How Google is Entering the Cryptocurrency Space
“In the past decade, it’s hard to think of a single revolutionary technology that Google didn’t experiment with. Cloud technology, neural networks, big data, artificial intelligence, augmented reality, self driving cars, machine learning — all of these have been applied or even designed by the company. But when it comes to blockchain, […]” Google didn’t seem bothered with it.[1]
Google’s silence with respect to blockchain was conspicuous and left room for speculations and rumors about Google’s move into cryptocurrency by working on it’s own blockchain or token, which have been in the media in excess for the last couple months.
We have experienced a transformation in Googles attitude towards the crypto universe
From being resistant, over a blanket ban of all ads relating cryptocurrencies from exchanges and other startups like Initial Coin Offerings (ICO’s), to a more optimistic attitude by even aiding mainstream adoption by showing users that other cryptocurrencies besides Bitcoin also exist in the market, and also showing their trading price for the fiat currency of their choice.
Not just that, in fact if we take a closer look, Google has put quiet some efforts to get into crypto illustrated by their attempt to approach Vitalik Buterin, the founder of Ethereum — the world’s second most valuable cryptocurrency — in the hope to receive help with a mysterious blockchain project [2]. After Vitalik’s turn down, Google’s second approach was at IOHK CEO Charles Hoskinson and IOHK Director of Engineering Duncan Coutts inviting them to talk about Cardano and the future of cryptocurrencies. Hoskinson, also an early founder of Ethereum, eventually left Ethereum and founded IOHK with Jeremy Wood in 2014.[3]
This suggests that Google is undoubtedly interested in Cardano’s potential to displace Ethereum and become the leading platform for smart contracts, the robustness, scalability, sustainability and throughput of the platform.
Speaking from the 2018 Blockchain Summit in Morocco, Google co-founder Sergey Brin admitted that Google missed the boat when it came to the distributed ledger technology. “We probably already failed to be on the bleeding edge”, he said.[4]
Why then the initial restraint?
Much of the blockchain is B2B integration, of which tech giants have always kept aloof. The current issues are more likely to do what Accenture does or a startup consultancy than Google’s high margin business. They needed partners to launch blockchain projects. That may have been one of the reasons for the reluctance of the tech giant on the subject of blockchain.
Another reason might be, according to Brian Behlendorf, Executive Director of Hyperledger, that Blockchain will reduce the market power of tech giants like Google and Co.[5]
For 20 years Google has ruled the world, or at least information, but now that they’ve become so big whispers have become louder with many wondering what could they do with so much control.
In the blockchain space, of course, there is far too much to do for anyone to sit back and wonder. Disrupting banking, disrupting industry, and some say cryptocurrency coders may as well disrupt the big four of Silicon Valley, including Google.
The crypto sphere and with it the threat due to emerging technologies have now become to significant to be ignored. According to Bloomberg, the tech giant wants now to “head off competition from emerging startups”.[6]
In fact, according to a report by CBInsights [Link], Google was the second-most active blockchain investor between 2012 and 2017, falling between SBI Holdings and Overstock.com [Link]. Others include CITI and Goldman Sachs. Under the radar, Google has been buying a number of startups that focus on digital ledger technologies. So far, Google’s parent company Alphabet’s venture capital arm GV has invested in wallet service Blockchain Luxembourg, financial transactions network Ripple, cryptocurrency asset management platform LedgerX, and international payments provider Veem.
Google finally officially entered the blockchain space,
announcing on its blog just before the Google Cloud Next ’18 conference in San Francisco in July 24–26, to be supporting distributed ledger technology, aka blockchain, by partnering with two blockchain startups to bring them to the Google Cloud Platform.[7]
For the uninitiated, a distributed ledger, or blockchain — often associated to cryptocurrencies — , is a decentralized database shared and maintained by connected computers across the globe. Each transaction can be publicly read while securely stored using cryptography. These transactions cannot be altered without modifying the entire chain because the cryptographic key of one transaction is stored in the next transaction.
For cloud businesses, Google wants to use the blockchain to record user transactions and improve data security. Alphabet plans to offer a license for customers to run their own versions of the blockchain on their own servers.
Googles main rival in the cloud space, Amazon Web Securities (AWS), already offers distributed ledger testing services. AWS has partnered with enterprise blockchain platforms such as Sawtooth, Corda R3, and PokoDok.
According to the founder of Ubex, Artem Chestnov:
“Google will start moving to the blockchain space faster than we think and than their management thinks, they simply have no choice. They are already late and will try to catch up time by a number of serious acquisitions. We shall see a multibillion M&A activity from tech giants already next year.” [8]
It will be interesting to watch Google’s next moves and see which partners they align with as Google enters the crypto battle field further.
[1] https://cointelegraph.com/news/google-facebook-and-uber-has-their-blockchain-time-arrived
[4] https://www.cnbc.com/2018/07/09/brin-says-google-failed-the-bleeding-edge-blockchain.html
[7] https://www.blog.google/products/google-cloud/building-a-better-cloud-with-our-partners-at-next-18/
[8] https://cointelegraph.com/news/google-facebook-and-uber-has-their-blockchain-time-arrived
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