JPMorgan bank has introduced an Ethereum based “Blockchain quorum" to tokenize gold bars. The process includes giving the gold bars a unique identity which can then be used between specific groups of people to trade gold without any hassle. Blockchain will be used to store the data of all the transactions.
It will boost the progress of the banking and finance sector and will create new opportunities due to its effectiveness in managing market liquidity. Before digging this technology further down, let’s first take a look at the basics.
What is Ethereum?
Ethereum is a blockchain based program that is basically developed to help the traders and other users actually to make and deploy decentralized applications.
Most people ask this common question, ”Isn’t this thing same as Bitcoin"? Well, we can say that it is, in a way, like bitcoin. But there are certain differences in how these two applications work. These two differ both in functionality and capability.
Bitcoin introduces peer to peer money transfers, and these transfers are decentralized. And bitcoin blockchain is used to track the transactions. While Ethereum is an open source platform and supports various decentralized currencies. We can develop any digital currency on Ethereum application. It is very flexible, and its scope is much wider than bitcoin.
Blockchain and blockchain quorum:
To put it simply, blockchain is the basic, wider network on which other applications like Ethereum and bitcoin are developed and used. It is open source, and everyone can enjoy its benefits to the fullest.
It is a ledger and records the data of transactions made in the form of bitcoin, Ethereum or any other cryptocurrency publically. This service is provided by many people called “miners" which make these transactions possible and in turn, earn something in the process. So, it creates an earning opportunity for many people.
Blockchain quorum allows a group of people to trade with each other privately and data is processed and stored by the system. Let’s take a look at the certain benefits of this blockchain quorum introduced by the JPMorgan bank to make gold buying and trading easier.
Benefits of this blockchain quorum:
This quorum will now be used to tokenize gold bars. This will not only enhance the liquidity in the global gold market, but miners will also be able to earn a “premium” for making the transactions happen. This premium is called “gas" in cryptocurrency’s language. Every transaction requires a certain amount of this “gas" in order to reward the miner for facilitating this process. Its amount is way less than the traditional maintenance costs, so, it makes this process more efficient and reliable for the gold traders.
Blockchain in banking:
This is just the beginning of the block chain’s use in the banking and finance sector. This blockchain quorum is not used to transfer the money, but it manages the inefficiencies in this process. This is a revolutionary step to increase marketing liquidity.
This hasn’t happened yet, but this type of blockchain quorums can really help various businesses by providing a secure financial connection between the concerned parties. Because businesses run on mutual trust and coordination.
Transforming the global trade:
The ultimate goal is to digitize the global trade and use the blockchain technology to its fullest potential and create more business opportunities for people.
The future of blockchain:
Instead of just making some cryptocurrencies and buying gold, blockchain can also be used in many financial sectors to improve the liquidity in transactions. Healthcare, Banking, and Aviation are some of these sectors which can be drastically enhanced by introducing blockchain in them.