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Offline hasher

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Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« on: December 10, 2013, 11:16:56 PM »

http://letstalkbitcoin.com/jpmorgan-chase-building-bitcoin-killer/#.UqegtCg8w7z

Chase-ing Bitcoin: Is JPM Preparing To Unveil Its Own Electronic Currency?

If you can't beat 'em, join 'em, copy 'em, and then beat 'em. While everyone's attention has been glued to Bitcoin (and its various smaller and less viable for now alternative digital currencies), JPMorgan has submitted a patent which appears to set the scene for a competing centralized network to Bitcoin. As LetsTalkBitcoin noted first, the "Method and system for processing internet payments using the electronic funds transfer network," states that Chase's technology is a "new paradigm." Moreover that it permits the creation of "virtual cash" (also referred to as "web cash") with a "real-time digital exchange of value."

Via eCreditDaily,

Imagine paying for some product in a transaction directly with the seller that doesn’t include a costly third-party fee or the revelation of a personal account number — the current components that comprise credit card and debit card purchases. Imagine this system with a “real-time digital exchange of value.” And imagine that you can archive all the transactions in a personal digital wallet, with its own “Internet Pay Anyone (IPA)” account and inherent safeguards built-in, something that you could call “Virtual Private Lockbox (VPL),” according to JPMorgan’s patent.
 
If this “web cash” system — as JPMorgan Chase calls it — seems familiar, it should. It smacks of the peer-to-peer transactions of bitcoins and other cryptocurrencies that increasingly are making the world’s biggest banks uneasy about the future of e-commerce.
 
The patent, first revealed by LetsTalkBitcoin.com, is a fascinating look into JPMorgan’s veiled outlook on the evolving but growing bitcoin universe, and other more widely-accepted payment systems.
 
JPMorgan’s proposed system offers another eerily familiar component, which seemingly mimics “blockchain,” a publicly available, permanent ledger of bitcoin transactions.
 
...
 
Without naming the virtual currency or any competing payments system by name, the bank takes a swipe at the crytocurrency model.
 
“None of the emerging efforts to date have gotten more than a toehold in the market place and momentum continues to build in favor of credit cards,” according to Chase’s patent application published by The United States Patent and Trademark Office (USPTO). It was filed August 5th, 2013.
 
...
 
JPMorgan Chase sees “a new marketplace” emerging for “low dollar, high volume, real-time payments with payment surety for both consumers and producers.”
 
As LetsTalkBitcoin.com points out, “Bitcoin has also been ballyhooed for it use with micro-payments and payments under ten dollars due to its zero to negligible fee structure.”
 
JPMorgan Chase: “The present invention further enables small dollar financial transactions, allows for the creation of ‘web cash’ as well as provides facilities for customer service and record-keeping.”
While naming protocols for these vitual currencies is uncertain, we can't help but think "Dimons" would be appropriate as the web cash becomes increasingly more trusted.

 

LetsTalkBitcoin discusses how JPMorgan's proposed system works:

Under The Hood: Internet Pay Anyone
 
“…The structural components to the system of the present invention include:
 
    a Payment Portal Processor; a digital Wallet;
    an Internet Pay Anyone (IPA) Account;
    a Virtual Private Lockbox (VPL);
    an Account Reporter;
    the existing EFT networks;
    and a cash card.
 
“…The Payment Portal Processor (PPP) is a software application that augments any Internet browser with e-commerce capability. The PPP software sits in front of and provides a secure portal for accessing (finking to) the user’s. Demand Deposit Accounts (DDA) and IPA accounts. The PPP enables the user to push electronic credits from its DDA and IPA accounts to any other accounts through the EFT network…”
 
“…The {technology} …includes freely publishing the payment address and making it available to users of an internet portal or search engine…”
 
“…Currently, all Internet transactions use “pull” technology in which a merchant must receive the consumer’s account number (and in some cases PIN number) in order to complete a payment. The payment methods of the present invention conversely use “push” technology in which users (consumers or businesses) push an EFT credit from their IPA or DDA accounts to a merchant’s account, without having to provide their own sensitive account information…”
 
A New Paradigm
 
“…The present invention represents a new paradigm for effectuating electronic payments that leverages existing platforms, conventional payment infrastructures and currently available web-based technology to enable e-commerce in both the virtual and physical marketplace. The concept provides a safe, sound, and secure method that allows users (consumers) to shop on the Internet, pay bills, and pay anyone virtually anywhere, all without the consumer having to share account number information with the payee. Merchants receive immediate payment confirmation through the Electronic Funds Transfer (EFT) network so they can ship their product with confidence that the payment has already been received. The present invention further enables small dollar financial transactions, allows for the creation of “web cash” as well as provides facilities for customer service and record-keeping…”
and the implications:

I view this technology and patent application as an overwhelming good thing.  Bitcoin is driving Innovation.  It has been said that credit cards and the legacy banking system in use today was never meant for use over the internet.  Chase’s updated Internet Pay Anyone technology appears to come head to head with Bitcoin.
 
...
 
While it remains to be seen if this technology is a “Bitcoin Killer,” other players such as eBay/PayPal (which have been riding under Bitcoin’s coattails through marketing gimmicks) ought to pay close attention to this emerging technology.  If Bitcoin does get a “toehold” in the marketplace, we just might see this technology activated.  The Chase is on.
Finally, the patent application itself (source USPTO):

http://www.zerohedge.com/news/2013-12-10/chasing-bitcoin-jpm-preparing-unveil-its-own-electronic-currency

Offline hasher

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #1 on: December 10, 2013, 11:24:32 PM »
Article on Coindesk:
http://www.coindesk.com/jp-morgan-chase-patent-digital-payment-system/
JP Morgan Chase is building its own digital currency for use with digital ‘wallets’, it has been reported.

The banking giant filed a patent application relating to a “method and system for processing internet payments using the electronic funds transfer network”.

Let’s Talk Bitcoin claimed the patent application was actually filed on 5th August, and published 28th November. The application’s abstract says:

“Embodiments of the invention include a method and system for conducting financial transactions over a payment network.

The method may include associating a payment address of an account with an account holder name, the account residing at a financial institution and the associated payment address of the account configured to allow withdrawals by the account holder only and to allow a plurality of deposits to be made at different times.

The method further includes freely publishing the payment address and making it available to users of an internet portal or search engine. The method further includes receiving data over a network identifying a deposit to be made to the account, assigning the deposit to the account using the payment address, and notifying the payer of the assignment.

At least one directory is used for associating the account holder with the payment address.”

Direct payment addresses, freely publishing such addresses for deposits over data networks… apart from the ‘account residing at a financial institution’ part, many might be familiar with a similar system already in widespread use.

In its lengthy application, JP Morgan Chase has avoided mentioning bitcoin at all, though it did allude to the fact that “new Internet payment mechanisms have been rapidly emerging”.

Of course, it could be referring to PayPal, or one of the many retail loyalty point systems attempting to become their own kind of currency. But the application also notes the drawbacks of these existing systems, such as the need to enter PINs, high processing fees, and shortage of consumer-to-consumer payment methods.

Before anyone says “prior art”, the application also mentions “prior art electronic Wallets”, but refers to software that stores existing account information rather than being self-contained.

Other highlights from the application include:

“A computer-implemented method of providing an anonymous payment from a mobile device to a payee device to enable an electronic payment between a payer and a payee without provision of an account number or name from the payer…”

and:

“payment message including a transaction ID; transmitting the transaction ID to the payer, the transaction ID permitting the payer to initiate transmission of a payment amount; generating a payment authorization message from the payer, the payment authorization message including a payment amount to be tendered to the payee and the transaction ID, the transaction ID allowing identification of the payment, thereby enabling redemption of the payment amount after the payee receives the transaction ID.”

Is this anything for bitcoin users to be concerned about? Is Chase, as the headlines said, ‘building a Bitcoin Killer?’

It’s no secret that the Internet, and the world at large, needs better payment options. The legacy system of credit cards and international wire transfers is being shoehorned into the Internet like Cinderella’s ugly stepsister into a glass slipper, often with the same unattractive results.

PayPal introduced the world to the concept of easy trans-currency payments, but also to those of account freezes, verification processes and 3% flat transaction fees.

But supposing Chase decided to use the patent to build its own cryptocurrency, would users flock to it? The initial reaction to Chase’s patent application from bitcoin fans was to point out a centralized system controlled by a large financial institution is hardly what cryptocurrency users want.

What about everyone else? Maybe all large financial institutions need to do is offer something identical to bitcoin, but without all the volatility, black market fearmongering and exchange shutdowns. Large banks, despite actions and events over the past five years, are still seen by most as safe places to store wealth.

Banks have also tried repeatedly to lock customers and companies out of the financial system for using bitcoin (including Chase itself), and perhaps having their own competing digital currencies would give them extra incentive to do so.

Holding a patent could also enable Chase to slow down or even stifle development of services relating to other digital currencies.

For those who don’t understand decentralization or its advantages, a controlling hand might even be seen as desirable. Neil Irwin of the Washington Post echoed this view with his ‘Bitcoin Needs a Central Banker‘ article in November.

Everyone from alt-coin developers to large corporations will probably try to build a better bitcoin in the coming years, and some users will be looking for one. Whether they succeed could well depend on more than just innovative features.

Offline devilfish

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #2 on: December 11, 2013, 01:28:05 AM »
Only flicked throw this as I was pretty amazed at the audacity of JPMorgan, I guess they might become what itunes is to bittorrent if they market this correctly. I would have thought they'd have vested interests in the current electronic banking industry who wouldn't want to loose grip of the market they control but anyway...
BTC: 1MqCxQ2qD7ZuS3ELFY43wfaBTbA2XkYwDP
PTS: PiuFEJHz6zScALgPWzcu2SDKtWJW4cnUFi
XPM: Af5qzgsEwWaHZdGUq8dUoHkhmH4XBmnGW9

Offline Stan

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #3 on: December 11, 2013, 03:59:25 AM »
Only flicked throw this as I was pretty amazed at the audacity of JPMorgan, I guess they might become what itunes is to bittorrent if they market this correctly. I would have thought they'd have vested interests in the current electronic banking industry who wouldn't want to loose grip of the market they control but anyway...

The biggest, insurmountable, competitive advantage that Bitcoin has is that it is not JP Morgan.   :)
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline titulng

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #4 on: December 11, 2013, 05:40:59 AM »
i donot thik so.

Offline jan

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Offline devilfish

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #6 on: December 12, 2013, 09:09:45 AM »
The biggest, insurmountable, competitive advantage that Bitcoin has is that it is not JP Morgan.   :)

LOL didn't want to say anything, but yeah pretty much. Love it when corporations miss/ignore the point purely to turn a profit...
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Offline stuartcharles

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #7 on: December 12, 2013, 12:16:23 PM »
The biggest, insurmountable, competitive advantage that Bitcoin has is that it is not JP Morgan.   :)

LOL didn't want to say anything, but yeah pretty much. Love it when corporations miss/ignore the point purely to turn a profit...

To us bitcoin not being JP morgan is the advantage but are the masses bothered? I personally I doubt it. I dont like this development at all, and with everything open source we hand all development and future development over on a plate. Not that i don't want it that way, it wouldn't have got where it is without the trust of open source. Bitcoin has the advantage of being borderless somthing JP morgan will not achieve lets home thats enough to stop it becoming the itunes of torrents (great analogy Devilfish)

Anyone think of any other advantages that will appeal to the masses? I guess the head start is a big one.

Offline Stan

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #8 on: December 12, 2013, 02:49:19 PM »
The biggest, insurmountable, competitive advantage that Bitcoin has is that it is not JP Morgan.   :)

LOL didn't want to say anything, but yeah pretty much. Love it when corporations miss/ignore the point purely to turn a profit...

To us bitcoin not being JP morgan is the advantage but are the masses bothered? I personally I doubt it. I dont like this development at all, and with everything open source we hand all development and future development over on a plate. Not that i don't want it that way, it wouldn't have got where it is without the trust of open source. Bitcoin has the advantage of being borderless somthing JP morgan will not achieve lets home thats enough to stop it becoming the itunes of torrents (great analogy Devilfish)

Anyone think of any other advantages that will appeal to the masses? I guess the head start is a big one.

What will convince the masses are things to come that have only been foreshadowed. 
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline MrJeans

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #9 on: December 13, 2013, 10:50:06 PM »
If JP Morgan launched a new open source crypto currency (JP coins) I would be all for it. But its is offensive that JP Morgan would try to patent their version of what is open-source software. They obviously don't get it. 

Having said that, i believe that the masses would much rather make use of JP Morgan's system rather than alt currencies. The masses do not understand the concepts of trustless, open source, decentralized, not for profit systems (I've lost count of the number of heated debates I've had with people about them thinking Bitcoin is a ponzi scheme. Don't get me started on how they react when I explain DACs haha). The masses would prefer a trust based system in which they would select which company/brand they trust the most.

For the long term, Stan's words sum this all up rather nicely:
"The biggest, insurmountable, competitive advantage that Bitcoin has is that it is not JP Morgan."


JP Morgan's currency may suffer for the following reasons:

  • They are a for profit company and the overall fees of using the service would likely be higher than that of bit coin.

    If they keep their fees too low, won't this cannibalize their current market and reduce profitability?

    I foresee high levels of regulation here, thus lots of administration, which again… will be paid for by their users.

    If accounts get hacked/funds get stolen it may reflect badly on the whole company. Is JP Morgan willing to take this risk?

    Can the JP Morgan developers keep up with all the open source developers and new innovations coming freely to market?

    They just don't get it.

They may do well because the masses trust them.

Can people see other reasons why they might do well or do badly?

Now please excuse me while I go and patent Ubuntu OS.

Offline Stan

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #10 on: December 14, 2013, 01:29:29 AM »
If JP Morgan launched a new open source crypto currency (JP coins) I would be all for it. But its is offensive that JP Morgan would try to patent their version of what is open-source software. They obviously don't get it. 

Having said that, i believe that the masses would much rather make use of JP Morgan's system rather than alt currencies. The masses do not understand the concepts of trustless, open source, decentralized, not for profit systems (I've lost count of the number of heated debates I've had with people about them thinking Bitcoin is a ponzi scheme. Don't get me started on how they react when I explain DACs haha). The masses would prefer a trust based system in which they would select which company/brand they trust the most.

For the long term, Stan's words sum this all up rather nicely:
"The biggest, insurmountable, competitive advantage that Bitcoin has is that it is not JP Morgan."


JP Morgan's currency may suffer for the following reasons:

  • They are a for profit company and the overall fees of using the service would likely be higher than that of bit coin.

    If they keep their fees too low, won't this cannibalize their current market and reduce profitability?

    I foresee high levels of regulation here, thus lots of administration, which again… will be paid for by their users.

    If accounts get hacked/funds get stolen it may reflect badly on the whole company. Is JP Morgan willing to take this risk?

    Can the JP Morgan developers keep up with all the open source developers and new innovations coming freely to market?

    They just don't get it.

They may do well because the masses trust them.

Can people see other reasons why they might do well or do badly?

Now please excuse me while I go and patent Ubuntu OS.

There is another reason for patenting something we often forget about: 

...to keep anyone from using it at all.

Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline MrJeans

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Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #11 on: December 14, 2013, 11:01:55 AM »
Good point.
But then prior art starts screaming out at me.
It may give them some leverage but they would have to sue way too many individules, like millions.
Interesting to see what happens here. Being in the biotech industry, I have seen crazier patents go through. And it was usealy because the patent office did not understand the technology.

Offline masterofmyself

Re: Goliath spotted David / JPMorgan Chase Building Bitcoin-Killer
« Reply #12 on: December 16, 2013, 07:53:30 PM »
Yeah, prior art would come into play heavily against JP Morgan's patent.  Also, the Supreme Court could be reconsidering its stance on allowing software patents...

http://reason.com/archives/2013/12/13/kill-off-software-patents

It really sucks we're all subject to the whimsical, sociopathic opinions of a small group of people, but to stop allowing software patents would be a step (albeit a small one) in the right direction. 

« Last Edit: December 16, 2013, 07:58:42 PM by masterofmyself »


Offline MrJeans

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