Bitcoin “is a fraud” and will blow up, Jamie Dimon, chief executive of JPMorgan Chase & Co , said on Tuesday, and to those who know anything about cryptocurrency he couldn’t be more wrong.
The irony of the situation is that while Mr Dimon exclusively mentions Bitcoin in his statement, his corporation JP Morgan Chase & Co has teamed up with Bitcoin rival Ethereum to join the Enterprise Ethereum Alliance (EEA) and is known to be actively researching and developing private blockchain technology.
While it is easy to dismiss Mr Dimon’s statement as the outdated rumbling of an old man, on a closer investigation it is easy to deduce that this is a calculated attack on a disruptive competitor, while his corporation solidifies their position in this future technology. It is quite clear he is making these statements because he has a financial incentive to do so.
So what makes public blockchains like Bitcoin a threat to the likes of JP Morgan & Co? Public blockchains are accessible to everyone! Put simply, a blockchain is an immutable append-only ledger, meaning it is a permanent verified record of every transaction and every auditors dream. Every wallet address and transaction is completely transparent. The blockchain itself is built and maintained by specific software on decentralized peer nodes, meaning anyone is open to contribute to the network.
From this technological breakthrough, we are already seeing blockchain technology expand into industries which lean heavily on data insurance and integrity. Projects such as Factom and Tierion are revolutionizing the mortgage, auditing and data storage industries. Smart contract platforms like Ethereum and NEO are allowing programmers to deploy open-source transaction programs for everyday use. Another is OmiseGo , a payment service project built on the Ethereum network which is highly prevalent in SE Asia and has just started a partnership with McDonalds in Thailand.
The technological merits of blockchain are clear but they do present some issues to the banking industry. A private blockchain means only permissioned clients would have access, removing the transparency of the ecosystem. This is clearly necessary in an environment where both corporation and customers transaction history should be treated with a degree of privacy. This kind of solution also cuts red tape and regulations and greatly increase the auditability of banking industry.
So while Mr Dimon see’s fit to attack competitors, as beneficiaries of this awesome technology we ought to be encouraging the advancement of both private and public blockchains, as they both hold great technological merit and are clearly a part of the future.