JPMorgan recently tested blockchain technology between satellites orbiting the earth. This proved that digital devices could use the technology behind virtual currencies for transactions.
The method is known as the Internet of Things (IoT), where devices connect to each other. This is most common with consumer electronics such as smart speakers.
Banks like JPMorgan want to be ready to process payments when these smart devices start doing transactions autonomously.
Said Umar Farooq, the CEO of JPMorgan’s blockchain business Onyx. “The idea was to explore the Internet of Things (IoT) payments in a fully decentralized way. Nowhere is more decentralized and detached from earth than space.”
To conduct the space experiment, JPMorgan’s blockchain technology team did not send its own satellites into space. Rather, it worked with Danish company GOMspace, which allows third parties to run software on its satellites.
The satellite test showed blockchain networks could power transactions between every day objects. It also revealed the possibility of creating a marketplace where satellites send each other data in exchange for payments.
Blockchain, which first emerged as the software underpinning cryptocurrencies, is a shared digital ledger of transactions.
Financial companies have invested millions of dollars to find uses for the technology hoping it can reduce costs.
However, blockchain has yet to have widespread impact in financial services. That could change with JPMorgan leading the way.
JPMorgan is one of the most active banks in blockchain
JPMorgan has been one of the most active banks in blockchain. In 2016, it created its own distributed ledger called Quorum. The bank also developed a digital coin called JPM Coin.
More recently, JPMorgan created Onyx. Onyx has more than 100 employees and its blockchain applications are close to generating revenues for the bank.
Among the division’s applications is Link, a payments information network involving more than 400 banks. Its goals are to replace paper checks and run Internet of Things (IoT) experiments.