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 Will tech giants like Amazon and Facebook takeover the blockchain & crypto space?

 

Crypto trend

 

The Blockchain and akin technologies industry has witnessed incredible growth in the ten years since its inception and is likely to grow even more in the next ten. The technology grew from being a quirky idea for the financial ecosystem to disrupting scores of industry sectors worldwide, it’s safe to say blockchain technology grew at an unparalleled pace. In the past few years though tech giants like Facebook, Amazon and IBM who previously shied away from using blockchain technology, is now looking to integrate it into their ecosystems. The important question here is, will these massive enterprises take over the industry by utilizing their overwhelming resources?

 

Dipping their toes into blockchain

 

The tech giants of the world are making strides towards integrating blockchain technology into their ecosystem, the following are some of the noteworthy developments.

 

Facebook

 

In February 2019, social media giant Facebook acqui-hired a majority of Chainspace employees for an undisclosed amount, according to InWara’s M&A database. Chainspace was founded by a group of PhD researchers at University College of London. Chainspace is a startup aiming to augment the transaction speed of current blockchain technology to reach a level on par with financial systems, the company was also exploring possible use cases for the technology outside the financial services sector.

According to a report published by media company Cheddar, Facebook is allegedly on a hiring spree, recruiting product managers, engineers, academics, and legal experts with experience in cryptocurrency and blockchain technology. As a Facebook spokesperson was quoted saying “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.” also adding “Our ultimate goal is to help billions of people with access to things they don’t have now — that could be things like healthcare, equitable financial services, or new ways to save or share information.” from these statements it can be concluded that Facebook is at the very least considering blockchain as a serious tool, and is trying to find possible use cases for it in their ecosystem. Last year the company also revealed plans to introduce a stable coin in its WhatsApp messenger platform in India. To know more about the strategic rationale behind Facebook’s acquisitions check out InWara’s article.

 

IBM

 

International Business Machines Corp or IBM has been working on blockchain technology for a few years now and even played a significant role in the development of Hyperledger Fabric which is a blockchain architecture. Hyperledger is an umbrella project for the development of open blockchains and related infrastructure founded by Linux foundation. IBM went live with Blockchain-as-a-service project that enables enterprises or organizations to setup a trusted network where users can securely share information, according to an article by ZDnet.

 

Samsung & Sony

 

Samsung plans on integrating a built-in cryptocurrency app into the latest version of its S series mobile, S10. In a report published by cryptodaily, the latest phone could come pre-installed with Samsung Blockchain KeyStore app, which allows its users to use their mobile as a cold storage wallet for cryptocurrencies. The report also revealed Samsung had filed for three trademark applications pertaining to blockchain technology integration. 

Sony CSL, a subsidiary of tech company Sony has revealed that they have developed a physical cryptocurrency hardware wallet that works on IC card technology. Sony CSL aims to commercialize the project in the near future in select countries.

 

Amazon

 

The online retail giant recently announced AWS Blockchain Templates, which will enable enterprises or individuals to launch Ethereum or Hyperledger Fabric networks in just a few clicks. The already available blockchain templates will create and configure all the necessary AWS resources, structured in a scalable fashion.

 

Microsoft

 

Software giant Microsoft revealed Azure Blockchain Workbench, a feature available on the company’s cloud computing wing Azure. Microsoft claims with this feature users can create blockchain networks easily with the help of prebuilt infrastructure.

Amazon, Microsoft and IBM seem to be in direct competition with each other by offering Blockchain-as-a-service to its clients (BaaS). Enterprises can connect their blockchain networks to cloud computing services to help increase the efficiency of their blockchain networks.

 

Does the crypto space need established companies?

 

The blockchain and crypto space is in the doldrums currently, with the lingering crypto winter. The total market cap valuation is at $120 billion, which is a fraction of what it used to be at the beginning of 2018. On top of this, entrepreneurs are finding it increasingly difficult to raise funds through Initial Coin Offerings, as increased regulation on ICO sales and the dwindling interest of investors in ICOs are contributing to the depreciating trend. To drive innovation forward in this space, enterprises and entrepreneurs desperately need money. Besides providing financial support, institutional money can also help in the mass adoption of blockchain technology by boosting public trust. Imagine if Google integrated a search engine into blockchain networks? To know more about why the crypto space needs institutional money check out InWara’s article.

 

Competition brewing in the space

 

A brief sector wise overview of the blockchain and crypto industry could give us insight as to why these big tech companies are trying to enter the crypto space, by integrating blockchain technology. 

 

# of ICOs sector wise

Source: InWara’s annual report 2018

 

In the short period since the advent of blockchain, several hundred startups have popped up, aiming to revolutionize almost all industry sectors. A similar trend was observed during the nascent stages of the internet era and these companies overtook industrial giants at that time to become leaders in their own sectors. Some of these internet era leaders are Google, Amazon and Microsoft. The advent of blockchain and cryptocurrency is considered by many as the internet 2.0, a decentralized and open internet not controlled by any single entity. Essentially blockchain technology and its inherent qualities, challenge the business models of Tech giants like Google and Amazon. Imagine how Blockbuster video failed to adapt to the internet era and was easily replaced by streaming services such as Netflix. The FAGMA (Facebook, Apple, Google, Microsoft, Amazon) group is essentially trying to stay ahead of the technological curve, hence adopting new but promising technologies. 

So will these tech giants take over the crypto space? It’s incredibly difficult to say for sure but they do have an overwhelming arsenal of resources to do so. But blockchain technology inherently cannot be owned by a single entity, its controlled by the people, its users. And in that sense, the chances that a single enterprise will dominate the blockchain and crypto space are pretty slim.

 

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