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- by Elli SAJKO
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The Takeaway
- JPMorgan’s technology teams spread across three continents have been busy updating the bank’s Quorum blockchain platform over the past six months, replacing key parts of its privacy-enhancing components.
- Like JPMorgan’s recently announced partnership with Microsoft Azure, the updates were meant to make Quorum usable by a larger universe of firms.
- According to JPMorgan Quorum lead Oli Harris, the Microsoft partnership is also a potential stepping stone to a long-contemplated spin-out of the open source software project.
- Harris also talked about some possible applications of the bank’s prototype cryptocurrency, JPM Coin, in an interview with CoinDesk.
Specifically, the team replaced Constellation, Quorum’s privacy layer written in the Haskell computer language, with Tessera, which has a similar design, but is built in Java to make it easier for businesses to use and deploy.
This nitty-gritty effort was happening behind the scenes while the bank was out grabbing headlines with JPM Coin. But the work on Quorum’s privacy architecture is arguably as important as that internal prototype of a private cryptocurrency for clients.
For, like JPMorgan’s partnership with the Microsoft Azure Blockchain service announced last week, the reboot was designed to make Quorum usable by a larger universe of firms.
And that broadening of the platform’s appeal, in turn, is helping to get Quorum ready for a possible life beyond the bank, which has been considering a spin-off of the project since early 2018.Referring specifically to the Microsoft tie-up, Harris told CoinDesk:“I would think of this as a stepping stone to a potential spin-out.”
“It’s open source software, available on Github and maintained by JPMorgan on behalf of everyone using Quorum,” Harris went on to explain. “The more users of Quorum, the better it is for everyone, because we can help with standardization and creating even more robust tech suite.”Heavy lifting
Stepping back, Quorum was launched in early 2017, whereby the tech created an instant frisson of excitement by officially connecting the bank with ethereum (albeit a private version) and also adding an ambitious dose of blockchain privacy via zero-knowledge proofs (ZKPs).
Following blockchain program lead Amber Baldet’s departure from the bank in April 2018, there was a brief period when Quorum’s future looked uncertain. A victim of its own success to some degree, questions arose over how the bank was going to carry out its new and unplanned role as maintainer of a growing open source project running nascent technology.
While Harris and two other sources at JPMorgan said the bank continues to mull a spin-out, it seems these concerns are now being addressed regardless.
In addition to “all the go-to-market support, which is about getting new customers using Quorum” that JPMorgan and Microsoft are working on together, Harris said the two firms’ engineers are now collaborating, streamlining node deployment and abstracting away raw complexity.
This is being done “so that companies like JPMorgan can actually focus on the business applications and unlocking value from the technology, whereas Quorum powered by Microsoft will be dealing with a lot of the heavy lifting,” he said.
Further to that end, Harris said that in the same way a user can currently pick and choose which consensus mechanism to deploy with Quorum (Istanbul, Raft etc), an easy to apply, modular “menu” of privacy solutions will be available.
As such, JPMorgan is looking at a wide range of privacy tech with different use cases in mind, noted Harris, mentioning the likes of ZKP specialists U.K.-based Aztec, which uses a more efficient variety of zero-knowledge proofs called range proofs and has a focus on bridging the gap between public and private blockchains.JPM Coin and beyond
A number of interesting projects are running on Quorum today, such as energy commodity trading platform Vakt; trade finance blockchain Komgo; and the super-cool provenance tracking system Aurafor luxury brand conglomerate LVMH.
However, the news of late has all been about stuff inside the bank. Foremost among them is JPM Coin, which is essentially tokenized cash on the Quorum ledger.
In addition to that, JPMorgan has also attracted some 220 banks to join its Interbank Information Network, which also uses Quorum to eradicate pain points in the way information circulates within foreign correspondent banking. An obvious question concerns potential cross-pollination between the bank’s internal projects and other applications on Quorum.
For example, where and when might JPM Coin begin to settle the cash part of securities transactions, or potentially be used for interbank payments and so on. Harris, a former Accenture consultant who previously ran JPMorgan’s fintech and InResidence incubator program, said part of his job is “to look at this whole ecosystem holistically” and identify where projects within the bank that run on Quorum can intermingle.
“If you think through JPM Coin as the ability to tokenize fiat currency, with the support and all the discipline and rigor and legal and compliance behind one of the world’s largest banks, I think you can see us using JPM Coin in certain use cases,” he said.
Harris pointed to Dromaius, a debt issuance platform on Quorum, launched by Christine Moy, head of JPMorgan’s Blockchain Centre of Excellence at Consensus last year.“I think Dromaius is a good one,” said Harris.
“So if you are doing delivery versus payment, ie you issue the debt on the blockchain and then you also exchange the cash on the same chain, then you are just getting further benefits of the blockchain technology, because you can actually do things on the same chain, and you don’t need to settle the asset in the traditional rails.
”The same applies where you can exchange one currency for another simultaneously on the same chain, said Harris, “or anywhere you need to have tokenized fiat, like a dollar on the blockchain.”Ahead in the cloud
The combination of blockchain and cloud computing, known as blockchain-as-a-service (BaaS), has become a competitive space, with Amazon Web Service recently announcing its Managed Blockchain service, IBM pushing its Bluemix cloud platform alongside its Hyperledger Fabric blockchain.
Harris said Quorum will naturally be multi-cloud, meaning not Azure-exclusive, though obviously the expectation is Quorum customers will opt for Azure given all the integration work that’s been done. Still, the tech can be supported on-premises in banks as well as on every public cloud provider and in hybrid situations.Indeed, he said cloud computing provides a good analogy with blockchain.
The way cloud in general is playing out, is how Harris envisages the evolution of permissioned ledgers versus public blockchains and interoperability between them.His prediction is that “mesh of blockchains” will co-exist together for different use cases and companies will then be able to decide what they want to use for the specific problem they are trying to solve.
“I don’t feel it’s going to be a binary outcome where we are just waiting for people to solve certain technical issues, whether that’s performance in public ethereum, and then everyone is going to move over to the public space.
”In the meantime, being a pillar of enterprise ethereum comes with some responsibility to help in establishing standards, specifications and interoperability further down the road.
This is shown in Quorum’s commitment to the Enterprise Ethereum Alliance and, in a recent example, the Microsoft-led token taxonomy initiative, Harris pointed out.
He concluded:“This is all about network effects. We see Quorum as this evolving technology suite and are extremely lucky to have one leg in public ethereum and also one leg in large enterprises, now powered by JPMorgan and Microsoft in a coherent way.”
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Francisco Gimeno - BC Analyst JPMorgan is really trying to adapt. Apart from what this means for a future decentralised digital economy, Quorum seems be a powerful an open source, permissioned fork of Ethereum. Critics will say that of course everything is about control, power and money (well, they are bankers...). Weird times. But if other banks and institutions get into Quorum it will be a success for JPMorgan. It is also a success for Ethereum.- 10 1 vote
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Binance CEO talks about the serious security breach and hack of $40 million that happened over the last 24 hours. This is a very insightful and transparent report from CZ everyone can learn from. Withdrawals and Deposits will be put on hold for a few days according to the CEO of Binance to allow them ample time to assess and rectify any security breaches.
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Francisco Gimeno - BC Analyst Binance CEO has to be grateful to his PR Team on the way they have been dealing with Binance's hack and its repercussions. Since last week they have been fighting the storm smoothly by opening themselves to scrutiny and being transparent enough. Surely SEC and other regulatory authorities will be soon over them, but now all big crypto exchanges will be taking safety/security issues more seriously.
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The idea of rolling back the clock on cryptocurrency transactions to reverse a situation people are unhappy with is highly contentious. As such, many were shocked to hear that a number of major players in the industry had even discussed a rollback of BTC following an alleged exchange hack.
Also Read: Keys4coins Lets You Buy Video Game Licenses With Bitcoin CashCZ Admits to Considering BTC Reorg
The CEO of Binance, Changpeng Zhao, has revealed that he spoke with several people about pursuing a re-organization of the Bitcoin Core blockchain. One of those was Bitmain’s Jihan Wu, who CZ said educated him on why he cannot do this to BTC.
The primary reason CZ cited in favor of such an action would be to take revenge against hackers.
Binance announced it suffered a major security breach on May 7, where hackers reportedly used a variety of attacking techniques, including phishing and viruses, to steal 7,000 BTC (worth over $40 million) with just one transaction.
1,129 people are talking about this
CZ Binance✔@cz_binanceAfter speaking with various parties, including @JeremyRubin, @_prestwich, @bcmakes, @hasufl, @JihanWu and others, we decided NOT to pursue the re-org approach. Considerations being:2,15710:29 PM - May 7, 2019Twitter Ads info and privacyProposal Provokes Negative Response Across the Board
This revelation caused a firestorm of comments, with reactions ranging from confusion to anger. Notable figures were shocked that the CEO of the most popular cryptocurrency exchange would consider such an approach, while others mocked him for even thinking that he had the power to make such a thing happen.
CZ will not have been surprised by these negative reactions, as he mentioned that the possible downsides of a re-org would be to damage the credibility of BTC and cause a split in both the network and community.
Needless to say, had this rollback of BTC successfully taken place, it would have played into fears that what is supposed to be a decentralized system of immutable transactions is actually controlled by a handful of powerful people.
The impact on the wider community, which has handled far greater crises than a $40 million hack over the years, would probably have been more devastating than the split of the Ethereum community with the creation of ETC under similar conditions, following the DAO hack.
Saj le Great @sajmathieu · 15hReplying to @cz_binance and 6 othersI thought you just were smarter and peeps shouldnt had to educate you, much deception wow
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Saj le Great @sajmathieu
This is #bitcoin not #shitcoin, we just dont reorg for personal conveniance or whatever, accept that loss, stop trying PR damage control, or whatever you trying to do, next time spend more time to improve your bitcoin's wallet security and not listing every single shitcoins #rekt
321:09 AM - May 8, 2019Twitter Ads info and privacy
For now it seems that the only casualty has been CZ, who has taken a hit to his credibility for suggesting a reorg, which may prove much more damaging to Binance in the long run than the stolen funds that were but a fraction of its massive holdings.Larry Cermak@lawmaster · 17h
All I'm gonna say is that this Binance hack is resulting in so many horrible takes from people who are usually rational. Bottom line is that Binance got inevitably hacked, it was always going to happen. CZ communicated it pretty well apart from tweeting "FUNDS ARE SAFU" before
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Larry Cermak@lawmaster
What's important though is that the reorg was never gonna happen. It made no sense from the beginning and has been discussed for years. So I really don't understand everyone who is now celebrating his decision to not do it. It was a calculated business move - that's it.
5111:26 PM - May 7, 2019Twitter Ads info and privacy
What do you think about CZ considering a rollback of BTC as a possibility? Share your thoughts in the comments section below.-
Francisco Gimeno - BC Analyst Truly Binance's hack has raised a very ugly head: the so called BTC Reorg. If this would have been done, or even considered possible by a majority of people, this would have been very bad for BTC immutability and for the whole industry. The storm at Twitter and Reddit is yet not over this. What do you think?
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In this episode of Capgemini Invent Talks, we zoom in on the challenges and opportunities of Blockchain for Supply Chain Management. Cryptocurrencies scaled up quickly – but why does Blockchain in SCM still lack success? Daniel Künstner and Ralph Schneider Maul from Capgemini Invent outline challenges and opportunities of Blockchain within Supply Chain Management.
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Francisco Gimeno - BC Analyst The blockchain use cases are mostly yet on the potentiality side, and not in reality. When talking about Supply Chain Management, one of the most clear cases for use of this tech, but there are yet many challenges as solutions based on it need to cope with many actors, steps, confirmations, etc, and the blockchain is yet maturing. We strongly expect the blockchain to be integrated in this sector and many more, but everything is in trial by now.
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Ethereum lead the way in the cryptocurrency market on Monday afternoon, coinciding with the slightest of rumours regarding an ETH futures contract.Cryptocurrency media reported the words of an unidentified U.S.
Commodity Futures Trading Commission (CFTC) official, who suggested an Ether futures contract would be welcomed by regulators.Regulated Ethereum Futures
According to reports, the CFTC is quite open to the idea of an Ethereum futures contract falling under their regulatory control. The unnamed official is quoted as saying:
“I think we can get comfortable with an ether derivative being under our jurisdiction.
”The source did note that the CFTC can only adjudicate on proposals that are actually placed in front of it. Nothing has been proposed to them as of yet. The official continued:
“We don’t do bold pronouncements, what we do is we look at applications before us. A derivatives exchange comes to us and says ‘we want to launch this particular product.’ … If they came to us with a particular derivative that met our requirements, I think that there’s a good chance that it would be self-certified by us.
”To date, the CFTC has sanctioned two Bitcoin futures markets by CME Group, and the CBOE Global Exchange.Those futures markets were announced on December 1st, 2017, and were set to launch on the 18th of the same month.
From the 1st to the 17th of December, the value of Bitcoin doubled from $10,000 to $20,000. Then, when the markets finally opened, the price of Bitcoin tanked.Ethereum Price – ETH/USD
On Monday the value of Ethereum was trading at $159 before the futures speculation broke. Over the course of the next eight hours the price climbed to a peak of $175.75, marking 9.8% growth on the day.
That was accompanied by an influx of $1.5 billion worth of new trades according to CoinMarketCap. The data aggregator places ETH daily volume at $7.2 billion – up from $5.7 billion earlier in the day.Of course, Ethereum is one of the most traded coins in existence, and not all of its 400 trading pairs come from legitimate sources.
More conservative estimates on OpenMarketCap place real ETH trade volume at closer to $300 million.Good Will Bump for ERC20 Tokens
Ethereum briefly led the way in the market cap top hundred, before it was caught up by its own progeny ERC20 tokens. The next six best market performers on Monday were all ETH-based projects; Loopring, Loom Network, iExec RLC, Qubitica, Chainlink and Nexo.
The sheer number of ETH-only token exchanges makes this a common occurrence during Ethereum pumps. Decentralized exchanges which don’t require KYC or AML make it easy to swap ETH for most other ERC20 tokens.
Thus profits on Ethereum are often used to scoop up more small-cap tokens on the fly.The impact of an Ethereum futures market is unlikely to have to the same earth-shaking effect as its Bitcoin predecessor.
However, if the same pattern does play itself out, then the dump that accompanies the pump would make itself felt on all of those ERC20 pairs.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.-
Francisco Gimeno - BC Analyst Volatility again just on rumours... the crypto market is trying (and not quite getting it) to be bullish. Movements are based more on the feelings and rumours in the market than proper market signs, as witnessed by these news. This said, we are hopeful and optimistic on the long term. Meanwhile, as usual, be careful, do your homework, and don't invest what you can't afford to loose.
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This week, a blockchain bandit exploits weak private keys to loot millions, Samsung allegedly develops its own coin, Softbank’s founder loses $130 million in crypto and for McAfee it’s not the right time to reveal Satoshi’s identity.
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Francisco Gimeno - BC Analyst The Hodler's Digest is becoming a must to see. This time we learn a lot more on why we need more regulations in the crypto sphere, and more safety and security in the technology to allow for mass adoption, plus how investment in crypto continues unabated even though
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