Blockchain technology and the cryptocurrencies that are based on it have been a hot investment topic in recent years. however, outside of a handful of fintech companies that enable cryptocurrency trading or buy and hold cryptocurrencies, executives at mega-tech companies have had little to say about blockchain or internal projects they might be working on.
That could be about to change. google parent alphabet (googl -2.46%) (goog -2.27%) CEO sundar pichai just made a public comment about blockchain when asked about the future development of internet technology. That doesn’t mean you should start spending your hard-earned money on crypto, but it’s a nod to the underlying blockchain technology that’s worth paying attention to.
Reading: Google approves bitcoin
google is “definitely looking at blockchain”
A major spotlight has been placed on alphabet’s Q4 2021 earnings. A 32% year-over-year increase in revenue, fueled by Google’s more than $61.2 billion in advertising during the last few months of the year, is no joke.
but google is always looking for new opportunities. Its bustling YouTube business segment has paid off in recent years, and while Google’s cloud isn’t profitable (yet), that division grew 44% year-over-year in the fourth quarter to $5.54 billion. Google clearly knows how to foster the growth of emerging technologies.
To that end, pichai was asked about web3 by a stock analyst on the earnings call. web3 has become an woefully overused and cheapened term, but the original basic meaning refers to a decentralized version of the internet with complex services built on the blockchain: a distributed electronic ledger that cryptocurrencies like bitcoin and ethereum use to record transaction data. pichai’s answer to the query is worth carefully reviewing:
The web has always evolved and will continue to evolve. And like Google, we’ve benefited greatly from open source technologies, so we plan to contribute there. there are several areas of interest. ar [augmented reality] is important in the computing layer. we have been investing there for a long time, we will continue to play a role. and it is something that both, not only with the computing layer, but also with the services layer, be it maps, youtube, google meet, etc., I think they will contribute a lot.
in web3, we are definitely looking at blockchain, and such an interesting and powerful technology with wide applications much broader than any other application. so as a company we are looking at how we can contribute to the ecosystem and add value. just one example, our cloud team is looking at how they can meet the needs of our customers in creating, transacting, storing value, and deploying new products on blockchain-based platforms. so we will definitely be watching the space closely and supporting it where we can. In general, I think technology will continue to evolve and innovate, and we want to be pro-innovation and approach it that way.
what does that mean for investors?
See also: Does Crypto Mining Damage A GPU?
Thanks to movies like Ready Player One and, more recently, Facebook’s rebranding to meta-platforms, augmented and virtual reality have been heralded as an early version of web3. While that’s not exactly an accurate description of what Web3 is all about, Google has been involved in various AR and VR projects over the years, and use of their software will no doubt continue in this computing format.
but more specific to the actual web3 were pichai’s comments on blockchain. While the technology was invented to record and manage transactions (the first blockchain was the accounting system using bitcoin, developed by the pseudonym Satoshi Nakamoto), it has much wider use in services beyond finance.
for example, things like automated contract execution between parties, data sharing and personal identification services, supply chain monitoring, real-time large-scale network management, or ownership certification (eh, non-fungible tokens, but other things too) can make use of a distributed ledger system. In this sense, we could think of blockchain technology as a further fragmentation of current edge and cloud computing networks, in which data and data computing is sent from a local data center to devices. individual. hence pichai’s indication that the google cloud team is working with customers in this department. In fact, just days before the fourth quarter earnings call, Google Cloud announced the creation of the Digital Assets team, dedicated to blockchain development.
Again, I would not take the comments of the CEO of alphabet as a reason to buy crypto as an investment. however, it is an interesting (if not particularly specific) positive comment on blockchain from one of the most important and powerful organizations in the world. If you’re looking for a long-term safe bet on technology, owning alphabet stock might be the best option at the moment.