page contents Why JP Morgan’s Blockchain Patent Application Is Not That Surprising – The News Headline

Why JP Morgan’s Blockchain Patent Application Is Not That Surprising

JP Morgan as soon as once more led to a little of an upheaval inside cryptocurrency circles closing week – this time with the e-newsletter in their peer-to-peer (P2P) bills community patent utility in accordance with disbursed ledger generation, like blockchain.

Some crypto fanatics branded the transfer as “hypocrisy to the extraordinary.” The complaint isn’t unfounded however possibly now not correct. The financial institution, and to a better extent, their outspoken CEO, Jamie Dimon, has been answerable for a large number of concern, uncertainty and doubt surrounding Bitcoin and cryptocurrencies as an entire.

“Bitcoin is a fraud”

The Jamie Dimon/JP Morgan saga of 2017 continues to be recent within the minds of crypto fanatics. It began with Dimon’s now-infamous phrases calling Bitcoin a “fraud” in September 2017. In a while after that, in a reasonably complicated transfer, JP Morgan bought a piece of Bitcoin.

Much more complicated used to be the truth that not up to per week later, Jamie Dimon lashed out towards Bitcoin, declaring that governments would quickly ban it. In the similar breath, he fired pictures on the trade as an entire, announcing cryptocurrencies are “value not anything”. Lower than a month later he referred to as Bitcoin buyers “silly”, including that they “can pay the fee for it at some point”.

On the other hand, JP Morgan’s methods didn’t all the time appear to line up with the critiques in their CEO, as in Nov. 2017 the financial institution introduced that they deliberate to industry Bitcoin futures at the Chicago Mercantile Trade (CME). In December 2017, a strategist on the financial institution had long past as far as to mention that regulated futures markets give Bitcoin legitimacy.

By way of January 2018, Jamie Dimon himself had achieved a whole 180 on his “Bitcoin-is-a-fraud” feedback and mentioned he regretted making it. All this took place inside the area of 4 months and cemented JP Morgan’s perceived popularity – and Dimon’s non-public popularity – as without equal Bitcoin and cryptocurrency “villain”. 

Grievance used to be by no means classified towards blockchain

Whilst their skepticism surrounding Bitcoin and cryptocurrencies is obvious, JP Morgan, and Jamie Dimon, by no means expressed any animosity in opposition to blockchain’s legitimacy. In truth, JP Morgan is among the underlying generation’s earliest supporters and testers.

Way back to 1999, the financial institution filed a patent for an alternate bills community. In 2016 they unveiled Juno and Quorum, two separate blockchain-based tasks. JP Morgan may be one in all over 300 participants that make up the Endeavor Ethereum Alliance (EEA).

The financial institution has a powerful document of strengthen for blockchain itself and their newest patent utility will have to come as no wonder. In truth, the financial institution first filed the patent – which goals to facilitate interbank bills the use of blockchain generation on October 30, 2017, a trifling two weeks after Jamie Dimon classified Bitcoin buyers silly.

The wonder may come later

The obvious wonder or hypocrisy stems from the truth that Bitcoin, blockchain and cryptocurrency are nonetheless getting used as interchangeable ideas in mainstream media. This isn’t correct, simply as JP Morgan’s submitting for a patent in accordance with disbursed ledger generation does now not imply they’re now staunch Bitcoin supporters.

On the other hand, the wonder may come later. Blockchain has moved on from simply being the generation that underpins Bitcoin and has attainable use circumstances rather than simply as a foundation for cryptocurrency networks, together with the monitoring of vaccines in healthcare, safe far off vote casting right through elections, incorruptible and correct document protecting of authentic govt paperwork, to call a couple of.

Announcing that, JP Morgan is particularly making use of for a patent on a “manner for processing community bills the use of a disbursed ledger”. This begs the query; are you able to have a P2P bills community in accordance with blockchain with out using a virtual token in some form or shape to procedure such bills?

Some group participants don’t imagine that you’ll be able to, even arguing that the financial institution could be in direct festival with Ripple’s cross-border switch platform:

“It is not the contest phase this is off… it is the truth that they’re describing the precise factor Ripple is lately pushing into the marketplace. There is not any approach this patent is going thru, and if it does, prior artwork will give protection to Ripple as they’ve this running already. It is (as anyone else mentioned) like submitting a patent for an electrical car nowadays.”

How does Ripple paintings?

Ripple connects banks around the globe and allows them to supply real-time cross-border cost services and products to shoppers. Move-border bills within the conventional sense require quite a lot of middleman corporations to execute because of this transactions can take as much as 4 days to finish.

Ripple permits banks to sidestep those intermediaries with their transaction protocol, enabling them to execute transactions at once, and in doing so, reducing down prices and processing instances. The transaction protocol features a five-step technique of cost initiation, pre-transaction validation, cryptographic cling of price range, agreement and affirmation.


Messaging techniques are used to coordinate data alternate between the originating and beneficiary banks and an interledger protocol (ILP) ledger is used to coordinate the real motion of price range. The function is to hurry up processing instances, build up end-to-end visibility, build up transaction approval charges and in the end decrease transaction prices.

What are the similarities with JP Morgan’s proposed blockchain cost community?

The patent utility describes a technique of “Programs and techniques for the applying of disbursed ledgers for community bills as monetary alternate agreement and reconciliation.”

It is going on to assert, “In a single embodiment, one way for processing community bills the use of a disbursed ledger might come with:

  1. a cost originator beginning a cost instruction to a cost beneficiary;
  2. a cost originator financial institution posting and committing the cost instruction to a disbursed ledger on a P2P community;
  3. the cost beneficiary financial institution posting and committing the cost instruction to the disbursed ledger on a P2P community; and
  4. the cost originator financial institution validating and processing the cost thru a cost originator financial institution inside gadget and debiting an originator account.”


JP Morgan’s proposed gadget subsequently depicts a cost protocol with direct communique or messaging between beneficiary and originator banks, used along with a reconciliatory disbursed ledger blockchain.

In essence, this can be a very an identical gadget and procedure to that utilized by Ripple, principally describing an interbank messaging and reconciliation protocol in accordance with disbursed ledger generation with a view to get rid of pricey intermediaries, accelerate transaction time and prolong the worldwide remittance achieve.

It might additionally appear then, that if JP Morgan is certainly making plans to expand the gadget described within the patent, they are going to must enforce it with a cryptocurrency at its core, the very factor they’ve been seeking to discredit for the previous few months.

Without equal query then turns into if it is conceivable to be a powerful supporter of blockchain on one hand, however an similarly robust opponent of the validity and legitimacy of cryptocurrencies at the different.

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