As blockchain became more mainstream, banks started to pick up on the technology as well.
They took note of Bitcoin and what it offered as a digital currency, but did not agree with Bitcoin’s design goals of being open, decentralized, and trustless.
After all, banks want their users to trust them, and keep operations private and controllable.
Banks looked for a way to apply blockchain technology WITHOUT having to replace the US dollar or any other national currency with cryptocurrency.
They wanted to find ways to leverage this new distributed ledger technology without inheriting the trustless, distributed, and decentralized overhead from Bitcoin.
This led to a rise of interest in “private blockchains” or “permissioned ledgers,” where the network is not open, not trustless, and does not have a mining scheme with underlying economic incentives (mining rewards).
In a sense, they wanted to separate “blockchain” from “Bitcoin”.
These blockchains take the fundamental cryptographic technology from bitcoin (public key cryptography) and modify it to be more compliant to enterprise use.
[Current blockchain initiatives: enterprise blockchain platforms] There are many different enterprise technologies in the space today, including R3’s Corda, Chain, JP Morga’s Quorum and Juno, and Digital Asset Holdings.
The Hyperledger project is an open source blockchain run by Digital Asset Holdings and the Linux Foundation.
IBM’s Open Blockchain is a platform that is now part of the Hyperledger project as “Fabric”.
The way that companies, especially financial institutions, have looked at blockchain technology has changed drastically over the past few years.
Let’s take a look specifically at Jamie Dimon, the CEO of JP Morgan Chase…
…As one of the most influential figures in the financial sector, his words can play a huge part in shaping the public opinion on blockchain.
In January 2014, he said about Bitcoin “It’s a terrible store of value.
It could be replicated over and over.”, which doesn’t really mean anything, indicating that people really didn’t, and still don’t understand what Bitcoin is.
In October 2014, he said “[Bitcoin developers] are going to try and eat our lunch.
And that’s fine.
That’s called competition, and we’ll be competing.” The statement seems aggressive, but he actually gives legitimacy to Bitcoin by suggesting that it’s a competitor to traditional banks and finance.
In November 2015, “Virtual currency, where it’s called a bitcoin vs. a US Dollar, that’s going to be stopped… No government will ever support a virtual currency that goes around borders and doesn’t have the same control.
It’s not going to happen.” Now, Bitcoin isn’t just competition, it’s a bona fide threat.
It’s something that bankers can’t control, and they hate it.
In October 2017, he said “Bitcoin is a fraud that won’t end well.
If you’re stupid enough to buy Bitcoin, you’ll pay for the price of it one day.
The blockchain is a technology which is a good technology.
We actually use it…God bless the blockchain.” Note that it looks like Dimon has started to understand the merits of blockchain technology as opposed to just Bitcoin itself.
His stance towards Bitcoin doesn’t seem to have changed.
These comments were actually made at an event hosted by the Institute of International Finance, which was hugely publicized.
Just to drive his point home, here are some more comments he made in September 2017.
“I’d fire a JP Morgan trader in a second who traded [Bitcoin].
IT’s against the rules, its stupid, its dangerous.” And in another quote he said “One of my daughters bought bitcoin and it went up, she thinks she is a genius.”
In January 2018, he said “The blockchain is real.
You can have crypto yen and dollars and stuff like that … the bitcoin to me was always what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people.”