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JP Morgan Chase, the largest long-term bank in the United States, shocked the financial community Thursday by launching its own blockchain product. In the context of this article, JPM Coin will not be qualified as "cryptocurrency". Jamie Dimon, CEO of JPM, is a frequent target of mockery in the crypto community, because of his declared negativity towards Bitcoin and crypto markets.
Dimon has often stated that, even if he was not a fan of Bitcoin, he felt blockchain could be a boon to finance. Despite his many tirades, JP Morgan has been in the world of cryptography for years. He is supposed to handle Bitcoin transactions while Dimon goes on television to decry Bitcoin as a "fraud".
JPM Coin highlights the definition of "cryptocurrency"
Cryptocurrency has many definitions around the world.
Everipedia defines it as "a digital badet designed to function as a means of exchange using cryptography to secure transactions, control the creation of additional units and verify the transfer of badets." Note, nothing in the basic definition regarding mining. Tokens, apparently even tokens with reversible transactions, could be crypto-currencies.
But perhaps this definition does not do justice to the nature and spirit of cryptocurrency. Let's look at the properties of Bitcoin versus the US dollar. Bitcoin is supposed to be digital money, as shown in the white paper. Transactions can not be "fetched" in the base protocol, as is the case with bank accounts and credit cards (which is the basis of most fraud). The nature of "money" is that whoever holds it basically owns it. It's really no different with FIAT, except that you sometimes need lawyers to insure ownership. The bank can steal or lose your funds. In Bitcoin, as long as you keep your keys, you own your money. You "become your own bank".
Two other aspects of the Bitcoin definition are also important. Bitcoin is decentralized, which means that there is no central checkpoint. Instead of a complex command structure made up of account representatives and intermediaries, Bitcoin applies a set of rules called consensus. If a transaction follows these rules, it is included in the blockchain, which contains a record of Bitcoin transactions at its center.
Censorship-Resistance and Immutability Define Cryptocurrency
Which brings us to one of the most important aspects of Bitcoin from the beginning: he resists censorship. For the needs of the modern bank, a crypto-token that transmits it is actually impossible. "Censorship", as applied to money, partly means that it meets money laundering requirements and political requirements. For example, it is illegal for Americans to do most types of business with Iranians. It is technically illegal to send money to Iranians through Bitcoin, but it is quite possible. It is not easy at all to send a bank transfer to Iran, which partly explains why they created their own cryptocurrency network.
The question is, what defines a cryptocurrency? Is it just the use of cryptographic protocols to secure transactions, or is it the properties mentioned above that make Bitcoin, well, Bitcoin?
The author is too long in this game to chew his words. If your token does not have the above properties – immutable, like money, and resistant to the world's little despots – then it's not a cryptocurrency. Point-blank.
The use of cryptography does not make cryptocurrency. Cryptography is everywhere. You have already used a form of cryptography today if you examined virtually anything online. You use it when looking at this site. Cryptocurrency is a type of digital badet. There are other types of digital badets, such as bank coins and utility tokens. JPM Coin is not a cryptocurrency. JPM Coin is a bank coin.
Where was the ripple in this?
The first thought of the author when reading the news of JPM Coin was obvious: why did not they use Ripple? All that JPM Coin intends to do, Ripple has already done. Why reinvent the wheel?
The fact that the biggest bank in the richest country chose to create their own token instead of using Ripple is a scary reality for Ripple. Just like any software product, nothing they do is immune to replication or spoofing.
If Ripple Labs had any meaning, they would have had an office set up outside each JP Morgan headquarters and would have been in every possible crevice of the bank's organization. They would have worked day and night to become JP Morgan's choice. Because the dirty secret is that if JP Morgan can do it, the same goes for the nearest bank, and so on. They can do it without you, Ripple, and you'll become the insignificant bank of banks that can not afford to do the same thing.
Or, another possibility presents itself. Rippling becomes the obvious way for JPM Coin to find its way outside of JP Morgan. But Ripple is far from the only player in this friendly space for banks. Several years have pbaded in 2017, and R3 is actively working to help major institutions develop their own blockchain solutions.
Take a walk, Ben Walsh
No, Barron's writer, Ben Walsh. No no no.
JP Morgan has not been content with "killing Bitcoin's dream".
Are you serious right now? You write:
The launch of JPMorgan's parts also speaks volumes about the general state of technology in today's economy. Tech's promise is no longer replacing intermediaries. These are the intermediaries who use technology to consolidate their profitable position.
JP Morgan has created a debt recognition for its own clients. Your point of view completely ignores the fact that, if they did not do anything at all, it would have had the same effect on Bitcoin. (No effect!)
Specifically, as we've reported here at NCC, where we're experts in the field, as opposed to anti-crypto-minded tourists, JP Morgan is helping its customers discover Bitcoin and other crypto- currencies.
So, what are you really? JP Morgan decided to use the blockchain to more effectively transfer billions of dollars between customers. They created a token to do this, which is basically a necessity to use a blockchain.
As you said yourself, the "room" is not meant for ordinary people. It's really not for people. Thus, its net effect on the health and well-being of the crypto-economy is actually nothing.
Offices of JP Morgan, circa 2119. // (cc) montageninja
You too, Jamie Dimon
We're not even mad at you, Jamie. We just think you're an badhole. You have done everything to denounce the "fraud" of cryptocurrency while your company is actively engaged in the trading of its future. In some cases, you have probably opened a dispute in this regard. As you know, the SEC has for a long time taken seriously the public statements of well-placed people and their effects on the markets.
So, you want to get into the game of the blockchain. As illustrated above, at least two big players are waiting to hear from you. Why should your customers trust you to make blockchain instead of someone like Ripple or R3? Your business is probably not prepared to do it properly.
If all is well, now that you have launched your little token, you will talk a little bit about it. We are here to stay, if you do not notice, not a pbading fad. Long after your death and your business has finally been supplanted by a technologically superior alternative, blockchains will be used in many aspects of everyday life.
Personally, the author thinks that the movement will derive from a world change. An aspect like the fair distribution of water or public responsibility will be what will make the blockchain so ubiquitous that society can not imagine going back.
But you, Jamie Morgan, you're not a person in this world that the blockchain builds. You are the target of the disturbance and you know it too well. Preferably, for you, the world of finance should remain the obscure and opaque clutter that leads to a systematic global collapse. Whether you know it or not, your world started at Block 0 of the Bitcoin blockchain. Give him time and, please, take a seat.
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