Ripple CEO Explains Why He’s Not Bothered By JP Morgan’s Cryptocurrency

JP Morgan has changed Ripple’s distributed ledger with the Quorum Blockchain that came from Ethereum and changed the XRP Coin with its own, …

Ripple had an idea that JP Morgan, an international banking titan, had also made use of the Blockchain to conduct transactions from anywhere faster, cheaper and more efficient than conventional banking systems. JP Morgan has changed Ripple’s distributed ledger with the Quorum Blockchain that came from Ethereum and changed the XRP Coin with its own, JPM Coin.

JP Morgan claims that JPM Coin, which theoretically shouldn’t have even been called a Cryptocurrency, combines both traditional finance and Cryptocurrency. It uses Blockchain technology to perform intercontinental transactions faster while avoiding the volatility like that of XRP’s.

The JPM Coin can be sent and received by JP Morgan customers back and forth, which directly exchange them from USD on a ratio of 1 to 1, and makes it more appealing than XRP, which is highly volatile.

In other words, a big company has copied a startup company and has made their business better. These kinds of things don’t really work when startup companies do them. But in defense of the CEO of Ripple, Brad Garlinghouse, they are not afraid fighting the titans of Wall Street.

In a Tweet he sent, Garlinghouse stated that JP Morgan’s Cryptocurrency misses the point. A former executive from Yahoo defined that JPM Coin relies on an “isolated network”, which doesn’t really make it innovative.

It all boils down to this: are XRP users loyal, guessers, or are they both? Loyal users will use XRP to pay for transactions for its underlying technology. The user would only use XRP for purchases because it’s relatively cheaper and quicker. Then on the receiving end, XRP would be traded to traditional money instantly.

Guessers, on the other hand, would buy XRP in the hope that it goes up in value and then would sell it once it’s high enough. The same situation won’t apply for a bank coin just like JPM Coin, the job of which is to perform processes in real time.

JP Morgan has the potential of getting the customers of XRP who use them for remittance, and Ripple would have to get its objective pointing on the right direction. A Coin that isn’t volatile that would be used for transactions between banks could be the solution.

(Jet Encila is a journalist, editor and freelance writer from the Philippines).

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Blockchain Technology Helps HSBC Save 25 Percent on Forex Trade Settlements

HSBC has reported a successful trial of their blockchain-based “FX Everywhere” platform which has saved 25 percent of costs associated with forex …
Reading Time: 2minutesbyonFebruary 18, 2019&nbspBlockchain, News

HSBC has reported a successful trial of their blockchain-based “FX Everywhere” platform which has saved 25 percent of costs associated with forex trade settlements, Reuters reported on February 14, 2019.

Cost-Saving Measures

Besides the use of blockchain in cryptocurrencies, it can also be used to save money. For example, the World Trade Organization has estimated that the use of blockchain in the industry will add $3 trillion over the next decade.

Now, it has been reported on February 14, 3019, that HSBC has saved up to 25 percent of its costs associated with forex trade settlements thanks to its use of blockchain.

On a given day, HSBC’s processes between 3,500 and 5,000 trades worth $350 Billion. Since the inception of the platform, it has processed a total of $250 Billion worth of trades

“We going at a pace now,” Mark Williamson, chief operating officer of FX cash trading and risk management, said. “We’re able to demonstrate that this is not a one-off proof of concept or just one or two trades.”

Exact figures about the value of trades still being settled using the trading process weren’t given but those that are being settled on the FX Everywhere platform reportedly represent a small fraction of the overall trades that take place. Regardless, this is an example of blockchain being used on a large scale by a giant of the finance industry.

Future Plans

Based on the word of the COO, HSBC is fully aware and impressed by the amount of money that is being saved and these results go beyond a test case, instead, proving themselves over a significant period of time and a large sum of money.

The platform, according to HSBC, is used to coordinate payments across regions such as Americas, Europe, and the Asia Pacific. Now that its initial run has been such as success, Williamson predicts that a larger volume of HSBC’s trades will be settled on the blockchain-based platform.

He said:

“The more participants that you have joining the HSBC shared permissioned ledger and the ecosystem, the more efficient we’re going to become in providing services to our clients.”

In terms of banks making use of blockchain to settle payments, HSBC isn’t the first as banks in Kuwait and the UAE have either partnered with blockchain firms for this purpose or incorporated blockchain into their systems.

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JP Morgan’s crypto project draws mixed reaction from industry

J.P. Morgan’s recently announced cryptocurrency project, ‘JPM Coin‘ is … of experts who see JPM Coin as a direct competitor of Ripple’s XRP token.

J.P. Morgan’s recently announced cryptocurrency project, ‘JPM Coin’ is drawing mixed reactions from the industry.

In a report dated February 14, Bloomberg cited a number of experts who see JPM Coin as a direct competitor of Ripple’s XRP token.

Calling the JPM project as “more evolutionary than revolutionary,” Travis Kling, the Los Angeles-based founder of crypto hedge fund Ikigai Asset Management, noted that the crypto is based on Quorum, a private, permissioned blockchain technology, which is much closer to a Google Sheet than a Bitcoin.

“The project is clearly competing directly with Ripple Labs and their centralized cryptocurrency XRP,” he said.

Tom Shaughnessy, principal at Delphi Digital, echoed similar views and said, “This is a huge slap in the face for Ripple. Ripple’s target market is cross-border payments and remittances and now JPMorgan’s effort is a direct threat.”

However, the crypto project has also drawn criticism with many believing that it is nowhere close to being called a cryptocurrency.

Ripple CEO Brad Garlinghouse voiced his views in a tweet saying that the project “misses the point.”

As predicted, banks are changing their tune on crypto. But this JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer

— Brad Garlinghouse (@bgarlinghouse) February 14, 2019

Well-known American economist Nouriel Roubini believes that JPM Coin cannot be even called a “crypto.”

In which way has the new alleged JPMorgan crypto coin anything to do with blockchain/crypto? It is private not public, permissioned not permissionless, based on trusted authorities verifying transaction not trustless, centralized not decentralized. Calling it crypto is a joke

— Nouriel Roubini (@Nouriel) February 14, 2019

It appears that JPMorgan’s new cryptocurrency, JPM Coin, is just like all the other cryptocurrencies tied to the value of a dollar, but less useful, because it can’t move anywhere beyond the walls of JPMorgan.

— Nathaniel Popper (@nathanielpopper) February 14, 2019

Correct. JPM Coin and its near-twin the Petro lack the predominant source of value that distinguishes cryptocurrencies from bank money: trust minimization.

— Nick Szabo ???? (@NickSzabo4) February 15, 2019

Read this an hour ago and I am still rolling laughing. JPM is launching a centralized, inflationary Coin and THIS will kill Bitcoin ? ???????? Its titles like these that indicate author has very little clue what he is talking about . If anything Bitcoin Dream just got stronger !

— George Kikvadze (@BitfuryGeorge) February 14, 2019

In an online post, Jerry Brito, Executive Director of Coin Center, explains why JPM Coin is not a cryptocurrency.

“The main thing that makes a crypto a crypto is that it is built in such a way that anyone can use it and anyone can participate in its consensus system without seeking permission from anyone else,” he said. “That is certainly not what J.P. Morgan built, nor even what it wants to build…”

Brito further states that the bank should have announced the project as a new interbank settlement network, instead of a coin, adding:

“That framing could have avoided confusion, but I doubt it would have generated as much attention. This is just marketing you might think, but it matters.”

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Japan e-commerce giant Rakuten is expanding support for cryptocurrency

Japanese e-commerce giant Rakuten Inc. is set to expand support for cryptocurrencies, possibly including cryptocurrency exchange services, via an …

Japanese e-commerce giant Rakuten Inc. is set to expand support for cryptocurrencies, possibly including cryptocurrency exchange services, via an upgrade to an existing mobile app coming March 18.

The news cames in the company’s financial results published Feb. 12. The Rakuten Pay app will provide support for bitcoin and possibly other cryptocurrencies.

The exact details are not entirely clear. Rakuten has accepted bitcoin as a payment method since 2015, one of the first major companies to do so. Rakuten initially offered bitcoin payment support through a company called Bitnet Technologies Inc. which it acquired in 2016.

Hinting at what may be coming in March, Rakuten acquired cryptocurrency exchange Everybody’s Bitcoin in August for $2.4 million. At the time of the purchase, Rakuten said that “the role of cryptocurrency-based payments in e-commerce, offline retail and in P2P payments will grow in the future” and that “in order to provide cryptocurrency payment methods smoothly, we believe it is necessary for us to provide a cryptocurrency exchange function.”

The latter point is the key. While the cryptocurrency media speculates that Rakuten may be accepting bitcoin payments, something it has done for four years now, the new feature may actually offer full cryptocurrency exchange services.

If Rakuten is about to offer cryptocurrency exchange services, it will be a boost for the market. According to its own figures, Rakuten has 1.2 billion “members” across the world. Because of regulatory issues, it’s unlikely the company will offer global cryptocurrency services initially, but it will start in its home market of Japan.

In Japan, Rakuten, as of April, had 95 million customers, all of which could potentially be offered cryptocurrency exchange services come March.

The service would also have indirect opportunities. Rakuten owns messaging service Viber and is also a significant investor in Lyft Inc. Presuming it does see cryptocurrency exchange services as a growth opportunity, it may be set to be the first major e-commerce player to enter the market in a big way.

Rakuten is a fan of general blockchain technology as well. It announced in February 2018 that it was rolling out a blockchain-based loyalty system that will incorporate its existing point system.

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Debunking the ‘Bitcoin Cannot Do Smart Contracts’ Myth

This topic of whether Bitcoin is useful for smart contracts came up during Casa CTO Jameson Lopp’s recent interview with Epicenter. While sharing his …
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The main selling point of systems like Ethereum and EOS is their ability to execute smart contracts, at least according to the supporters of those projects. To them, Bitcoin is simply too limited and conservative, and new approaches are needed to unlock the true power of blockchain technology.

Of course, this is not technically true. While Bitcoin’s scripting language is much less expressive than Ethereum’s (for example), it’s possible to write certain types of smart contracts on Bitcoin as it exists today. Three examples of applications of Bitcoin smart contracts include: Bitcoin’s often-hyped Lightning Network; the recently announced Arwen protocol, which dramatically increases security for traders on exchanges; and Abra, which allows users to peg the value of their bitcoin to many other real world assets.

Multisig addressing is another example of a smart contract, and former Bitcoin Core lead maintainer Gavin Andresen once argued most of what Ethereum is useful for can already be done with Bitcoin’s multisig functionality today. In fact, Andresen wrote about this a little over a year before Ethereum officially launched.

This topic of whether Bitcoin is useful for smart contracts came up during Casa CTO Jameson Lopp’s recent interview with Epicenter. While sharing his thoughts on the matter, Lopp discussed his view of Bitcoin as a trust anchor, how more expressive smart contracts can be implemented in Bitcoin, and Bitcoin protocol developers’ conservative approach to their work.

Bitcoin as a Trust Anchor

The discussion around Bitcoin’s usefulness for smart contracts came out of a question from Epicenter co-host Brian Fabian Crain around the general utility of the Bitcoin network. Lopp was asked to explain his thoughts on whether Bitcoin should be utilized for payments, the “digital gold” use case, trustless computing, or something else.

In his response, Lopp noted that most of his thoughts related to this question can be found in a CoinDesk article he wrote around the idea of Bitcoin as a trust anchor.

“I do think that there is more to [Bitcoin] than just money. I think what we’re trying to do is create this global record of truth — or at least an authoritative record that has no authority behind it,” said Lopp.

The Casa CTO added that people are able to put whatever data they wish in this authoritative record, and he provided specific examples of how this can be done.

“If you’re moving beyond the simple accounting ledger that the Bitcoin protocol supplies, you have to basically create your own protocol, your own new consensus, for whatever that extension is. Whether that is some sort of layer-two network or a sidechain that is pegged to Bitcoin or extension blocks or whatever — there’s a potentially limitless number of ways to do this,” explained Lopp.

Lopp mentioned VeriBlock, which currently accounts for around 20% of all daily Bitcoin transactions, and RSK, which is an Ethereum-esque sidechain to Bitcoin, as two examples of new protocols created through Bitcoin anchoring.

Smart Contracts on Bitcoin

When it comes to smart contract-functionality specifically, Lopp expanded on his thoughts related to RSK.

“They’re taking that smart contracting language from Ethereum, and they’ve created this sidechain that is pegged to Bitcoin. So, you can kind of have the best of both worlds. Whether that ends up being highly-adopted, nobody knows,” said Lopp.

In terms of Bitcoin’s future potential as a platform for smart contracts, Lopp pointed out that there are plenty of Bitcoin developers who are interested in this sort of functionality. However, they disagree with how Ethereum went about doing things. According to Lopp, it comes down to a debate of execution versus verification.

“A lot of the ‘more conservative” Bitcoin developers don’t like having smart contracts that have to get executed by everyone on the network. They rather want to perform the same type of logic but where the actual execution happens privately, and then you’re just providing a proof of the execution that the rest of the world can verify,” explained Lopp.

Lopp went on to mention Merkalized Abstract Syntax Trees (MAST), Taproot, and Simplicity as examples of how more expressive smart contracts may work on Bitcoin in the future; however, he added that it’s up in the air in terms of when this sort of stuff will be as easy for developers to use as something like Ethereum’s solidity or viper languages.

Bitcoin’s Conservative Approach to Protocol Changes

And this gets into a key difference between Bitcoin and all of the other crypto asset networks out there: alterations to the Bitcoin protocol tend to come at a slower pace.

“Advancements with the Bitcoin base protocol [are] a lot more measured and slower than a lot of other chains for a number of reasons,” said Lopp.

Blockstream mathematician Andrew Poelstra recently explained the reasoning behind Bitcoin developers’ conservative approach to protocol-level changes on an episode of Monero Talk.

Due to this slow and steady approach to development, Epicenter co-host Sébastien Couture asked if Lopp thought it’s possible that the developer network effects around something like Ethereum will grow too strong before it’s easy to build more expressive smart contracts on Bitcoin. Lopp pointed to the economic network effects around Bitcoin in his response:

“[Bitcoin maximalism] tends to be, I think, more economic thoughts of how these types of systems play out rather than a blind belief that Bitcoin was first and it must be the best and will never be superceded yatta, yatta, yatta. There’s definitely plenty of potential for other systems to get greater adoption and surpass Bitcoin or somehow be an order of magnitude more utilitarian than Bitcoin is and therefore supercede its network effects. I don’t think anything is set in stone, for sure. There’s going to be a lot of competition for the foreseeable future.”

In the past, Lopp has also written about his own struggles with Ethereum as an engineer at BitGo.

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