One of the most prominent banks in the world with reportedly $30 trillion assets in custody is now recognizing blockchain technology and exploring its advantages. Are traditional institutions joining the tech revolution? JPM and Chase Co. is reportedly launching a platform called Zether (ZTH), which is compatible with Ethereum and other smart-contracts platforms. Similar to other blockchain mechanisms, Zether is a fully decentralized system designed, not only to be compatible with – but to complement smart-contract platforms.
Zether has reportedly been developed by Benedikt Bunz, Shashank Agrawal, Mahdi Zamani, and Dan Boneh from Stanford and Visa Research facility.
“…In our implementation, we provide a proof protocol for the anonymous extension in which the sender may hide herself and the transactions recipients in a larger group of parties”, reportedly told the media Oli Harris, head of JP Morgan Blockchain division and crypto-assets strategy.
So, let us explore what this actually means. When online, the first thing everyone thinks about is protection. Doing any kind of business online is prone to attacks. Naturally, the more serious the business, the better protection. Doing business with assets has always demanded safety measures. What Zether prides itself with is the ability to hide both the sender’s and receiver’s details, as well as to keep the transaction transparent. Hiding the identity of a sender is a new feature of this project, as previously, Zether was able to hide the receiver, and the balance amount, but not the sender, although the identity was hidden.
Therefore, Zether shares the main Ethereum feature: anonymity and transparency, meaning the identity behind the senders and receivers are protected by powerful cryptography, while each and every attempt to change any detail regarding the transaction is impossible, i.e. it would be visible to all users of the shared network. The data is stored after being validated by the system and the details are immutable. Transparency, in case of the blockchain technology, is what actually reduces the need for checks and balances, making the entire process automated. We are still left to see how a bank would exempt itself as a third party in this respect.
Like Ethereum network, Zether functions as a shared ledger. Sharing a ledger means that senders and receivers do not keep the books each of their own, but rather share a common set of books. Above all, both parties trust each other to keep a record of transactions which they believe are truthful. When it comes to potential hacking, the security of blockchain networks is considered to be top-notch, as the assessments are that enormous amounts of money would have to be invested in order to break the blockchain codes and actually steal the assets.
The developers of Zehter have put their focus on reducing or disabling attacks and allowing for the development of contracts which require privacy. Apart from protecting the user’s identity, Zether privacy feature can be used to provide private payment channels, sealed-bid auction, confidential stake-voting, private proof-of-stake.
Zether has also introduced a ZTH token that will reportedly be funded with Ethereum and another smart contract tokens, facilitating the exchange between the platforms. A Zether transaction reportedly costs about 0.014 ETH or approximately $1.51.
Zether is not the only blockchain project by JPM and Chase Co. The banking giant has reportedly been working on another one, called Quorum payment network, attracting 220 banks to its Quorum Interbank Network. They have also launched a stablecoin which is still being used internally only with plans for public launch presently.
What do you think about banks joining blockchain networks?