It is believed that the finance industry will be among the first to face disruption from blockchain. It is also anticipated that Blockchain-related technologies will potentially bring major changes to the financial service industry. However, the adoption process by the organizations in the industry is slow, as they would like to properly understand and implement it.
Quorum, which was created in 2016 by J.P. Morgan, seeks to accelerate common adoption of blockchain by the financial industries. It was designed to try to deal with the key concerns that financial institutions had regarding b
lockchain such as access, transparency, and control of information. Quorum Blockchain was developed as a permission version of Ethereum in order to clear and settle derivatives.
Cost Reduction And A Simplified Process
It is one of the initiatives by large banks on the blockchain to try to reduce costs and simplify processes such as international payments and settlement of securities trade. JP Morgan announced in October 2017 that it would also use the Quorum blockchain to build an interbank payment system in collaboration with Australia and New Zealand Banking Group Ltd and the Royal Bank of Canada.
Quorum was modeled after the Ethereum Go client, which is similar to similar to Ethereum but has four distinct features: voting-based consensus mechanisms, a higher performance, network and peer permissions management and an increased transaction and contract privacy. Quorum is open-source platform, which means that its code is completely free and can be redistributed or modified.
In March, there were reports that the JP Morgan was considering making the quorum blockchain project into an independent entity in efforts to increase its appeal and attract more customers who might turn away from the project if they are JP Morgan’s competitors. However, it is still unclear whether quorum would have a better functionality as an independent entity.
JPMorgan’s head of Blockchain initiatives Umar Farooq, in an interview with Reuters said that one of the reasons for spinning off Quorum is the excess of customer service requests. He further added that some unnamed financial institutions have shown interest.
JP Morgan’s spokesperson, Brian Marchiony, told Reuters in an email “we (the company) continues to believe distributed ledger technology will play a transformative role in business which is why we are actively building multiple blockchain solutions”. He however declined to comment speculations about the Quorum’s spin off.
Banking sector participants such as JPMorgan Chase and the National Bank of Canada have previously carried out tests on the Quorum Blockchain platform after its development in order to make the process of issuing financial instruments more efficient.
Financial institutions that are trying to improve their financial infrastructure could benefit from switching to the system. The network has a lightweight shift and therefore future incorporations of the code from Go Ethereum base could be easier. Quorum is a right step towards financial implementation of blockchain.