JPMorgan is Testing Ethereum-Based Privacy Technology

It appears that JPMorgan Chase is focusing even more intensely on its crypto efforts as it has been revealed that the firm is testing the privacy-offering technology known as zero-knowledge proofs (zk-SNARKs).

The particular zero-knowledge proof solution that JPMorgan is examining is one called the AZTEC protocol. The AZTEC protocol was developed by a London startup, and is already live on the Ethereum mainnet.

The whitepaper describes the purpose of the protocol:

The AZTEC protocol enables confidential transactions in a generic form that can be implemented on blockchains that support general-purpose computation, such as the Ethereum blockchain. The AZTEC protocol can be attached to existing digital assets defined on these platforms (for example, digital assets that conform to the ERC20 token standard). The protocol also enables confidential cross-asset trades for digital assets defined on the same blockchain platform via confidential zero-knowledge decentralized exchanges.

The AZTEC protocol differs from the traditional zk-SNARKs methods because it uses something called range proofs, which is less taxing computationally. The team says that the transactions costs are lower, though the efficiency doesn’t quite match Ethereum’s network — but the team is working on that.

JP Morgan, which recently announced the launch of its cryptocurrency token called JPM Coin, has upped its game in the space after CEO Jamie Dimon once called ‘bitcoin’ a fraud.

Clearly, the investment bank sees a lot of potential in the emerging asset class, with the firm saying that it would perhaps one day intend the JPM coin to be used for consumers — although for the moment, it is only considering the token to be used in internal transactions.

zk-SNARKs, which the Zcash project is at the forefront of, allows complete privacy in transactions, hiding the sender, recipient and transaction amount. It is known as one of the more cutting-edge and complicated technologies being developed in the space, and has seen nods of approval from the likes of Vitalik Buterin and Edward Snowden.