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Before: - you want to transfer $100,000 to another bank - you do a wire or ACH - that’s risky so someone has to verify that you actually have $100,000 After
by dkoston 8y ago
Before:
- you want to transfer $100,000 to another bank
- you do a wire or ACH
- that’s risky so someone has to verify that you actually have $100,000
After:
- each of your dollars are digitally signed using cryptography
- to transfer them, you share the hashes
- the recipient validates the digital signatures to verify those $100,000 in tokens are legit
It’s all about a system of accounting to reduce risk. With less risk, transfers are faster. Think of it like an api to verify account balances that can only be hacked if the SSL cert for the API is hacked by figuring out the private key
- arcticfox 8y agoThanks, this is super clear. But what prevents a double spend in this situation? I assume at some point the new owner commits the hashes to a blockchain under their own key.
- dkoston 8y agoJPMC will have to track the redemptions on a blockchain ir database to prevent double spend. As mentioned above, this is an internal efficiency system for JPMC, it doesn’t provide any consumer benefits unless they pass on the reduced costs
- lordnacho 8y agoIf you lose your private key, you lose your JPM dollars. How many people want to have $100K in notes? Because that's similar and a lot harder to lose than something stored on a computer. Or, if you send the £100K to a valid address that nonetheless is the wrong one. Money in a black hole. If you screwed up the note to send $100K via ACH, something could still be done about it.
- dkoston 8y agoNope. JPMC doesn’t give you actual token access. This system doesn’t work like public crypto. It’s all behind the scenes. As such, it’s mostly marketing hype and adds value only for JPMC, not the consumer
- treis 8y agoNone of the problems you cite are inherent to blockchains. They can have mechanisms to reissue coins for lost keys or undo erroneous payments.