Temporal: Enterprise Solution for Distributed Data

JP Morgan introduces Zether protocol for private Ethereum transactions

JP Morgan introduces Zether protocol for private Ethereum transactions

The software development team at J.P. Morgan Chase, the world’s sixth largest financial institution with $30 trillion of assets under custody, created a new privacy feature for  Ethereum protocol-based blockchain networks.

The recently developed privacy feature allows users to hide transaction details including the amount being transferred and the address of the sender.

Implementing Confidential Ethereum-based Payment System

According to CoinDesk, J.P. Morgan’s software design team has developed an extension to the Zether protocol, which specifies how to implement a confidential Ethereum-based payment system. The investment bank’s Zether protocol extension is reportedly compatible with several other smart contract-enabled platforms (not just Ethereum).

On May 28, 2019, the New York-based financial institution revealed that it had open-sourced its latest privacy-oriented solution. J.P. Morgan’s management also mentioned that it would most likely be integrating the new privacy feature with its proprietary permissioned Quorum blockchain, which was developed using the Ethereum protocol.

Developed By Stanford University Researchers

As noted by J.P. Morgan’s distributed ledger technology (DLT)-focused development team, the investment bank’s newly designed privacy solution has been created by several FinTech researchers including Stanford University computer science professor Dan Boneh.

Notably, J.P. Morgan’s DLT-based privacy feature uses zero-knowledge proofs (ZKPs), which only disclose as much information as is absolutely necessary to verify certain details related to transactions.

Commenting on how the new Zether-based privacy extension works, Oli Harris, the Head of Quorum and Cryptoassets at J.P. Morgan, remarked:

“In the basic Zether, the account balances and the transfer amounts are concealed but the participants’ identities are not necessarily concealed. So we have solved that. In our implementation, we provide a proof protocol for the anonymous extension in which the sender may hide herself and the transactions recipients in a larger group of parties.”

Harris also explained that Zether protocol’s privacy-focused payments architecture uses an account-based system, which is similar to how the Ethereum network manages transactions. The transaction processing method is different from the unspent transaction output (UTXO)-based system that is used by Bitcoin (BTC).

Collaborating With 220 Other Financial Institutions

In addition to launching a DLT-enabled privacy feature, the management at J.P. Morgan is reportedly working with around 220 other financial institutions on various initiatives related to its Quorum-based Interbank Information Network. Recently, the investment bank’s software development team also completed integration work involving Microsoft Azure.

According to J.P. Morgan, its Quorum-based DLT network will be open-sourced in the foreseeable future. Explaining why J.P. Morgan might open-source its DLT-based technology, Harris noted:

“When we think about the community building on top of Quorum… if anyone is looking to get an efficient trustless mechanism for trustless and anonymous payments in a consortium then that’s when it’s relevant. That’s why we wanted to open-source it back to the community so anyone can build on it further and continue enhancing it and potentially put it into their use cases as needed.”

Posted In: Ethereum, Technology

The above advertisement is an affiliate link. CryptoSlate will earn a small commission if you sign up.

Like what you see? Get more Ethereum development news in your inbox

Subscribe to CryptoSlate, our daily newsletter containing the top stories and analysis.

Sign up to stay informed
Omar Faridi

Omar Faridi

Journalist @ CryptoSlate

Omar enjoys writing about all topics related to Bitcoin, blockchain, and cryptocurrency. He is most interested in crypto regulations, quantum resistant blockchains, and Ethereum and Bitcoin Core development. His academic background includes an undergraduate degree in computer science from the University of Nevada and a masters of science in psychology from the University of Phoenix. He works as an application developer for the University of Houston and a data storage specialist for Dell EMC.

View author profile

Commitment to Transparency: The author of this article is invested and/or has an interest in one or more assets discussed in this post. CryptoSlate does not endorse any project or asset that may be mentioned or linked to in this article. Please take that into consideration when evaluating the content within this article.

Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.