Jamie Dimon, Chief Executive Officer of JP Morgan Chase and Co is well known for his dislike of Bitcoin, branding anyone who trades in this cryptocurrency “stupid”. He believes that this virtual currency will only end badly, claiming that it is all a fraud.
Despite the fact that Bitcoin has soared in the past couple of months, thanks to greater acceptance of the blockchain technology, and although after Dimon first made his claims Bitcoin initially slipped, this is no longer the case, and the prices have climbed more than four fold.
Dimon has been very vocal about his view surrounding this popular cryptocurrency, and that he is very sceptical that authorities will allow a currency to exist with state oversight. He says;
“Someone’s going to get killed and then the government’s going to come down…You just saw in China, governments like to control their money supply.”
He also believes that Bitcoin will simply not last, and that people were wasting both their time and money by investing in them, adding;
“This is my personal opinion, there will be no real, non-controlled currency in the world. There is no government that’s going to be put up with it for long…there will be no currency that gets around government controls.”
So, this makes the fact the JP Morgan, the very same bank that Jamie Dimon is CEO of has backed similar cryptocurrency Ethereum, by becoming part of the Ethereum Alliance.
Ethereum runs in a similar way to Bitcoin, using a blockchain which is often referred to as a distributed ledger, which then records and executes transactions removing the need of a middleman.
JP Morgan is not the only bank to have joined, with The Ethereum Alliance boasting a huge list of high profile clients, including Goldman Sachs, Santander and Morgan Stanley. JP Morgan are responsible for developing the basis of the blockchain tech for the alliance, called ‘Quorum’.
Although it is strange that Jamie Dimon is happy to support Ethereum when it is so similar to Bitcoin, there are differences, and this is likely the reason. Ethereum offers a huge capacity for smart contracts, making it more agile and adaptable than Bitcoin. Not only this, but the banks could benefit too, by creating a blockchain for themselves. The purpose of the alliance is to create a standard, open source version of the cryptocurrency that can provide a foundation for any specific use. Something that Bitcoin simply cannot do.
Original Image Source: Wikipedia Commons