Can someone provide a before and after example on how this technology saves money, reduces transaction failure risk or time taken for transaction to occur (either or all of these)?
- you want to transfer $100,000 to another bank
- you do a wire or ACH
- that’s risky so someone has to verify that you actually have $100,000
After:
- each of your dollars are digitally signed using cryptography
- to transfer them, you share the hashes
- the recipient validates the digital signatures to verify those $100,000 in tokens are legit
It’s all about a system of accounting to reduce risk. With less risk, transfers are faster. Think of it like an api to verify account balances that can only be hacked if the SSL cert for the API is hacked by figuring out the private key
Or, if you send the £100K to a valid address that nonetheless is the wrong one. Money in a black hole.
If you screwed up the note to send $100K via ACH, something could still be done about it.
As such, it’s mostly marketing hype and adds value only for JPMC, not the consumer