JPMorgan’s Blockchain Team Is Exploring Ethereum Privacy Technology ‘AZTEC’ With Zero-Knowledge Proofs (ZKPs)
JPMorgan Is Currently Testing Ethereum Privacy Technology
Jamie Dimon, the CEO of JPMorgan Chase, one of the largest banks in the world, seems to hate Bitcoin but his company just loves the blockchain so much. According to new reports, JPMorgan, after launching its own blockchain-based digital currency is now set to test a privacy technology powered by Ethereum called zero-knowledge proofs (ZKPs).
These ZKPs can be used to allow a person to use a set of data and prove that a statement is true without revealing the actual data which is being evaluated. Most blockchains, like Bitcoin, make all the validation process public and you can see, with some effort, who is sending money where.
Transparency is not so cherished by large banking institutions, though, so now JPMorgan is set to use Quorum, a private version of Ethereum, in order to solve this blockchain privacy issues with the technology.
The global bank is currently testing two solutions, the Quorum-based one and another ZKP`solution called AZTEC, which was developed by a company in London. This protocol has the goal of allowing blockchain encryption with more efficiency and considerably lower costs than some other products in the market.
Tom Pocock, AZTEC’s CEO, has talked to the crypto media and affirmed that JPMorgan is testing the software. An insider from JPMorgan has told Coindesk, which reported on this story, that the Quorum team of the bank is looking at AZTEC and they are trying to industrialize this solution.
Coindesk has described JPMorgan and AZTEC as an “odd couple”, mostly because the bank has only worked with permissioned or gated ledgers so far and not with something like this tech yet.
On one hand, there is the company which launched JPM Coin and is about control, on the other, we got AZTEC, which wants to bridge the gaps that separate what is public and private using its tech.
At the moment, one of the main goals that AZTEC has is to explore new ways to encrypt data which will make the whole process faster and bring out the best of both worlds by doing it. The company wants to take out the things that you normally find on a private blockchain and the bring the best of them all into a public blockchain.
A Bridge Between What Is Private And Public
The AZTEC protocol was already used by the Ethereum community before. Maker DAI, an ETH-based stablecoin, has already used it in the past in order to make Maker DAI tokens more confidential in their transactions.
AZTEC’s CTO, Dr. Zac Williamson, has affirmed that AZTEC is very different from how Quorum works because Quorum combines its own tech a privacy system called Constellation, and it uses a kind of permission to create some level of privacy.
However, the key to make AZTEC much more efficient is that it uses a special type of ZKP that is called range proofs and that they are combined with some other kinds of cryptographic commitment schemes.
Summing it up, this is a very different system that is different from what most companies are doing now and it alike Bitcoin’s UTXO model, in which the inputs are deleted as soon as the transaction is approved and finished.
According to Dr. Williamson, the AZTEC system will let a user send a ZKP that will prove that some sum of the input notes is equal to the outputs and this will confirm the transactions without nobody actually needs to know what is inside any individual transaction. This, he affirms, works mathematically and prevents double spending.
This way, the company believes that the AZTEC system will let the users make transactions which are faster and cost less money. However, the team is not solely focused on scaling at the moment and it is more focused on creating the core system yet.