The software development team at J.P. Morgan Chase, the world’s sixth largest financial institution with $30 trillion of assets under custody, created a new privacy feature for  Ethereum protocol-based blockchain networks.

The recently developed privacy feature allows users to hide transaction details including the amount being transferred and the address of the sender.

According to CoinDesk, J.P. Morgan’s software design team has developed an extension to the Zether protocol, which specifies how to implement a confidential Ethereum-based payment system. The investment bank’s Zether protocol extension is reportedly compatible with several other smart contract-enabled platforms (not just Ethereum).

On May 28, 2019, the New York-based financial institution revealed that it had open-sourced its latest privacy-oriented solution. J.P. Morgan’s management also mentioned that it would most likely be integrating the new privacy feature with its proprietary permissioned Quorum blockchain, which was developed using the Ethereum protocol.

As noted by J.P. Morgan’s distributed ledger technology (DLT)-focused development team, the investment bank’s newly designed privacy solution has been created by several FinTech researchers including Stanford University computer science professor Dan Boneh.

Notably, J.P. Morgan’s DLT-based privacy feature uses zero-knowledge proofs (ZKPs), which only disclose as much information as is absolutely necessary to verify certain details related to transactions.

Commenting on how the new Zether-based privacy extension works, Oli Harris, the Head of Quorum and Cryptoassets at J.P. Morgan, remarked:

“In the basic Zether, the account balances and the transfer amounts are concealed but the participants’ identities are not necessarily concealed. 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.”

Harris also explained that Zether protocol’s privacy-focused payments architecture uses an account-based system, which is similar to how the Ethereum network manages transactions. The transaction processing method is different from the unspent transaction output (UTXO)-based system that is used by Bitcoin (BTC).

In addition to launching a DLT-enabled privacy feature, the management at J.P. Morgan is reportedly working with around 220 other financial institutions on various initiatives related to its Quorum-based Interbank Information Network. Recently, the investment bank’s software development team also completed integration work involving Microsoft Azure.

According to J.P. Morgan, its Quorum-based DLT network will be open-sourced in the foreseeable future. Explaining why J.P. Morgan might open-source its DLT-based technology, Harris noted:

“When we think about the community building on top of Quorum… 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.”

The post JP Morgan introduces Zether protocol for private Ethereum transactions appeared first on CryptoSlate.

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