Public blockchains, the technology underpinning cryptocurrencies like Bitcoin, may not be mature enough to handle the demands of large financial transactions, according to a high-ranking executive at JPMorgan Chase & Co
What Happened: Umar Farooq, CEO of JPMorgan's blockchain platform Onyx, expressed concerns about the limitations of public blockchains during the Bank of International Settlements (BIS) Innovation Summit on May 7, according to Cointelegraph.
"Public blockchain ledgers are simply not fit for purpose for large transactions today," Farooq remarked, highlighting the need for a more robust system.
Farooq emphasized the lack of accountability within public blockchains.
In the event of a failed $100 million transaction, he questioned, "Who do I sue?"
He argued for a system enabling "trusted transactions between financial institutions with some sort of accountability."
JPMorgan's Contradiction
Interestingly, JPMorgan itself utilizes a permissioned blockchain platform, Onyx, which is a private version of Ethereum, a prominent public blockchain. Permissioned blockchains offer the advantage of allowing institutions to reverse transactions, a feature absent in public blockchains.
Farooq also criticized the incentive structure of public blockchains, suggesting that the focus on driving up cryptocurrency prices through user acquisition creates an unhealthy dynamic.
He advocated for a shift in perspective, viewing blockchains as "a public good" akin to the internet.
The Future Of Blockchain
JPMorgan's reservations highlight the ongoing debate surrounding the suitability of public blockchains for mainstream financial applications.
As the technology evolves, achieving scalability, accountability, and a broader focus on public good will be crucial for wider adoption.
The digital asset landscape is constantly in flux. To navigate this dynamic environment, staying informed about emerging trends and advancements is paramount.
