J.P. Morgan sells Quorum to ConsenSys, but others say it was ditched
Depending on who you ask, it's either good news for enterprise Ethereum or the exact opposite.
Previously this week, J.P. Morgan sold its Quorum blockchain platform to ConsenSys, an Ethereum-focused accelerator, lobbying and investment company. Quorum is a permissioned variant of Ethereum, built by J.P. Morgan for enterprise use.
At the same time, J.P. Morgan reportedly made a strategic investment in ConsenSys.
"We have acquired the Quorum IP, J.P. Morgan has made a strategic investment, and there is a commercial arrangement to continue to support J.P. Morgan in their projects," said ConsenSys founder Joseph Lubin.
Two sides of the story
From one angle this could bode well for Ethereum, suggesting that it will see use as a public base layer blockchain for banks and other businesses to tap into through their own permissioned networks like Quorum. This is a popular vision of the future.
But from another it's the exact opposite.
Former J.P. Morgan blockchain lead Will Martino suggested to CoinTelegraph that this is actually J.P. Morgan dumping a dud that wasn't going anywhere in an effort to recoup some costs, while ConsenSys picked it up mostly for marketing purposes.
Since leaving J.P. Morgan, Martino founded Kadena, a theoretically infinitely scalable proof-of-work smart-contract-oriented public blockchain.
"Quorum was a real attempt at making Ethereum technology stick in an industrial setting. But it's being re-homed and I really don't think there's going to be a lot of progress down the line from ConsenSys. From my point of view, I think they're mostly buying the brand and being able to just use the Quorum trademark and intellectual assets from that point of view for marketing," he said.
The reason Quorum is a dud is that Ethereum is just an innately unscalable foundation for permissioned blockchains, Martino said.
This isn't noticeable on public blockchains, but on permissioned chains when other obstacles are stripped away, the nature of the Ethereum Virtual Machine puts a cap on possible network throughput.
As Martino said:
"If J.P. Morgan, one of the biggest companies ever, can't drive adoption, even when they have a great internal use case, you have to ask yourself 'why'? And my answer to that is the technology is just fundamentally limited. And if you go and talk to other large system integrators, large consultancies, you'll hear very, very similar things. So long as you don't have someone who holds a lot of the Ethereum tokens as the head of blockchain for the company, you're going to find that people say: 'We have tried using Ethereum, it just doesn't work'."
It's a pretty stark warning. And with enterprises expected to drive a lot of future blockchain adoption, it's probably worth paying attention to both sides of the story.
Apropos to which: Kadena is going to hit the stage at Smart Contract Summit #0 on 28 August at 8:40am EDT, joining a panel with representatives from Oracle and Microsoft to discuss "How Enterprise is Adopting Smart Contracts".
At the same time, Ethereum is going to be... well... everywhere all at once.
Enterprise preferences are still a big question mark in most predictions of the future of blockchain.
Disclosure: The author holds cryptocurrencies including KDA at the time of writing
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