Google Just Gave Approval to Blockchain and Crypto Technology

Google Just Gave Approval to Blockchain and Crypto Technology

Blockchain technology and the cryptocurrencies derived from it have been a hot investment topic in recent years. However, outside of a handful of fintech companies that enable crypto trading or buy and hold crypto, executives at mega-tech companies have had little to say about blockchain or what internal projects they might be talking about. to work.

That could be about to change. The CEO of Google’s parent company Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG), Sundar Pichai, just made a public comment on blockchain when asked about the future development of internet technology. That doesn’t mean you should start throwing your hard-earned money into cryptocurrencies, but it’s a nod of approval to the underlying blockchain technology that deserves attention.

Image source: Getty Images.

Google is “definitely looking at blockchain”

A big, bright spotlight was shone on Alphabet’s Q4 2021 knockout results. A 32% increase in year-over-year revenue, driven by more than $61.2 billion in advertising Google in the last months of the year, is no joke.

But Google is always looking for new opportunities. Its booming YouTube business segment has paid off in recent years, and while Google Cloud isn’t (yet) profitable, that division grew 44% year-over-year in the fourth quarter to reach $5.54 billion. It’s clear that Google knows how to foster the growth of emerging technologies.

To that end, a stock analyst asked Pichai on Web3 during the earnings call. Web3 has become a terribly overused and deprecated term, but the original basic meaning refers to a decentralized version of the internet with complex services based on the blockchain – a distributed electronic ledger that cryptocurrencies love Bitcoin and Ethereum use to record transaction data. Pichai’s response to the question is worth considering in detail:

The web has always evolved, and it will continue to evolve. And as Google, we’ve benefited tremendously from open source technologies, so we plan to contribute to that. There are several areas of interest. AR [augmented reality] is a big problem at the computing layer. We have been investing in it for a long time, we will continue to play a role. And that’s something at once – not just with the computing layer, but the services layer, whether it’s Maps, YouTube, Google Meet, etc. I think will help a lot.

At Web3 we are definitely looking at blockchain, and such an interesting and powerful technology with wide applications so much wider than any application. So as a company we are looking at how we could contribute to the ecosystem and add value. To cite just one example, our Cloud team is looking at how it can meet our customers’ needs for 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. Overall, I think technology will continue to evolve and innovate, and we want to be pro-innovation and approach it that way.

What does this mean for investors?

Thanks to movies like Loan player one and, most recently, the rebranding of Facebook to Metaplatforms, augmented reality and virtual reality were presented as an early version of web3. While not exactly an accurate representation of what web3 is, Google has nevertheless been involved in various AR and VR projects over the years, and use of its software will no doubt continue in this computer format. .

But more specific to the actual web3 were Pichai’s comments on the blockchain. While the technology was invented to record and manage transactions (the first blockchain was the ledger system used by Bitcoin, developed by the pseudonym Satoshi Nakamoto), it has much wider use in other services beyond finance.

For example, things like automated contract enforcement between parties, data sharing and personal identification services, supply chain monitoring, real-time large-scale network management, or certification property (uh, non-fungible tokens, but other stuff, too) can all use a distributed ledger system. In this sense, we could think of blockchain technology as a further fragmentation of current cloud and edge computing networks, in which data and data computation are pushed from a local data center to individual devices. Thus, Pichai’s indication that the Google Cloud team works with customers in this department. In fact, days before the fourth quarter earnings call, Google Cloud announced the creation of the Digital Assets Teamdedicated to blockchain development.

Again, I wouldn’t take Alphabet’s CEO’s comments as a reason to invest in cryptocurrencies. Nonetheless, it’s an interesting (if not particularly specific) positive commentary on blockchain from one of the largest and most powerful organizations in the world. If you’re looking for a sure-fire, long-term bet on technology, owning shares of Alphabet might be the best ticket there is right now.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.