The JPM Coin
JP Morgan made news on February 13, 2019 when they announced their own cryptocurrency. Dubbed the JPM Coin, JP Morgan intends to use the currency to immediately settle transactions with some of their larger clients.
What is a Cryptocurrency?
In a nutshell, cryptocurrency is an electronic database or “ledger” where transactions are verified by multiple computers where each computer has its own copy of the ledger.
Whenever a new transaction is entered, each independent computer must verify that the transaction is legitimate. Once a certain number of systems agree, the transaction is considered confirmed.
For a more detailed description of cryptocurrency and how similar ones, such as Bitcoin, operate, check out our primer.
What are the Benefits for JP Morgan?
By using its own cryptocurrency, JP Morgan can retain full control of a transaction while being able to pay clients or settle contracts immediately and internationally without having to wait for traditional currency transfers which can take hours or days. Using JPM Coin may permit instantaneous resolution of contracts.
What does this mean for Bitcoin?
HODLers might be very excited about the news thinking that JPM Coin legitimizes Bitcoin, but it does nothing of the sort. In fact, during the launch of JPM Coin, Jamie Dimon once again denounced Bitcoin as a fraud.
JP Morgan releasing their own cryptocurrency simply legitimizes blockchain technology. In a previous feature story, we said Bitcoin and similar cryptocurrencies are on a Road to Nowhere, and the JPM Coin announcement only cements the fact that there is no positive news in the Bitcoin space, at the moment.
We still don’t recommend speculation in the independent cryptocurrencies such as Bitcoin as there are no foreseeable catalysts which could result in an increase in value, and, for now, there is nothing on the horizon to indicate anything other than further downside for Bitcoin.
