JPMorgan Adds Privacy Features to Ethereum-Based Quorum Blockchain

JPMorgan has developed a new privacy feature for ethereum-based blockchains that hides both the sender and the amount in a transaction.

AccessTimeIconMay 28, 2019 at 8:00 a.m. UTC
Updated May 9, 2023 at 3:03 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

JPMorgan Chase’s blockchain team has developed a privacy feature for ethereum-based blockchains, obscuring not only how much money is being sent but who is sending it.

Revealed exclusively to CoinDesk, JPMorgan has built an extension to the Zether protocol, a fully decentralized, cryptographic protocol for confidential payments, compatible with ethereum and other smart contract platforms and designed to add a further layer of anonymity to transactions. The New York-based financial institution will open-source the extension Tuesday, and is likely to use it with Quorum, the bank's homegrown, private version of ethereum.

  • How NEAR Enables Multichain Access From One Account
    00:56
    How NEAR Enables Multichain Access From One Account
  • Why the NEAR foundation Chose Eigenlayer as a Security Partner
    00:54
    Why the NEAR foundation Chose Eigenlayer as a Security Partner
  • Judge Kaplan Had 'No Love' for Sam Bankman-Fried, Legal Expert Says
    07:08
    Judge Kaplan Had 'No Love' for Sam Bankman-Fried, Legal Expert Says
  • How Bitcoin and Ether's Options Contracts Combined Expiry Could Spike Volatility
    01:11
    How Bitcoin and Ether's Options Contracts Combined Expiry Could Spike Volatility
  • Zether, which was built by a group of academics and financial technology researchers including Dan Boneh from Stanford University, uses zero-knowledge proofs (ZKPs), a branch of mathematics which allows one party to prove knowledge of some secret value or information without conveying any detail about that secret.

    Explaining what the new extension does, Oli Harris, JPM’s head of Quorum and crypto-assets strategy, told CoinDesk:

    “In the basic Zether, the account balances and the transfer accounts are concealed but the participants' identities are not. 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.”

    JPMorgan has had a busy year in the blockchain space, and not just with its headline-grabbing plan for an internal, price-stable cryptocurrency called JPM Coin.

    Just as importantly, the firm attracted some 220 banks to its Quorum-based Interbank Information Network and most recently completed a load of integration work with Microsoft Azure as JPM continues to prepare Quorum to be spun out and exist in the wild as an open-source protocol.

    Harris pointed out that Zether’s confidential payments architecture incorporates an account-based approach employed by ethereum, as opposed to the unspent transaction output, or UTXO-based approach, which the bitcoin client uses. The UTXO is also a feature of the privacy-oriented cryptocurrency zcash, which the original ZKP component of Quorum was based on.

    In this way, the extension could benefit not only users of Quorum, but also enterprises building on top of other ethereum variants – or, conceivably, businesses leveraging the public ethereum chain.

    Consortium confidential

    Keeping all facets of transactions between banks and other confidential could be a boon for projects like ethereum-based Komgo, for instance, which involves trading in the energy space.

    “When we think about the community building on top of Quorum,” said Harris, “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.”

    Harris, whose job is to strengthen Quorum efforts inside the bank and beyond, added: “When we look at our own JPMorgan applications [the extended version of Zether] will be one choice of many that we will be looking at.” 

    The work to make transactions more confidential on Zether could also be used to fine-tune Quorum for deployment inside enterprise consortia, making the extension another step towards hardening the protocol for a long-contemplated spin-out from the bank.

    One drawback of complex zero-knowledge proving schemes is the amount of computation they eat, potentially slowing down blockchains.

    But Harris said the extra dose of cryptography to obfuscate participant identities didn’t appear to have that effect with Zether, concluding:

    “The performance is quite good; we had done multiple iterations to improve it and we are doing the verification in solidity smart contracts. We’ll be including in our report the performance measurements for proving and verification.”

    JPMorgan Chase image via Shutterstock

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.