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Blockchain- based services have enabled numerous startups to offer novel online
services, assuring customers that their information is more secure and more
efficiently managed compared to the traditional methods of online data hosting.
Such new offerings are proving to be a tough competitor for various technology
companies, especially the ones operating in the hosted solutions space, like
the cloud-based data storage.
Additionally, businesses are also wary of the risk of having only a single
company host their key business data. The decentralized nature of blockchain is
preferred by such businesses for better security and risk management of their
content.
Google is said to be venturing into the blockchain space to complement its cloud
business, as it faces stiff competition not only from other cloud providers, like
Microsoft Corp, but also from the many other new-age blockchain service
providers. (For more, see How Amazon Competes with Google.)
“The Alphabet Inc. unit is developing its own distributed digital ledger that third
parties can use to post and verify transactions,” according to a person familiar
with the matter quoted by Bloomberg.
With such white-label offerings, Google, which is known to host all of a client’s
data on its own servers and data centers, may also be open to offering private
blockchains. These private blockchains may be completely owned, controlled,
and operated by the clients, either over the various servers spread throughout
the Internet or hosted securely on a private network. (for more, see Public vs
Private Blockchains: Challenges and Gaps.)
The same source also mentions Google's recent acquisition and investment
spree in startups with blockchain expertise.
There are also hints that Google may come out with an enhanced version of
blockchain. Sridhar Ramaswamy, Google’s advertising chief, said at a recent
conference that his division has a "small team" looking at blockchain, but noted
the existing core technology can’t handle a lot of transactions quickly.
Over the last decade, the blockchain market has grown rather slowly. However, it
is poised to surge ahead rapidly over the next few years. From an estimated
value of $706 million as of 2017, the blockchain market is expected to grow
phenomenally and reach $60 billion worldwide as it creates new digital economic
infrastructure, according to WinterGreen Research.
Technology giants like IBM, Microsoft, and Accenture PLC, are currently leading
the pack of blockchain service providers. With Amazon already offering services
to build blockchain applications, and Facebook Inc’s founder Mark Zuckerberg
also expressing interest in virtual tokens, encryption and other decentralized
technology, Google seems all set to get into the blockchain game.
Since its introduction, blockchain has undergone several iterations as the general
public and private corporations sought to take advantage of its valuable
infrastructure.
While its spectacular design has long played second fiddle to the speculative
sentiment driving valuations in cryptocurrencies, blockchain’s actual
technological rewards should not be discounted. If anything, the attention fixated
on the rampant rally in cryptocurrency valuations has brought increased attention
to the entire ecosystem, accelerating adoption and even raising a greater
likelihood of institutional participation.
Already, countless name brand global multinationals have entered the space in a
drive to revolutionize their offerings. IBM, for example, is one of the companies
at the vanguard of blockchain technology applications for business, especially
amid the growing drive to migrate more services to cloud-based
infrastructure. Even so, it is just one example of the growing corporate embrace
of blockchain, though it highlights the shift towards the deployment of private
blockchains that eschew many of the properties and principles popularized by the
earliest chains.
Building on Efficiencies
At its core, blockchain can be viewed as a decentralized store of information, or a
database that is updated in real-time and distributed across its user-base for
validated record-keeping. Distilling the concept even further, it can be a trustless
means to exchange value, both informational and asset-based. Above all, public
chains are especially valuable due to the transparency inherent in the
technology, with anyone able to view and verify all the data recorded on each
block.
One of the reasons blockchain has gained such prominence is that just like ERP
systems are designed to help enterprises connect different departments and
systems, the technology can serve as a similar hub. IBM’s collaboration with
global shipping giant Maersk and logistics provider Agility highlights the
intersection of multiple common interests, namely deploying the Hyperledger
Fabric 1.0 blockchain to reduce administrative costs by building a more efficient
mechanism to transfer information.
Nonetheless, public chains are not without drawbacks. Early entrants like bitcoin
and Ethereum reveal several limitations that are harming adoption efforts. One
of the biggest problems is efficiency and the amount of processing
power required to run these networks.
Although newer, lighter blockchains like Qtum are overcoming the amount of
processing power needed to host public blockchains, private blockchains have
already overcome this hurdle out of necessity. (See also: What Is Qtum? How
the Cryptocurrency Differs from Bitcoin.)
One of the major complaints about blockchains is their inability to share data, or
lack of compatibility, a common challenge faced by both private and public
chains. If blockchains are a means to transmit and transfer value, whether digital
or physical, eventually a conduit must be formed to bridge disconnected systems
to expand the reach of existing applications. The most oft-cited example is
exchanging value from one cryptocurrency to another.
Although there are many different tradeable cryptocurrency pairs, either pegged
to fiat currencies or other competing cryptocurrencies, the process of transferring
value from say bitcoin to an ERC20 token may involve multiple steps that add
costs instead of subtracting them through seamless transfer. (See
also: Blockchain Is Changing How Dating Apps Work.)
Interoperability has long been the missing key to overcoming the hurdles faced
by both private and public blockchains by empowering them to interact and
exchange values across platforms seamlessly. Though separated by their
functionalities and purposes, the potential to merge public and private
blockchains with innovative new solutions designed to accomplish cross-chain
exchange and greater compatibility holds great promise for all interests, both
individual and corporate.