Jamie Dimon: Bitcoin Doomed While Blockchain Is for Real - Bitcoinist.net

Jamie Dimon: Bitcoin Doomed While Blockchain Is for Real

Jamie Dimon

JP Morgan CEO Jamie Dimon is back in the Satoshi spotlight. Speaking during an appearance on CNBC’s coverage of the World Economic Forum meetings in Davos last month, Mr. Dimon once again pronounced his lack of faith in Bitcoin.

Also read: Supreme Court Justice Antonin Scalia Deat at age 79

Jamie Dimon: Bitcoin Going Nowhere

Jamie Dimon“Bitcoin the currency, I think, is going to go nowhere,” Dimon said, “And it’s not because of anything to do with the technology. Governments, when they form themselves, form their currency. Governments like to control currency, know where it goes, and who it goes to, and control it for monetary purposes. There is nothing behind a Bitcoin, and I think if it was big, the governments would stop it. I mean that’s my own personal belief, I may be dead wrong.”

Despite this rather cynical view of “the currency”, the other side of the coin, Mr. Dimon argues, is the potential of blockchain technology:

“The Blockchain is a technology, which we’ve been studying (along with a couple of other people up here) and yes it’s real. It could probably reduce the cost of real application in certain things. It’s keeping a single file, as opposed to each of us keeping our own files, and it has certain security measures. If it proves to be cheap and secure it will be adopted for a whole bunch of stuff. Not for everything; it is not useable for certain types of things.”

First off, with regards to Mr. Dimon’s comments around Bitcoin: Mr. Dimon is understandably speaking out against the potential of Bitcoin, given his unique position as a leader in the Wall Street banking world. Bitcoin represents an ideological shift away from reliance on consumer banking to track funds, towards empowering individuals to act as their own bank. Given the threat that Bitcoin poses to the future of JP Morgan’s business, Mr. Dimon is engaging in his legal duty to serve the best interests of shareholders. Governments like to regulate, control and track currency, and reasonably so.

Bitcoin, however, represents something newer and increasingly important. Bitcoin is simply a scare digital asset represented within a globally distributed and immutable database. The inherent value behind a Bitcoin is the recognition by millions that this groundbreaking innovation, which is the culmination of over 40 years of computer science research, to trade digital assets without need for intermediary oversight possesses ideological and practical value to them.

Yes, governments can and likely will try to usurp Bitcoin if it ever gets big. Challenges arise, however, around the fact that the cat is already out of the technological bag. No matter how much governments try and stop Bitcoin, individuals with knowledge of the peer-to-peer technology will (likely) always find ways around restrictions towards its use, similarly to how people still share music files illegally. This is challenging for the financial and legal communities to deal with, and is it crucial that policymakers and financial institutions understand the true potential here and act proactively without recognizing the economic benefits it provides, so that our communities and financial systems can flourish while remaining safe.

Moreover, with regards to Mr. Dimon’s views of Blockchain technology: the conversation around Blockchains in the banking world is continuing to shift. Increasingly, Wall Street is coming to terms with the real business applications of Blockchain technology and its potential to significantly cut settlement costs, lower latency times, and reduce security vulnerabilities. There is, however, a deeper underlying reason why Mr. Dimon and lawmakers often feel a need to separate Bitcoin from Blockchain technology, and it has to do with secrecy. Blockchain applications do not threaten the sacred kernel at the core of this regulatory dilemma, that being the potential for anonymity. As Mr. Dimon points out: Yes, Bitcoin will be used for certain things, but not the ones that require AML, KYC, taxation, and licensing by law.

Lastly, Mr. Dimon’s comments reflect an increasingly popular idiom in regulatory and banking circles, that of private versus public blockchains. This juxtaposition has been a hot topic of discussion at this week’s San Francisco Blockchain Conference.

Recent R&D investments in blockchain technology by banking institutions such as Goldman Sachs, J.P. Morgan, and Citi signals the impact that comments such as those above by Mr. Dimon are having on the larger financial space.  Perhaps, if the focus by traditional institutions keeps shifting away from Bitcoin and towards the Blockchain, talent behind its workforce will increase tenfold.  In the long run, proactive and honest conversations between Wall Street, Washington D.C., and Silicon Valley will make determining how to best regulate Bitcoin without stifling the beneficial qualities it brings (global payments system, kind of like a WhatsApp for money or 1990’s email) a lot easier and more effective for everyone involved.

What do you think of Jamie Dimon’s comments? Are they accurate? What does this hold for the future of the relationship between Bitcoin and Blockchains? Share your thoughts below!

Images courtesy of Wikimedia Commons, Aspen Ideas Festival


Ryan Strauss

Ryan Strauss

Ryan Strauss is an avid writer and Bitcoin fanatic who has been involved with the cryptocurrency space since 2012. A 'crypto-industrialist', Ryan is also the author of #100DaysOfBlogging. Follow on [email protected]

  • What Jamie Dimon fails to understand with regard to governments wanting to ban bitcoin the currency. Is that it’s an opensource, peer to peer, decentralised network. Not some centrally and privately run organisation which the establishment can just enforce a financial blockade on. The genie is out of the bottle now and it’s nigh on impossible to kill an idea like that.

  • Andrew Noon

    Has any statement by Jamie Dimon ever shifted the bitcoin price in a meaningful way? Nope. And that should indicate how much his opinion on disruptive technology is worth.

  • KikiNumerique

    The guy is trying to build its own private Bitcoin on top of the blockchain but spits on the existing public/open one? “I may be dead wrong.” You bet!

  • Buford T. Justice

    Dimon has been so spectacular with his investments over the last decade that I’m selling all my bitcoins now.

    Waiting for Cramer to weigh in.

  • Buford T. Justice

    That’s not exactly true. Dimon’s reverse-acumen is perfect for Bitcoin investors.

  • don77701

    Blockchain technology cannot succeed without Bitcoin succeeding. Bitcoin is the testing in the lab. If it fails, than Blockchain has failed. If it succeeds, it shows a blockchain technology is possible and workable. That is the problem with some of these people that don’t understand Bitcoins and Blockchain, they are interrelated and cannot be split for the sake of public and private confidence. They constantly ask about proof and evidence that it works in a grand scale, well what do you think the Bitcoin and all the other Altcoins are????

  • don77701

    Your forgetting, Bitcoin is the testing for blockchain Dimon maybe a business man, but he doesn’t understand private and public confidence and the science lab testing. How do you test a blockchain in the scale it needs to be for a whole world? You have bitcoins as the test, right now. If it fails, then the blockchain technology will be questioned and even confidence will be lost, as well as trust. If it succeeds there be more confidence since it is run on a blockchain.

  • don77701

    Oh give me a break, so many try to say Bitcoin is dead, but it lives and survives and may even thrive. Look without Bitcoins, blockchain technology will be a question always. They will say Bitcoin runs on blockchain and it failed if the Bitcoin dies. Blockchain technology lives because of Bitcoins.
    The real problem, these business men and most of the world, don’t realize there is a changing – a changing that will not be realize by most till it’s too late. They currently don’t realize it because they don’t know how to use it and also they don’t even know it is happening. It is starting, but it will not end,

  • kenneth Miller

    bitcoin has already been tried to be stopped by the fbi when it first started up and they failed. since it’s in the cloud system they can not touch it. they knew it would cause problems down the road but they can’t do a thing about it now except join in. the fbi is the biggest known holder of bitcoins in the world now from busting drug operations and confiscating the bitcoins. they are not going to destroy them but are trying to figure out what they can use them for now.

  • RJF

    Nero fiddles while Rome burns. He can’t even begin to understand that his financial world is the one that is “doomed” Hey Jamie, your opinion is useless. What an arrogant bastard…

  • NotMyCupOfTea

    But all the government has to do is prevent any bank or website from making transactions with a Bitcoin merchant or exchange. Correct?

  • NotMyCupOfTea

    Huh, no I don’t think that’s what he’s doing. Banks are always looking for more efficient ways of transferring money. Even if that means implementing a block chain, but it would be done with USD.

  • NotMyCupOfTea

    What? You have no clue of what you’re talking about. There is no dependance of blockchain technology on Bitcoin. Why do you think there are so many virtual currencies? Banks can implement a blockchain no problem if they want to, it’s just a matter of them all agreeing on doing it.

  • NotMyCupOfTea

    Huh? All the government has to do is shutdown any Bitcoin website, merchant, and exchange. Rendering it basically useless. It’s a baby right now, the government doesn’t care.