- Following a concerted effort in retail and other industries, Google’s Cloud division is forming a team to win blockchain business.
- Theta Labs, Dapper Labs, and Hedera are some of the blockchain companies that use Google Cloud.
- Cryptocurrency payments may be accepted in the future by Google Cloud.
Google Cloud is catching up with Blockchain
Following its efforts to grow in retail, healthcare, and other industries, Google’s cloud division has formed a group to develop blockchain applications.
Google’s success may help it diversify away from advertising and gain a more prominent position in the rapidly growing cloud computing and storage services market from remote third-party data centers.
There is a strong trend among blockchain advocates to construct decentralized applications without intermediaries.
DeFi (decentralized finance) sector has rapidly grown in recent years and aims to eliminate intermediaries, such as banks, from traditional financial transactions, like providing loans.
By using DeFi, no banks or lawyers are needed; smart contracts take their place.
The contract is written on a public blockchain, such as Ethereum or Solana, and it executes when certain conditions are met, neutralizing the need for a central agent.
Technologists are increasingly embracing the idea of decentralized apps as they envision Web3, a decentralized version of the internet, unlike Web 2.0, which was characterized by an explosion of user-generated content such as blogs and social sites.
Many of these services ended up being owned by large internet players, including Google, which bought Blogger, and YouTube (which is one of Google’s most powerful businesses).
Amazon, Google, and other cloud service providers represent a type of centralization by providing computation to millions of people in today’s economy.
Google Won’t Back Down
But Google isn’t about to back down from seizing a chance. Richard Widmann, head of Google’s strategy for digital assets, said the Google cloud group plans to hire numerous blockchain experts.
“We think that if we do our jobs right, it will drive decentralization,” he said.
Google’s cloud marketplace includes tools for developers to build blockchain networks, and it has customers with blockchain technology, including Dapper Labs, Hedera, and Theta Labs.
Furthermore, Google offers data sets via the BigQuery service that can be used to see bitcoin and other currency transaction history.
According to Widmann, Google is now evaluating what types of services it can offer directly to blockchain developers.
There are “things we can do to reduce the frictions some customers have with respect to paying for centralized cloud utilizing cryptocurrencies,” Widmann added.
He said that foundations and other entities engaged in developing digital assets are mainly capitalized with cryptocurrencies.
Google’s Cloud CEO, Thomas Kurian, has identified retail, health care and three other industries for future expansion. Widmann said that Google can assist customers who choose to use blockchain technologies in those sectors.
Crypto curiosity is skyrocketing
Other cloud providers are seeking to capitalize on the crypto market; however, no one has announced the establishment of a blockchain business group other than Google.
As the leader in all of the cloud infrastructure markets in 2020, Amazon Web Services held 40.8% market share, according to Gartner, and announced a blockchain-related service in 2018.
Customers of Amazon Web Services include Accenture, AT&T, and Nestle.
Microsoft, according to Gartner, is projected to have a 19.7% market share by 2020. In 2019, Microsoft introduced a fully managed Azure Blockchain Service, but it was retired in September amidst “lowered interest.”
Smaller cloud providers are also aware of the opportunity.
“We have a lot of blockchain and crypto customers on the platform,” said Gabe Monroy, CPO of DigitalOcean, a platform geared towards small and midsize businesses. “It was one of our biggest cohort growth segments over 2021. We’re definitely paying close attention to the space.”
Cryptocurrency companies are also starting to open up to software developers. Cryptocurrency exchange company Coinbase recently announced Coinbase Cloud, a suite of services capable of running on multiple clouds.
“This is kind of like our AWS for crypto,” Brian Armstrong, the CEO of Coinbase, stated at the JPMorgan Crypto Economy Forum in November.
“We’re trying to externalize some of the services that we’ve had to build. A lot of hard engineering has gone into how do we store crypto and integrate all the blockchains and monitor transactions for AML purposes and do trading and staking and all that.”
In another development, the founders of San Francisco start-up Alchemy told CNBC they hope to be compared to AWS in the blockchain arena. Alchemy announced last October that it had raised venture capital at a valuation of $3.5 billion.
Google has been making its way into the blockchain arena more and more.
Bloomberg reported that company veteran Shivakumar Venkataraman took charge of a new blockchain group last week. A spokesperson said that organization is separate from the cloud team oriented around digital assets.
“We’re going to look to the left and right of ourselves to extent there’s opportunities to work with them,” Widmann said of Google’s other initiatives.
YouTube’s chief executive Susan Wojcicki said that Web3 has influenced the video service in a recent letter.
“The past year in the world of crypto, non-fungible tokens (NFTs), and even decentralized autonomous organizations (DAOs) has highlighted a previously unimaginable opportunity to grow the connection between creators and their fans,” she wrote.
Alphabet’s advertising revenue accounted for 82% of the company’s revenue in the third quarter. Despite a 45% increase in cloud revenue, Alphabet announced a $644 million operating loss. Gartner estimated Google had a 6.1% share of the market in 2020.
Amazon or Google – Who will win the crypto race in 2022?
Cloud infrastructure continues to grow thanks to the massive digital transformations worldwide among enterprises.
The advantages of cloud computing include significant cost savings, scalability, increased security, unlimited data storage capacity, reduced environmental impact, and many others that almost every business today is interested in.
Currently, Amazon Web Services holds an impressive 39% of the global market share according to Q3 2021.
For Google to catch up, there are some initiatives that the new group will tackle, including the entire blockchain transaction history for many cryptocurrencies and integrating Google’s partner ecosystem, including Google Cloud Marketplace.
Google Cloud also confirmed that it is exploring the possibility of enabling cryptocurrency payments for customers in the future.
According to Sofia Chernova of Google Cloud, the company’s communications manager, this is different from Google Pay, which only accepts payments in fiat currencies.
Google Pay supports Coinbase, Bitpay, Gemini, and Bakkt crypto cards, but transactions are still conducted in fiat currencies.
Another interesting note is that Google has hired former PayPal executive Arnold Goldberg to head its payments division after originally reserving interest in entering the financial sector.
Google’s president of commerce Bill Ready told Bloomberg that crypto remains “something we pay a lot of attention to.”
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