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Bitcoins’ Challenge: Here Comes JP Morgan Chase Bank With a Rival Service.

Written by Gary North on December 11, 2013

Bitcoins are the playthings of computer programmers with very little money.

About 90% of America’s wealth is held by about 20% of the population. These people do not use Bitcoins. They never will. Why should they? If they should ever want what Bitcoins offer — and Bitcoins do not offer much, so far — they will use JP Morgan Chase Bank, which is now going to provide the same service.

Why use poor people’s crypto-currency, when you can use rich people’s crypto-currency? Why limit your transactions to a handful of struggling retail firms that sell things to poor people, when you can deal with established firms to sell things to rich people?

Why limit your universe of users to kids who live on pizza and Jolt Cola, when you can can expand your universe to people with serious money?

If there is anything to crypto-currency, Bank of America will get into this market. Then Citigroup will.

Bitcoins? Why bother? Go where the big money is, not where the big money will never be.

Think of Bitcoins as a bicycle with training wheels. Think of JP Morgan Chase’s program as a Harley.

This is from the Zero Hedge site.

If you can’t beat ’em, join ’em, copy ’em, and then beat ’em. While everyone’s attention has been glued to Bitcoin (and its various smaller and less viable for now alternative digital currencies), JPMorgan has submitted a patent which appears to set the scene for a competing centralized network to Bitcoin. As LetsTalkBitcoin noted first, the “Method and system for processing internet payments using the electronic funds transfer network,” states that Chase’s technology is a “new paradigm.” Moreover that it permits the creation of “virtual cash” (also referred to as “web cash”) with a “real-time digital exchange of value.”

Via eCreditDaily,

Imagine paying for some product in a transaction directly with the seller that doesn’t include a costly third-party fee or the revelation of a personal account number — the current components that comprise credit card and debit card purchases. Imagine this system with a “real-time digital exchange of value.” And imagine that you can archive all the transactions in a personal digital wallet, with its own “Internet Pay Anyone (IPA)” account and inherent safeguards built-in, something that you could call “Virtual Private Lockbox (VPL),” according to JPMorgan’s patent.

If this “web cash” system — as JPMorgan Chase calls it — seems familiar, it should. It smacks of the peer-to-peer transactions of Bitcoins and other cryptocurrencies that increasingly are making the world’s biggest banks uneasy about the future of e-commerce.

The patent, first revealed by LetsTalkBitcoin.com, is a fascinating look into JPMorgan’s veiled outlook on the evolving but growing bitcoin universe, and other more widely-accepted payment systems.

JPMorgan’s proposed system offers another eerily familiar component, which seemingly mimics “blockchain,” a publicly available, permanent ledger of bitcoin transactions.

Without naming the virtual currency or any competing payments system by name, the bank takes a swipe at the cryptocurrency model.

“None of the emerging efforts to date have gotten more than a toehold in the market place and momentum continues to build in favor of credit cards,” according to Chase’s patent application published by The United States Patent and Trademark Office (USPTO). It was filed August 5th, 2013.

(For the rest of the story, click the link.)

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9 thoughts on “Bitcoins’ Challenge: Here Comes JP Morgan Chase Bank With a Rival Service.

  1. John Hannan says:

    The problem is solvable eliminate the fed and do what Lincoln did, print greenbacks. This is money printed by the government to settle the governments debt the fed prints money and loans it to the government with interest, greenbacks carry no interest.

  2. Thomas Entwistle says:

    Why should they? If they should ever want what Bitcoins offer — and Bitcoins do not offer much, so far — they will use JP Morgan Chase Bank, which is now going to provide the same service.</>

    First Gary claims that Bitcoin is a fraudulent Ponzi Scheme and that it is going to collapse.

    Then he claims that it is not money and cannot ever be money, but concedes that it works as advertised.

    Then he says that it works as advertised, is not a Ponzi Scheme, but that no one will ever use it because it is too complicated.

    Then he says that Bitcoin cannot succeed not because it is flawed or is a scam, but because the Feds will never let it succeed.

    Then he says that no one will use it, because JP Morgan is going to launch their own service that is identical to Bitcoin, and the fact that it is complicated, all of a sudden, doesn't matter.

    This is a classic, textbook example of the Moving the Goalposts fallacy. Gary cannot argue against Bitcoin on an economic basis, technical basis (because he lacks the competence), can only speculate about the future political moves against it, and keeps moving the line backwards like Bugs Bunny in "Bugs Bunny Rides Again".

    Gary's cheerleading JP Morgan shows us just how shallow his thinking is on Bitcoin, and exposes another strain of his fallacious thinking, the Appeal to Authority fallacy, where because someone with authority, JP Morgan, is launching a Bitcoin clone, all of a sudden, the technology and idea behind Bitcoin is now sound, legitimate, not a Ponzi Scheme and is to be trusted by default.

    So much for being an advocate of the Free Market. So much for his Libertarian Bona Fides. Its all ringing very hollow now.

    Gary North has shown himself to be a dyed in the wool Statist and to be completely ignorant about the most important technological breakthroughs of the twentieth century; the Personal Computer on the Internet. His articles on Bitcoin have completely discredited him in this narrow area. Mercifully for his sake, his work on Austrian Economics stands alone and separate from his disastrous brush with Bitcoin.

  3. That doesn't solve the problem. The government will still print too much money and still leave us with inflation.

  4. I will never – NEVER – EVER use a digital currency created by the thieves in the banking cartel – Federal Reserve system.
    So, I suppose that JPMorgue will design the currency so that private individuals can create – "mine" it, and they won't pre-mine a huge amount for themselves? I also suppose that it will be designed to have a hard supply limit?
    HAHAHA – I think we know the answer to that!

    An honest currency must be owned and controlled by the public – not a private banking cartel. (as per the Constitution) It also must have hard limits on how much can be created by the open source algorithm itself…

    It's absolutely sickening to see Gary North turn into a Federal Reserve banking system fan-boy. He must be getting senile.

    At least Ron Paul recognizes the significance and value of a competing currency that isn't controlled by the banksters!

  5. awkingsley says:

    Hmmm. 100 million bitcoins were stolen. They have very little marketability. Who did it? The competition? The U.S. Government? The Federal Reserve Bank?

  6. I couldn't agree more. I've lost all respect for Gary North.

  7. Hmm…so, a new currency WITHOUT the major reasons I'm in bitcoin? No thanks. A new currency created by an entity which is in bed with the government? Which you know will be corrupt from the get-go? I think I'll pass.

  8. I've never had much respect for Gary North, but you are complaining about the ONE thing he is most correct about.

  9. Right. The problem is paper money. If money is gold, silver, copper or nickel then there is no risk of government cheating.