MatrixONE co-founder Jason Xu: the blockchain dismal situation, JP Morgan and other Wall Street financial giants are in high-profile

 MatrixONE co-founder Jason Xu: the blockchain dismal situation, JP Morgan and other Wall Street financial giants are in high-profile

In November 28th, 2018 P.O.D New BlockTrend new potential block chain summit jointly sponsored by Odaily and the daily planet 36Kr group held in Beijing.

JPMorgan Private Bank Technical Director, MatrixONE co-founder Jason Xu shared the application block chain technology in Wall Street under the new business model”. Now, the block chain industry is dismal situation, but some of the heads of financial enterprises in Wall Street are actively using block chain technology to develop their products, such as Goldman Sachs, JP Morgan.

Jason Xu believes that in the past ten years, the block chain has proven that it can use this technology to provide credit function more effectively and more quickly, to solve the financial industry a lot of pain points, such as credit problems, on this basis, we need to use the blockchain technology to solve the privacy protection and security problems.

The following is the speech:

Thank you for the daily planet Krypton 36 to give me this opportunity, let me stand here on the block chain in Wall Street application. Let’s look at a few news, the first one is Morgan chase announced that it will use the Quorum card through to gold, Quorum block chain products JP Morgan team development based on Ethernet on the square, we will make further discussion on it next.

The second is October 18th Goldman and Galaxy Digital BitGO announced it would invest $15 million, BitGO is currently the largest provider of digital asset custody business.

The third is the world’s fourth largest Asset Management Co, managing assets of $7 trillion and 200 billion Fidelity. They announced in October 15th to set up a new digital Asset Management Co, the company provides digital asset custody and trade execution services.

Now why block chain industry very bleak situation, the head of the Wall Street company, including Goldman and so on will enter into this high-profile industry, because they saw the block chain technology to the impact of the financial sector will have a disruptive.

I am on Friday to return home, these days to block chain industry and traditional industry friends made some discussion, heard there is a called “blockchain empowerment”, that is the block chain will energize the traditional industries. The financial industry as a traditional industry, block chain will be energized to financial industry. One can hear Fu financial industry many people may immediately think of currency speculation, currency speculation is not energized, if speculation is currency, do not say “by” good.

In the past ten years, the block chain has proven that it can use this technology to provide credit function more effectively and more quickly, to solve the financial industry a lot of pain points, such as credit problems. In fact, only solve the credit problem is not enough, on this basis, we also need to block the chain to solve more problems to us, for example, privacy protection, security funds and so on, today we talk mainly on these two points.

First look at JP Morgan Quorum, a coalition of chain branching off the etheric fang. Ethernet square itself is already well distributed and intelligent platform contract books. Quorum on the basis of increased privacy protection elements, so we can say that Quorum is a solution to the privacy preserving distributed books and intelligent platform in this contract, the right edge of the chart is a simple Quorum architecture, which consists of three modules, one is the Quorum node, this node is developed based on Ethernet square node the. In addition it adds some new features, including consensus update mechanism, can improve the efficiency of the consensus. Another is in the P2P transmission, the P2P transmission of traditional Ethernet square is no access control, Quorum can increase the access control function, transaction only transfers between nodes are permitted.

Another is a unique function, namely the state of public affairs and private affairs storage of isolation. Another point is that the revised checking logic block, which can support the private affairs.

The architecture of Quorum second module called Costellation transaction manager, its main function is the transmission and management of private affairs, including the private affairs of payload in local storage, communication between and with other transaction manager, it uses Enclave to private data encryption and decryption.

The third module is called Costellation Enclave, its main function is to encrypt and decrypt data.

The picture on the left, a good indication of the status of public and private data stored in the Quorum. Each node has two sets of public and private data system, data communication between all nodes in public, so the public data of all nodes are the same. Private data is transmitted only between nodes is permitted, the private data of different nodes may have different. For example, green affairs occurred in 1 participants and 2 participants between the private data of this transaction only exists in 1 participants and participants in the private data system and monitoring node in 2.

Based on the above, we can see that the characteristics of Quorum can be attributed to the following:

Privacy of transactions and contracts, this is the most unique feature of Quorum. This is very important for the financial industry.

A variety of consensus based on voting mechanism

QuorumChain (2 version)

RAFT

IBFT

License management node / network

Higher performance, this is achieved through consensus mechanism

We will see an example, based on the relationship between the time I will not tell the detailed examples, we can see, the fund manager can open their own position information to some customers own. This process is how, the fund manager positions intelligent information to write a contract, sent to the Quorum node A to the transaction manager A, to encrypt and decrypt data using Enclave A, and passed to the transaction manager, A manager here only open position information to the B, so it only to be passed to the transaction Manager B. After the transaction manager B customer receives information, using B client private key to decrypt the information, and stored in the B storage space. When the client B in the transfer positions information can get it.

Another example is the opposite of unauthorized clients C, A transaction manager is not a transaction passed to the object manager C, when once the customer requested the transfer to C position information, the transaction manager C in the investigation of its local storage will return a result, here you need not the position information.

We just talk about the Quorum technique to improve the privacy protection, another point we mentioned before, in the custody business, is actually very important pain point is the safety of funds, including ensuring user key security.

The relation between the time we might be a little bit faster, want to talk about today is the secure multi-party computation, this was first proposed by Turing Award winner, China Academy of Sciences Professor Yao Qizhi in 1982 years, its philosophy is under the premise of ensuring each participant input data privacy, to calculate the agreement the function, and the corresponding output. To provide a set of solutions for this private key management of digital assets.

At present the number of private key management pain points, one is to the center of the management, the user threshold is high, the operation is more complicated. Another enterprise is unable to recover the private key for users. One solution is to use multiple signatures, but the availability of relatively poor, weak compatibility.

If is the center of the enterprise trust, there is no way they prove that it is innocent, I put your private key with me, how do I ensure your private key is not compromised.

The real solution is that I said secure multi-party computation, all the private key will be divided into pieces, stored in each node, a node does not exist all the private key. Any node or some nodes in the attack will not cause the private key leakage, solve the high security problem.

Now look at the comparison of MPC with other private key management system, we see that the horizontal axis is available, from low to high, the vertical axis is safety, from low to high. Special hardware or TEE high security, but the availability will be low, and portability is very poor. The software wallet is highly available, but it is not up to the requirements of safety. Multi signature and secure multiparty computation, the security and availability of more than signing wallet will be higher.

Another Quorum is paid in the Wall Street application, JP Morgan has launched a cross bank payment platform, mainly is the payment system management between banks. It uses distributed books information sharing problem, can greatly improve the efficiency, at the same time with zero knowledge authentication and encryption technology to ensure data and ensure data privacy while sharing.

I report here today, thank you!

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