Since its launch, JPM Coin has been heavily critiqued for not being a cryptocurrency.
Brad Garlinghouse, the CEO of Ripple, commented that the closed network model of JPM Coin "Misses the point" of what Bitcoin set out to achieve more than a decade ago.
The more important point is the ways in which JPM Coin falls short of what the industry has come to understand as a 'cryptocurrency.
' In essence, JPM Coin is a digitized IOU only available to institutional clients of the bank.
JPM Coin is backed by the US Dollar and only approved nodes can verify the state of the native blockchain.
An FT Alphaville journalist, Jemima Kelly, even speculated if a blockchain is needed in the first place then "Some might argue JPM Coin already exists and that it's just a JPM deposit by another name."
The Binance "DEX" is as much a DEX as JPM coin is a cryptocurrency.
Both JPM Coin and the Binance DEX appear to avoid classification of cryptocurrency and decentralization.
JPM Coin can be construed as an internal place holder for JP Morgan account balances and Binance's DEX pushes the boundaries of what is considered a decentralized exchange through its handful of nodes.
If those users demand the instantaneous bank transfers that JPM Coin offers, does it matter if JPM Coin is not technically a cryptocurrency? Similarily, if traders shift over to Binance's DEX and the platform sees record-high trading volume and liquidity, is it important that it is not fully decentralized? Definitions of cryptocurrency, decentralization, and many other aspects of blockchain are loosely defined and depend on the perceptions of users.
An Era of Centralized Cryptocurrencies and Blockchains: Binance's DEX and JPM Coin
Published on Feb 27, 2019
by Cryptoslate | Published on Coinage
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