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JP Morgan Chase, the largest bank in the United States by a long shot, shocked the financial community on Thursday by launching its own blockchain product. For the purpose of this article, JPM Coin will not be referred to as a “cryptocurrency.” JPM CEO Jamie Dimon is a frequent target of derision in the crypto community, owing to his outspoken negativity as regards Bitcoin and the wider crypto markets.
Dimon has frequently said that while he’s not a fan of Bitcoin, he believes the blockchain can be a boon to finance. Despite his years-long tirades, JP Morgan has been in the crypto space for years, reportedly handling Bitcoin trades while Dimon goes on television to decry Bitcoin a “fraud.”
JPM COIN HIGHLIGHTS DEFINITION OF “CRYPTOCURRENCY”
“Cryptocurrency” has many definitions in the world.
Everipedia defines it as “a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets.” Notice, nothing mentioned in the base definition about mining. Tokens, apparently even tokens with reversible transactions, can allegedly be cryptocurrencies.
But perhaps this definition doesn’t do justice to the nature and spirit of cryptocurrency. Let’s look at the properties of Bitcoin as opposed to the US Dollar. Bitcoin is meant to be digital cash, as outlined in the whitepaper. Transactions cannot be “pulled” in the base protocol, as they can with fiat bank accounts and credit cards (which is the basis of most fraud). The nature of “cash” is that he who holds it, essentially owns it. It’s really no different with fiat, except you sometimes need lawyers to ensure your ownership. The bank may steal or lose your funds. In Bitcoin, as long as you hold your keys, you own your money. You “become your own bank.”
Two other aspects of the Bitcoin definition are important, as well. Bitcoin is decentralized, meaning there is no central point of control. Instead of a complicated command structure of account representatives and middlemen, Bitcoin operates on a set of rules called consensus. If a transaction meets these rules, it is included in the blockchain, at its heart a record of Bitcoin transactions.
CENSORSHIP-RESISTANCE AND IMMUTABILITY DEFINE CRYPTOCURRENCY
Which brings us to one of the most important aspects of Bitcoin from early on: it is censorship-resistant. For the purposes of modern banking, a crypto-token which passes this last is actually impossible. “Censorship” as applied to money means, in part, that it complies with money laundering and political requirements. For example, it’s illegal for Americans to do most types of business with Iranians. It’s technically illegal to send money to Iranians using Bitcoin, but quite possible. It’s not easy at all to send a bank wire to Iran, however, which is part of why they’ve established their own cryptocurrency network.
The question, then, is what defines a cryptocurrency? Is it simply the use of cryptographic protocols to secure transactions, or is it the above-mentioned properties which make Bitcoin, well, Bitcoin?
The author is too long in this game to mince words. If your token doesn’t have the above properties – immutable, cash-like, and resistant to the petty despots of the world – then it is not a cryptocurrency. Point-blank.
Source (https://www.ccn.com/why-jp-morgans-bitcoin-killer-isnt-even-a-real-cryptocurrency)