JPMorgan offloads unprofitable Quorom network

ConsenSys, the Ethereum-based software company, recently acquired JPMorgan’s Quorum. The acquisition has raised many eyebrows from observers, as they wonder why JPMorgan would sell their database network.

ConsenSys acquired Quorum for an unknown amount of money; however, JPMorgan subsequently made a ‘strategic investment’ in ConsenSys that most likely canceled out, or even exceeded, the amount of money ConsenSys paid for Quorom. If this sounds strange to you, it’s because it is.

Will Martino, former lead engineer for JPMorgan’s first blockchain Juno, shared his thoughts on the matter and explained why JPMorgan was more than happy to get rid of their enterprise blockchain.

“Quorum was a real attempt at making Ethereum technology stick in an industrial setting,” said Martino, according to a Cointelegraph report. “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.”

JPMorgan sold Quorum because they don’t see any real value in it—if they did, they would not have sold it. What may have encouraged JP Morgan to part ways with Quorum was that the company was having trouble getting enterprises to adopt and implement Quorum.

“If JPMorgan, 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,” said Martino. “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’.”

Ethereum doesn’t work

Just as Martino said, if you are talking to an individual that isn’t an Ethereum maximalist or an individual with a large position in Ethereum, they are going to tell you that Ethereum doesn’t work. An enterprise needs a blockchain capable of handling tens of thousands, if not hundreds of thousands of transactions per second and the Ethereum blockchain is just not able to provide that

“So when you take something like the EVM, which was never the bottleneck on a public blockchain and you put it onto a private chain, all of a sudden, it can very easily become the bottleneck,” said Martino. “And that is one of the reasons that Quorum had a lot of trouble just performing more than (the numbers I have heard) between two hundred and thousand transactions per second.”

Hobby platform Ethereum suffers from low transaction throughput and high transaction fees, which make it infeasible for building applications and services at scale. Unfortunately, enterprises, and any individual or company looking to be a big fish, are going to need to build on scalable infrastructure, which immediately rules Ethereum out and only leaves Bitcoin SV as an enterprise solution that works at scale and is built for enterprise level scale. That being said, JP Morgan rid themselves of the problem that was Ethereum-based Quorum, because they knew that enterprises are not interested and would find it impossible to implement an Ethereum-based system into their business operations.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.