America's biggest bank keeps making (crypto) money moves. JPMorgan Chase's recent announcement that it is planning real-world tests of its own private cryptocurrency got a lot of attention. But for years, the bank has quietly been developing what the Financial Times calls the "leading blockchain technology" for cross-border payments between banks. Now, according to a report from the FT, the bank plans to add even more features to its so-called Interbank Information Network (IIN).
The IIN is based on JPMorgan's own permissioned blockchain platform, called Quorum, which the bank describes as an "enterprise-focused version of Ethereum." Already, 220 banks are using the IIN to more quickly resolve certain types of compliance issues that can typically delay payments days or weeks. John Hunter, JPMorgan's head of global clearing, tells the FT that the bank has now developed a new feature that can automatically and in real-time verify that a payment is going to a valid account, to more quickly detect another kind of error that can cause days-long delays. He says the system will go live later this year.
The jury is still out as to whether blockchain technology can make a big difference in the corporate world. JPMorgan seems convinced, though, and it's far from alone. According to Forbes, total corporate and government spending on blockchain technology is on pace to reach $2.9 billion in 2019, an increase of 89% relative to last year.
How exactly these networks will be governed, particularly relative to public blockchain networks, is still largely unclear, however. Will a centralized entity like JPMorgan always be in charge? And will that even matter? The main advantage of Bitcoin and similar networks is that centralized authorities are not required, and many blockchain enthusiasts argue that permissioned systems miss the point and are thus not worth the trouble of setting up. But JPMorgan's continued dedication to the idea suggests that perhaps we shouldn't be so dismissive.
"Blockchain voting" is (still) a risky idea. Election security experts, avert your eyes: West Virginia will let military voters stationed overseas cast their votes for the 2020 presidential election via a mobile app that uses a private blockchain.
Donald Kersey, West Virginia's elections director, tells the crypto news website LongHash that he believes the app, created by a startup called Voatz, can enhance participation by overseas voters. Turnout among this group is very low, in part because the process of receiving a ballot and securely returning it on time is often not straightforward. This is the rationale behind the decision by a number of states to allow overseas military voters to return their ballots via e-mail. West Virginia apparently is of the mind that Voatz's private blockchain will make this kind of online voting more secure. The state first piloted the program during the 2018 midterms.
But many election security experts oppose online voting of any kind, blockchain or not, and came out strongly against West Virginia's 2018 pilot. Prominent cryptographers, computer scientists, and political scientists have determined that it is not technically feasible to develop an internet voting system that can preserve all the attributes voters expect from democratic elections—such as secrecy and accessibility. On top of that, blockchains introduce their own, novel security vulnerabilities. (See "Why security experts hate that "blockchain voting" will be used in the midterm elections.")
Though Kersey admits there's no telling for certain whether the app can be compromised, West Virginia is undeterred, especially given the "really good response rate" officials saw during the midterms last year. "We are not saying mobile voting is the best solution to the problem, we are not saying that blockchain technology is the best solution to storage of security data," Kersey tells LongHash. "What we are saying though is that it's better than what we have."
