Blockchain developer AMIS (帳聯網路科技) yesterday announced that its new consensus algorithm has been adopted by JPMorgan Chase & Co’s Ethereum-based blockchain to help meet the US giant’s need for high throughput processing using the distributed ledger technology.
AMIS and JPMorgan are founding members of the Enterprise Ethereum Alliance, which develops the Ethereum blockchain.
Unlike public blockchains — such as the one that underpins bitcoin — Ethereum can produce both public and private blockchains, which is more suitable for enterprises such as JPMorgan as it develops Quorum, a private blockchain to process interbank and cross-border transactions.
Dubbed the Istanbul Byzantine fault tolerant consensus protocol (Istanbul BFT), the new tool markedly reduces the complexity and energy consumption of verifying transactions made on the blockchain, compared with conventional blockchains that use “proof of work” methods.
In public blockchains, the proof of work is often competitive and driven by financial gains for the participants in the form of “blockchain mining,” which requires heavy computation work.
Under the new protocol, verification is conducted by a clique of pre-approved nodes with “proof of authority,” AMIS chief executive officer Alex Liu (劉世偉) said.
Although the new protocol does not bring immediate financial gains for AMIS, it is an important open-source contribution to the Enterprise Ethereum Alliance, the most active community of blockchain technology developers, Liu said.
“The protocol is a vital part of efforts aimed at building the next evolution of the Internet of Value, similar to the creation of the TCP/IP protocol earlier in the history of computer networks,” Liu said.
It is hoped that blockchain will replace the infrastructure for financial transactions, which is strewn with redundant agencies across disparate incompatible systems, resulting in slower processing speeds and higher fees, Liu said.
JPMorgan is also considering the benefits of adding automated regulatory filings to yield compliance cost savings, company developers said via a Web stream at a news conference in Taipei.
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