Category: Banking & Finance

Investment bank JPMorgan recently tested blockchain’s decentralised network to see if two machines could transact autonomously. And it was literally out of this world. The experiment involved carrying out blockchain-based payments between satellites in space “which validated the approach towards a decentralized network where communication with the earth is not necessary,” according to a statement by the Nasdaq-listed manufacturer and supplier of nanosatellites for customers in the academic, government, and commercial markets – GomSpace. The transaction was made utilising the company’s GOMX-4 satellites instead of JPMorgan sending its own satellites in space. The in-orbit demonstration between satellites was the “world’s first bank-led tokenized value transfer in space, executed via smart contracts on a blockchain network established between satellites orbiting the earth.”

“JPM: First bank with space-based payments using multiple satellites, enabling machine-to-machine payments, programmable value transfer, perhaps an intergalactic currency backed by H2O/O,” Christine Moy, Global Head of JPMorgan’s blockchain network Liink tweeted recently. According to GomSpace, such space-based payments have opened the door to a potential peer-to-peer DvP (data versus payment) satellite marketplace in the long term, as private companies prepare to launch their own constellations.

“I strongly believe that JPMorgan could have done this payment test without involving outer space and the satellites. They chose outer space because it is possibly the highest level of decentralized environment. A blockchain network created between the satellites and token transfer was done without any sort of communication with earth, it is similar to doing a P2P transaction on earth within a blockchain network without the use of any formal payment platform. This will enable payments between connected smart devices/IoT devices without any human intervention,” Shivam Thakral, CEO of cryptocurrency exchange BuyUcoin told Financial Express Online.

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“The idea was to explore IoT payments in a fully decentralised way,” Reuters reported quoting JPMorgan’s blockchain business Onyx CEO Umar Farooq. “Nowhere is more decentralised and detached from the earth than space,” he added. Moreover, according to Tyrone Lobban, Head of Onyx’s blockchain innovation accelerator Blockchain Launch, the test also showed that it could be possible to create a marketplace where satellites send each other data in exchange for payments, as more private companies launch their own devices into space.

Along with Amazon and SpaceX, companies such as OneWeb, Facebook, India’s Pixxel have reportedly been working on sending their own satellites to space. “We are proud to have supported J.P. Morgan as they explored this novel use case of a space-based payment infrastructure utilizing blockchain technology,” Niels Buus, CEO, GomSpace said in a statement. GomSpace’s GOMX-4 satellites would further allow the company to provide rapid in orbit demonstrations, such as JPMorgan’s project, as a service to its customers to explore new uses of space technology.

Back on earth, examples of IoT payments that could become a reality sooner include a smart fridge ordering and paying for milk on an e-commerce site, or a self-driving car paying for gas, according to Farooq. “As far as the future of payments is concerned, this will bring ultimate decentralization in the financial system where even the internet won’t be required to execute payments. This will help in making blockchain technology mainstream and global banking giants will move towards blockchain technology for providing new-age banking services,” added Thakral.