JP Morgan, America’s largest bank with total assets of $2.35 trillion, is building a private blockchain based on ethereum according to a recently published presentation.

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JP Morgan’s Quorum, built in partnership with EthLab, co-founded by Jeffrey Wilcke, an Ethereum core developer, is “a minimalistic fork of the Go Ethereum client” and a “derivative of Go Ethereum.” It allows for hundreds of transactions per second, according to the presentation, and increased privacy as smart contracts can be validated by only parties to the contract.

The presentation shows a high-level view of the private blockchain architecture with four components. There’s a network manager which enables a permissioned network by controlling access, a “crypto enclave” for private key management, a transaction manager for data storage and communication as well as for access to encrypted private transactions and a quorumchain which “utilises core Ethereum features to verify and propagate votes through the network.”

Speaking to CCN, Wilcke provided a detailed explanation fully quoted below:

The project consists of several parts, 1 part is being developed by JPM (signing of private transactions), and 2 by us:


1.  Block creation and validation model

Back during devcon1 I was sitting on an idea to create a different kind of block validation and creation model where instead of mining you’d use an on-chain voting contract to determine the canonical block. In short, votes determine the next block and blocks can be created by an arbitrary number of proposers. The same contract would further be used to validate the block as this would allow for neat upgrade strategies without forking. I think this idea is neat in general as it would allow anyone to vote on the “new rules”. Though not yet implemented it would work like this:

i. Propose a new set of rules and a time limit

ii. Collect votes and determine outcome

iii. Use new rules

This is great because we can use the same consensus rules to determine the new consensus rules, where as normally you’d have to hardfork and release a new client.

2. Custom consensus rules

The JPM chain requires special rules that will allow private transaction e.g. there’s a separation between public and private contracts. Public can be seen by anyone and private can only be seen by parties that have access to a key belonging to that particular party.

We have asked JP Morgan for comments on intended use of the private blockchain and are awaiting a response.

Why is Everyone Forking Ethereum?

JP Morgan’s project is the latest sign that the many mainstream companies working on private blockchains are primarily choosing to fork Ethereum with JP Morgan’s example of particular interest as they are part of both Hyperledger and R3 which is currently building their own – from scratch – private chain protocol.

Ethereum image

The main reasons presented are Ethereum’s first mover advantage as it was the first to implement smart contracts, its large community of developers as showcased in Shanghai, and, more importantly perhaps, its security as Ethereum, which currently secures more than $1.1 billion, is battle tested daily. Moreover, we can imagine interoperability between a private ethereum based blockchain and the public blockchain, which may be desirable in the future, is probably easier than between two vastly different protocols. On this point, Wilcke states:

“[W]ith PoS and sharding it’ll be much more reasonable to assume that effort will be put to make private chains somehow merge with the public net. Time will tell.”

Hyperledger and R3’s Codra may, of course, have their own special use cases, but if an 80/20 rule begins to arise in favor of Ethereum, we can imagine both private and public blockchains would benefit as they would more easily share their work on common areas, which is probably around 80% or more of the code, more easily set standards, allow for interconnection between projects and overall create a merging in a way between the public and private blockchain space for much of the development aspects, pulling in resources, with both private  and public chains benefiting from the lessons of the other.

That may be the main reason why most are forking Ethereum for their private blockchains and why Ethereum’s community is very welcoming and open to such developments – even for JP Morgan. How the interrelations between the private and public blockchain will develop however, only time will tell.

Images from Shutterstock and Ethereum.




  1. They are trying ETC too soon ??

  2. Bitcoin is KING, lets them all ripples and eth. BTC is digital gold and has made a mark of its own. Owning some BTC now or in the future will eventually make you feel like holding Digital Gold ..

  3. How about Interledger?

  4. Take a look at the architecture of the new Hyperledger Fabric V1 before calling game over. A lot of innovation still to go, and most companies and government grant wins to the projects using true openly governed open source, and that’s what you get with Fabric:

  5. And this is the full “kill it with fire” news announcement that ends any and all ethereum interest for me.

  6. Lisa de Boer 01/10/2016 at 03:42

    So JP Morgan is using the same Ethereum as you and me?

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