JP Morgan's "Digital Coin" is Not a Cryptocurrency

AlphaAtlas

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If you ever read headlines from large, business focused news outlets, you've probably heard that JP Morgan Chase just created their own "cryptocurrency." But, referencing advice from the executive director of DC-based policy research and advocacy group Coin Center, Motherboard points out that JPM Coin isn't a cryptocurrency at all. As the Financial Times also notes, JPM Coin is more like a database managed by JP Morgan Chase than a publicly traded cryptocurrency. JPM's own site even has a chart that attempts to differentiate JPM Coin from cryptocurrencies and "stablecoins," and it mentions that the digital currency is designed for transferring large sums of money between institutions, not handling small transactions between individuals.

"If JPM Coin is a cryptocurrency, then Facebook credits and World of Warcraft money are cryptocurrencies," Jerry Brito, executive director of DC-based policy research and advocacy group Coin Center, told me over the phone. The sticking point is that most cryptocurrencies-like Bitcoin, Ethereum, or Monero-aim for decentralized control of the network, with many disparate computers working together to agree on the state of the shared ledger that keeps track of everybody's money (the blockchain). These networks are public in the sense that anybody can join in without asking for permission. And in the case of Bitcoin, more computers joining the network improves the system's overall security. JPM Coin, in contrast, runs on a "permissioned" blockchain called Quorum with limited participants that must first be approved by JP Morgan Chase. "It's the same distinction between AOL and the internet," Brito said. "The internet is open, so anybody who wants to create a blog, website, or consumer service can connect a server to the network without asking permission from anybody. Compare that to AOL-it was a permissioned network where if you were a publisher, you had to go to the company and seek their permission."
 

goodrob

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I am having a hard time trying to grasp the why of all of this. I mean if it is only used internally how hard is it to just transfer money from account a to account b already? my first thought and I could be way off is maybe this can be used to hide certain transactions by saying we didnt transfer money we just sent these bits to this person.
 

Armenius

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So... it's a privately-owned cryptocurrency instead of a decentralized cryptocurrency? Still makes it a cryptocurrency no matter the semantics.
 

Verge

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I am having a hard time trying to grasp the why of all of this. I mean if it is only used internally how hard is it to just transfer money from account a to account b already? my first thought and I could be way off is maybe this can be used to hide certain transactions by saying we didnt transfer money we just sent these bits to this person.

Extremely difficult, usually takes days.
 

greenman

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Haha just like AOL to internet, regardless of the amount of money backing or the amount of cds that come in the mail, people will choose the free web of nets. Bold strategy Morgan, but you cant just jump in and claim ludicrous superior control.
 

Dead Parrot

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After looking at their site, seems like a large corporation decided to try 'Blockchain' in a limited capacity. This has the feel of a Live trial program.
 

$trapped

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Sounds like a great way to launder money through an official channel to me.
He's been reading Deutsche Bank's playbook for laundering money and thought of a better way. We get the best ideas from everywhere else.
 

Galvin

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Public can't buy it anyway. Its private, so to crypto currency people. It won't matter
 

Nobu

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It's a virtual currency, like the reward points on your credit card or the virtual currency in almost any mmo. There's no encrypted block chain or anything like that, so it's not a crypto currency
Edit: except there is...so it kinda is like a crypto currency. :/
Then, is the distinction here simply that it's a private currency, like an intranet? The fact that it's used between multiple companies makes me suspect the irs won't buy that BS.
 
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STEM

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It's a virtual currency, like the reward points on your credit card or the virtual currency in almost any mmo. There's no encrypted block chain or anything like that, so it's not a crypto currency
Edit: except there is...so it kinda is like a crypto currency. :/
Then, is the distinction here simply that it's a private currency, like an intranet? The fact that it's used between multiple companies makes me suspect the irs won't buy that BS.

Someone at JP Morgan figured out an "angle", and that's all it is. They are one of the most powerful banks in the world, so chances are unless this goes terribly wrong, the general public will never find out what they're really up to. So I won't even speculate on it...
 

Comixbooks

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Kayne West Coinye is legit though until he said he filed a suite.
coinye.jpg
 

Nimisys

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Apparently JPM handles 5 trillion a day in transfers between different institutions, and the SWIFT network doesn't allow them to do them in real time. Thus using Blockchain to facilitate those transfers. Or at least evaluating it.

But Blockchain has to equal crypto in popculture...
 
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