JP Morgan's view on Blockchain Technology

At the end of 2018, blockchain surely has stood up to its name with the number of organizations and businesses who are making use of the technology growing at a rapid pace. It has been very well embraced by various technological and financial giants such as IBM.

Whereas, according to a report by CNBC, there are a bunch of investors who are still unconvinced regarding the potential of the technology in corporate environments. JP Morgan's Software Equity Research unit listed three public companies who can come up as winners when using the technology in the long term.

The American Multinational Investment Bank has, in an unbiased way, has predicted that these three companies are capable of “material incremental growth opportunities.”

These three companies are Akamai, DocuSign, and Ellie Mae respectively, with JP Morgan's criteria for change being centerstage "Blockchain as a Service (BaaS)". Akamai was, according to the firm, rated "overweight" and said it was leveraging the BaaS approach.

“Rather than building from scratch, we see customers looking to utilize a vendor like Akamai that offers its Blockchain capabilities as a service,” Sterling Auty, JP Morgan’s software equity research analyst, stated on Thursday, in a note to clients.

“While there are a number of companies that have blockchain technology, IBM as one example, we believe the sizeable Akamai network is an inherent advantage in running a distributed ledger in the blockchain.”

The bank preferred the use of "private" blockchains over public ones such as Ethereum and Bitcoin, with DocuSign also rated as "overweight", saying it could leverage both private as well as public blockchains.

“DocuSign wants to be the platform to enable the entire contracting process in a digital manner. Over time, we could see much of the platform being based on a blockchain, basically shifting its centralized security model for the distributed model of the blockchain,” Auty noted.

In a JP Morgan report released earlier this year, which was titled “Unlocking Economic Advantage with Blockchain”  stating that the technology could be effectively used in business and assess management.

“There is a growing realization that distributed ledger technology – popularly known as blockchain – will bring a radical shift in the way we think about financial assets and the way the financial industry will operate in the future”, the report said.

The report focused mainly on the four stages of the blockchain deployment model, which are, the information sharing stage, the data solutions stage, the critical infrastructure stage, and the fully decentralized stage. It furthermore says that these stages will overlap at some point in time, leading to a decentralized economy with blockchain as its center.