The largest bank in the world has partnered with the makers of zcash to provide a new layer of privacy to the users of its enterprise-grade blockchain.
Revealed on stage today at CoinDesk’s Consensus Summit 2017, JPMorgan and the Zerocoin Electric Coin Company are now in the process of integrating ZSL, a zero-knowledge security layer designed to securely – and anonymously – settle transactions on the blockchain that were previously conducted elsewhere.
While the zero-knowledge security layer is crucial to the anonymous transactions enabled in the zcash cryptocurrency, the technology itself was designed to let a wide range of networks securely settle the movements of digital assets.
But JPMorgan’s implementation of ZSL marks the first time the technology is being formally adopted by a distributed ledger platform, as part of its ethereum-based Quorum project.
Zcash CEO Zooko Wilcox said that the tech integration could lead to major growth in the kinds of assets that can be utilized, with JPMorgan’s open-source blockchain as a basis.
“It’s the same thing that we’ve deployed in the zcash cryptocurrency. We’re fitting that on top of Quorum, and it’s providing the same kind of security for Quorum that it provides for zcash.”
Though Quorum already lets enterprises execute privacy oriented smart contracts, the new zero-knowledge security feature is designed to extend the actual settlement of those transactions onto the blockchain itself.
Similarly to how SSL was invented to provide a new layer of security on top of the public-facing HTTP in the early days of the internet, ZSL provides a degree of anonymity beneath the more public features of a blockchain.
But the heightened anonymity comes with a volume button of sorts – similar to the functionality of the zcash token – letting corporate policy makers give authorized individuals, regulators and investigators varying degrees of access to the underlying data.
“The cryptographic and software engineering engine that implements secure transfer of ZEC tokens on the open blockchain is basically the same technology that implements the secure transfer of these digitized assets on an enterprise blockchain,” said Wilcox.
Not that long ago, the idea that JPMorgan might integrate technology developed explicitly for a cryptocurrency would have seemed far-fetched.
Back in November 2015, JPMorgan CEO Jamie Dimon ruffled some feathers in the blockchain community when he publicly stated that “no government” would tolerate a cryptocurrency that is designed to evade government control. But in the same speech, he expressed interest in distributed ledger technology for its potential applications in the finance space.
Since then, the bank, valued at $300bn, has become a leader in the blockchain space, first with Juno, an early experiment with the technology unveiled at a Hyperledger meeting last March.
By October, the project had evolved into Quorum, an enterprise-grade blockchain designed specifically to let large financial institutions comply with regulatory requirements, especially on the privacy protection front.
This year has been a breakout year for the bank, which has seen Quorum accepted into Microsoft Azure’s blockchain-as-a-service platform. The bank formally departed the R3 distributed ledger consortium to make a go of it as a founding member of the Enterprise Ethereum Alliance, which the Zcash team formally joined earlier today.
“By adding the Zero-knowledge Security Layer into Quorum,” said Suresh Shetty, JPMorgan’s lead architect at its Blockchain Center of Excellence in a statement. “We are able to explore how state of the art cryptographic privacy technology will enhance the next generation of financial services applications.”
Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Zcash Company.
Safe lock image via Shutterstock
Powered by WPeMatico