JP Morgan recently announced the construction of the Quorum enterprise blockchain platform in partnership with the Ethereum Enterprise Alliance. Quorum is offered to be the financial sector’s answer to Ethereum. The finance industry has been skeptical of public blockchain on account of security concerns for quite some time. However, Quorum’s “transaction-level privacy and network-wide transparency” are “customizable to business requirements”.
Quorum embraces transaction and contract privacy, voting-based consensus mechanisms and network permissions management to build on the ground already laid down by Ethereum. For example, the public blockchain peer-to-peer (P2P) layer has been altered so that only connections from permissioned nodes are accepted. This serves to keep out unauthorized users.
Like Ethereum, Quorum operates as a distributed ledger for online transactions. The difference between the two is that Quorum has its own unique transaction and contract privacy (the zero-knowledge settlement layer). The zero knowledge settlement layer allows transactions to be kept private, with only the transaction quality and ownership revealed to the network. Zero knowledge proof allows one party, the prover, to prove another one, the verifier, that it has secret information without having to reveal details of the secret.
This is important because privacy has been one of the biggest concerns with regards to blockchain adoption. Summarizing the perspective of the industry as a whole, JP Morgan’s Amber Baldet suggests that businesses want to be “able to transact or transmit information without surrendering information ownership”.
However, Quorum is not limited to the financial services market by any means. As a distributed ledger with a secure P2P layer and zero-knowledge settlements, it is suitable for a wide cross-section of industries. Industries from supply to pharmaceutical would be able to benefit from Quorum’s private, collaborative network.
It is interesting to note that Quorum is taking root in an industry that was historically opposed to decentralized transactions. Yet there is a very good reason for this transition: convenience. Blockchain technology is offering a way for financial firms and entities to work together on complicated currency exchanges and contracts using automation and smart contracts.
Blockchain technology could realistically save financial institutions millions by cutting out intermediaries and reducing the manual processing time of transactions (particularly internationally). Quorum has been designed to address this pain point from the ground up.
The fact that Quorum is being backed by JP Morgan, one of the most recognized names in the finance world, greatly boosts blockchain’s credibility in the industry. Demonstrating the legitimacy of blockchain is one of the biggest challenges within the initial phases of blockchain adoption. Right now, JP Morgan is successfully using Quorum to present blockchain technology as a legitimate disruptive influence in the financial services market.