J.P. Morgan Chase & Co. has unveiled its attempts to create a private blockchain-based transactions platform based on the code behind the Ethereum network. The platform called Quorum will enable the multinational banking company located in New York to use a publicly available system for confidential transactions. This includes the ability to provide access to transactions across a network to only those people who need to know the details of the actual transaction, such as those involved in the transaction itself, or even regulators.
“We have people building the most stress-tested financial systems in the world,” program lead for J.P. Morgan Quorum Project Lead Amber Baldet told The Wall Street Journal. “Bringing that enterprise expertise [to blockchain] is one of our strengths.”
There are a number of intractable problems that J.P. Morgan is planning to solve with a help of the Quorum platform. The bank is going to replace its current disparate range of databases with one single record of all their transactions, that would also, in theory improve settlement times and system maintenance.
The Quorum platform of J.P. Morgan is reported to be in the development stage currently. It will be polished up based on the feedback of participants and industry stakeholders as it continues to be built and tested.
The fact that J.P. Morgan has chosen to develop its own platform using the code behind the Ethereum network demonstrates the trust in the system, even despite the recent hack of the Ethereum DAO. As a reminder, in June the decentralized autonomous organization (DAO), built around the virtual currency, suffered a huge hacker attack, losing over 3.5 million of ether.
Hackers exploited the vulnerability in the DAO software. According to estimates, the organization lost about 5% of all the digital currency available.
DAO, built on the Ethereum blockchain, was launched by entrepreneur Vitalik Buterin this March. It is an automated investment fund that allows its members to finance ethereum projects. In May, the organization has raised more than $150 million in ether, what significantly exceeded the founders’ expectations.
Although bitcoin and blockchain remain to be under the spotlight of multiple financial companies all over the world, the code behind Ethereum itself is growing in popularity with even the likes of Microsoft Corp. now offering it as a service.
Ethereum code allows developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) reliably and without the need for a middle man.