JP Morgan Unveils USD-Backed Cryptocurrency for B2B Payments

&gt;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 means only selected miners will be able to process transactions, unlike public cryptocurrencies where anyone can.<p>[...]<p>&gt;The purpose of the JPM Coin is to allow businesses to make near-instantaneous transactions of value across the internet without having to move fiat money in the background.<p>I genuinely don&#x27;t understand what the blockchain does here that couldn&#x27;t be implemented by any random database system. I mean the euros that I have in my bank account are also just a number that could be moved &quot;across the internet&quot; instantly if they so desired.<p>The big innovation with Bitcoin-like blockchains is that transactions can be done trustlessly but the whole &quot;private blockchain with accredited miners&quot; turns it into basically a slow inefficient database with extra steps.<p>Is it just a buzzword to generate interest or is there an aspect of this I&#x27;m missing?

It&#x27;s pretty well known that these BigCorp crypto&#x2F;blockchain plays are just smoke and mirrors. There is no actual differential value gained here (unless as @dwiel says,they get some sort of loophole crypto tax break). It&#x27;s a bit saddening to see that the tech has been picked up by the <i>exact institution(s)</i> that the tech was meant to combat. But if anything that just proves that there&#x27;s meaning behind the concept (regardless of a f&#x27;ing coin price).<p>I look forward to the day where the JPM&#x27;s and the like are put out of business for this sort of thing due superior, user-friendly technology.

I’m going to try to distill this down to it’s easiest form.<p>- JPMC will now create a digital signature (token) for every dollar that enters its network.<p>- Those digital signatures can be exchanged by any trusted authority<p>- JPMC will exchange a single dollar to those trusted authorities for a single digital signature<p>Using the blockchain allows JPMC to trust each dollar that goes through both their network and partner networks as they cryptographically trust that forgery is almost impossible. They also can trust that when a “wire” comes in that the funds are actually available.<p>This is purely an accounting system backed by cryptography that allows much more trust.

This is pointless. The gatekeeper to the private network <i>is</i> a centralized authority.

I predict this will be abandoned (or the blockchain figleaf dropped in favor of an explicitly centralized and far simpler&#x2F;cheaper store) in 2, maybe 3 years.<p>Or about as long as it takes for the fundamentally unsolvable problems of decentralized governance to become pathological to group integrity. If you are a junior stakeholder in this nominally decentralized system you eventually have to accept that you have no influence over the direction of the protocol&#x27;s development, or get together with a group of similarly disadvantaged peers and fork your own implementation where your relative influence is more comparable.<p>Until <i>that</i> consortium, too, falls apart due to leverage-seeking behavior by individuals within it, or ossifies into a de facto centralized network, but one saddled with a bunch of expensive and now superfluous blockchain game-theory casino infrastructure.

Ignoring the lack of positives, can JP Morgan reverse erroneous transactions on this? This is an important part of the financial system. Are they just going to hard fork all the time? Send the money back?

If I am reading this right (and I am a newb at e currencies), JP coin is basically a payment processor, where balance is kept on blockchain.<p>The coin value itself is linked with almost no flux to USD.<p>But then, I do not see how it is different than<p><a href="https:&#x2F;&#x2F;www.bitrail.io&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.bitrail.io&#x2F;</a> (and its new freedom coin: <a href="https:&#x2F;&#x2F;freedomcoin.cc&#x2F;#more" rel="nofollow">https:&#x2F;&#x2F;freedomcoin.cc&#x2F;#more</a> )<p>or<p>tether with 2bln market cap <a href="https:&#x2F;&#x2F;coinmarketcap.com&#x2F;currencies&#x2F;tether&#x2F;" rel="nofollow">https:&#x2F;&#x2F;coinmarketcap.com&#x2F;currencies&#x2F;tether&#x2F;</a><p>what makes JP&#x27;s offer more useful to B2B transactions than the above two examples ?

Wasn&#x27;t Jamie Dimon (JP Morgan CEO) a vocal skeptic of bitcoin and crytocurrencies a year ago?<p><a href="https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2017-09-12&#x2F;jpmorgan-s-ceo-says-he-d-fire-traders-who-bet-on-fraud-bitcoin" rel="nofollow">https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2017-09-12&#x2F;jpmorgan-...</a>

Wasn&#x27;t their CEO the one most proponent critic of cryptocurrencies.

Can someone provide a before and after example on how this technology saves money, reduces transaction failure risk or time taken for transaction to occur (either or all of these)?

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Another point I want to make that I think a lot of people on HN miss is that you cannot do this with a database alone.<p>This is the equivalent of a token table where the token is a cryptographic hash. However, it’s the cryptography that you are trusting, not the database.<p>The simple analogy is that you are using PGP to sign a message where the contents are a dollar. Only the person who can decrypt that message gets the dollar so you only give the hash to the person you want to have the dollar.<p>If there are actually dollars involved, this is a real thing.

I&#x27;m sure the governance and reasoning seem <i>just fine</i> right now but are we to trust being locked in to JP Morgan forever? It&#x27;s certainly the same way I feel about Google AMP polluting the web.<p>Seems very buzzword friendly but I really cannot see why transfers (B2B) aren&#x27;t perfectly trivial and should be instant, free and totally secure and at the tick rate of the market if in a different FX. What is stopping the banks doing this now with just normal encryption?

Does this in any way address the issue of coin theft &#x2F; key loss?<p>For instance, can I keep these coins on deposit with JPM, grant them access to my keys, conduct all the transactions through JPM&#x27;s more traditional security infrastructure, and be assured JPM will make me whole if something bad happens I did not authorize, with a transparent and fair arbitration methodology.<p>Or does this invalidate the whole purpose of crypto-coin?

This is Hawala but controlled by one entity. Where is the value and why does it need to be done in tokens controlled by JPM?

The thing that bothers me about this is that banks have a monopoly on this type of business. Outside of being a bank you need to register as a money service business which is extremely cumbersome.

So basically a B2B Venmo on a blockchain?

Nice, they are in control , so they can generate money out of air.

I&#x27;m not sure why they would use the USD as the backing for such a thing over say Gold&#x2F;Silver, etc. Say 1oz gold at X level purity for every coin. Bringing back the Fort Knox currency backing would imho be much stronger than any fiat currency.

A lot of people are missing the point and arguing past each other here.<p>Bitcoin and the like couple two distinct things:<p>1. A distributed ledger of transactions with no single point of failure that can cryptographically prove possession of the currency itself.<p>2. An anarchic monetary system that serves the needs of illicit commerce and inspires the imaginations of libertarians and erstwhile goldbugs.<p>JPM has decoupled these two aspects. And I think it’s an interesting move. Most people either love or hate cryptocurrency because of the second aspect, but the first may very well still be a good technical solution to the problem of electronically shifting money around—even if you’re just shifting around USD.

pointy haired boss who read a couple forbes articles about blockchain succeeds in missing the entire point

Tether 2.0? :3

Is that stable coin?

E Corp!

Repeat after me: A blockchain without decentralization is just a database.