search) and so on. Generally you want to pick one that fits your problem area well, so picking a random database system would not be a good idea. One of the most important data structures they need is a tree for the Merkle proofs to confirm that the data hasn't been tampered and contract execution happened correctly. Tree structures are notoriously difficult to implement in a relational db for example. (BTW, I'm also skeptical of the hype around 'blockchain' just as before when the 'noSQL' hype came around. You will surely have some devs pick the blockchain as their database system for the wrong reasons, just like back in the day when you had devs pick noSQL because it was cool.)
  • cachvico 8y ago
    Why is a Merkle proof difficult to implement in a relational DB? The only required data fields in each row are the parent row ID and a hash, no?
• mirekrusin 8y ago
  It's the other way around, actually. Having small set of authorities that reach consensus via raft/pbft in case of quorum means that ethereum blockchain can be much faster. You still have full transparency of what's happening, you have access to the chain, you can read it, validate it, etc. They just run minting of blocks for you. It's true that if they don't like you, they can refuse to include transactions from you for example - that's the main cons from public consensus like PoW. But they are not worried about it, of course and other participants are usually not worried as well because they know that whoever controls minting nodes have strong incentives to run it fair (otherwise participants would not give a shit to join it). This is different from public chains where those rules don't exist. In big corps integration and security is a massive problem. Blockchain reduces those two problems by orders of magnitude. If you wanted to "implement it by any random database system" - you'd end up with something like ethereum. You can't just spawn your public postgres and publish public api to create new users, can you? Quorum has also some other extensions to ethereum related to privacy (private contracts, anonymity etc) that are attractive to corporations. It's nice to see them open sourcing quorum and publishing something real-world based on it.
• deevolution 8y ago
  I also fail to see the point of this... maybe to prove once and for all that blockchain doesnt make any sense as an institutional/private service?
• smsm42 8y ago
  My thoughts exactly. Isn't this: > make near-instantaneous transactions of value across the internet the definition of what wire transfer does? And why not doing it in "fiat money" (it's an additional level of hilarity for a major bank to use this term, for those who understands) has any value? The value of blockchain transfers is lack of intermediaries and gatekeepers - which advantage the private chain owned by JP Morgan takes away. This is like advertising "we sell gold coins, only instead of hassle of owning heavy metal pieces, we provide you with little pieces of green paper that could be exchanges for gold coins at any gold dealer" - totally missing the point of the whole exercise.