2018 is going to be all about Blockchain technology. The underlying framework for Bitcoin and other cryptocurrencies, Blockchain is now finding application in various other fields. It has garnered the attention of different businesses and financial institutions. It includes some big names like IBM, Microsoft, Walmart, Amazon, JP Morgan, etc.
All these companies are working towards exploring the use of Blockchain in different fields. When we are talking about Blockchain, we cannot go ahead without discussing financial transactions. Although we are now talking about Blockchain and its application in different niches, before this, it only came into existence and popularity because of Bitcoin and other cryptocurrency exchange. The blockchain is going to create a financial revolution. It is going to bring forth an entirely new system for financial transactions. It is because of these reasons that financial giants like JP Morgan are now exploring on using blocking as a platform for transactions.
Overview of Blockchain-
Before heading further to understand, what JP Morgan is doing in the field of Blockchain technology, it is important to have a quick recap of this technology. The Blockchain is a digital distributed ledger which allows the peer-to-peer transaction. All these transactions are encrypted and hence are difficult to hack it or change it. Moreover, these transactions are time-stamped and are stored in chronological order making it easy for anyone in the network t track the history. Decentralization is the key feature of Blockchain; it means that the information is not stored in a central repository. In any case, if one of the systems in the network fails, it will not hamper the information, and you can easily access it.
Key features of Blockchain that have garnered the attention of biggies like JP Morgan:
To sum up, in simple words, Blockchain is a blend of a multitude of features which can lay the foundation stone for futuristic technology, which is not only full-proof but also immutable. Here is the list of key features of Blockchain :
- Encrypted information or transactions
- Security of the data and other information
- Easy to track
- No involvement of the third party thus time-saving and money saving
Why are banks turning towards Blockchain?
Before we go ahead and understand what JP Morgan is doing in the domain of Blockchain technology is, it is important to understand, why banks and other institutions embracing this technology with such warmth.
Well, the answer for this is simple; the technology on which we are currently functioning is not full-proof. The probability of hacking, loss of data and information is high, and there is no such system which can guarantee security. Under such grave circumstances, it is important to search or create a system which can ensure security and transparency at the same time. Furthermore, we also need a financial transaction platform where the third party doesn’t have access to personal information and also cuts down the cost of the transaction in the form of processing fee.
Blockchain (for now) is a probable solution for all these problems. All its features are the benefits that the banks and the consumers are looking for. If implemented successfully, it can revolutionize our life and way the things work in the corporate world.
JP Morgan’s Initiatives
Many people are in opposition to this technology, but at the same time, we have banks like JP Morgan that have created a Blockchain based platform. This pilot project has become a huge success, and many banks are on the way to join the league.
Quorum Blockchain by JP Morgan is based on Ethereum and is the base for Interbank Information Network (IIN).It enables JP Morgan to exchange information with other banks to address compliance issues in the cross-border transaction matters.
Although this is a pilot project, yet it has received accolades and many other banks like Royal Bank of Canada, New Zealand Banking Group is planning to join hands in this project. The objective of the development of this platform to create a system which can process the payment at a faster pace without a hefty processing fee.
JP Morgan and many other companies have invested heavily in this technology expecting to create a more straightforward and easy transaction system which will lower the cost of various processes like loan trading, securities settlement, and cross-border transactions.
The Bottom Line
The crux of the matter is that Blockchain is the technology of future and companies like JP Morgan are trying to make the best out of it. If their pilot project becomes a success, it will create a seamless system of the monetary transaction which is safe secure and free from hacking.