Jun 7, 2018 09:03 UTC
Sep 21, 2018 at 11:41 UTC
Uber, Facebook and Google: Is The Time Right?
With the rate at which blockchain technology is gaining popularity, it is just a matter of time when multinational companies will use the blockchain technology too.
News says that Microsoft and Amazon were considering the possibility of integrating blockchain technology into a number of their platform services. Other such cases include Huawei is loading its phones with a built-in Bitcoin wallet, Samsung’s plans to use blockchain for managing its global supply chain, and IBM’s partnership with Nestle.
However, not one MNC has been able to incorporate it successfully and make a dent in the market. Cointelegraph took an objective look at whether blockchain can improve profits and services rendered by top players like Google, Facebook and Uber and why hasn’t this integration occurred yet.
Google has had a history of experimenting with revolutionary technology. Cloud technology, neural networks, big data, artificial intelligence, augmented reality, self-driving cars, machine learning – all of these have been applied or even designed by the company. But Google doesn’t seem bothered with blockchain at all.
CBInsights states that Google takes the second position among the top corporate investors in blockchain companies, with 6 investments that span private enterprise services (LedgerX), and merchant services. Google possibly expects to profit from its equity investment in blockchain startups and sees the perspectives of this industry.
Another reason explaining Google’s blockchain investment could be that it is trying to integrate blockchain for enhancing its corporate processes. This is supported by the fact that Google recently began developing a blockchain-based cloud service.
This new solution is expected to not only provide a high level of security for personal data stored on cloud servers, but also help Google to gain a competitive advantage against other startups which are playing around with the technology.
Another example of how blockchain technology can change existing Google services can be the Ubex startup, which offers a service a collaboration of blockchain technology and artificial intelligence that directly connects advertisers and webmasters, providing full automation and as a consequence, more attractive conditions for promotion.
The founder of Ubex, Artem Chestnov said:
“Google will start moving to the blockchain space faster than we think and than their management thinks, they simply have no choice. They are already late and will try to catch up time by a number of serious acquisitions. We shall see a multi-billion M&A activity from tech giants already next year.”
Facebook has been frequently seen in the headlines of cryptocurrency stories for the last two months. Starting from data theft to cryptocurrency ads bans Mark Zuckerberg has heard it all.
On May 11, the world found out that Facebook has plans to launch its own cryptocurrency after all. We, however, are unaware of the specific details. Just like Telegram, the company is preparing the ground for blockchain deployment and maybe understands that ignoring new technologies will inevitably lead to the loss of power in the future.
The development team will be headed by David Marcus, who previously worked with Coinbase and PayPal:
One problem remains that the limited blockchain bandwidth may make it difficult to turn Facebook into a global blockchain platform. The BTC network has a throughput of 2–5 transactions per second, and Ethereum with the processing speed of 1200 transactions per second. They are completely thrashed by a traditional system like Visa which can easily process over 25,000 transactions per second.
According to Zephoria, every 60 seconds on Facebook: 510,000 comments are posted, 293,000 statuses are updated, and 136,000 photos are uploaded. We already know that the Ethereum network allows the processing of only 1200 transactions per minute. The transfer of user data to the blockchain may also have its traps, given the recent scandal around the leaks of users’ personal data, which cost the company $100b of market capitalization.
Joseph Lubin, Ethereum co-founder, has suggested that if Facebook ever makes friends with decentralization, it will be either “a decentralized platform that offers the same services”, similar to the current model of the Steemit platform, which is independent of moderation and centralization. Steemit developers have managed to create a system in which any social activity is paid for by the platforms cryptocurrency, instead of the usual likes and dislikes. At the same time users’ actions, whether posts, comments or votes, are recorded not in the database, but directly in the blockchain.
Blockchain can compartmentalize information and separate data unlike Facebook, which binds any marketing data with users’ identities. The Blockchain system protects one’s privacy (identity), from the information useful for marketers – on demographics, preferences, habits, etc.
Facebook’s data collection system isn’t opt-in, and not even entirely opt-out, completely dis-empowering users. The use of distributed ledger technology (DLT) offers users full power over their data and the ability to directly benefit from sharing it, thanks to an integrated incentive model in the form of cryptocurrency, tokens, or other monetary rewards.
Full decentralization makes us believe that each record on these resources could remain untouched, impossible to be changed or deleted. In addition, high-quality copyrighted content, interesting to users, is rewarded with the liquid cryptocurrency. Full decentralization without any moderation may lead to users post offensive or cruel materials, prohibited content or private data.
Companies such as Uber act as agents or centralized information exchange centres for connecting providers with people who need their services. At the same time, users might not realize that there are several links in the chain, each of which impacts the speed, quality and cost of the service provided.
The signs indicating centralization are there, with the entire infrastructure, including servers and software belonging to aggregators, and the mechanism of interaction of individuals with others controlled by the platform. In the case of Uber, users send a request for a trip through the application, which then sends it to the server, where the signal is distributed to the drivers’ base. At the end of the trip, the driver receives money. Uber takes a percentage of the fare from this transaction.
Under its current business policy, Uber is a structure that cannot work without centralized power and a company that has complete control over everything that happens inside its system, and dictates the term for working with contractors, gives it the opportunity to abuse its power.
In fact, as blockchain is a distributed ledger, representing a continuous chain of blocks sequences, it is extremely secure, because it uses encrypted keys. The information is stored not in one place but is recorded in each block of the chain. It also eliminates the need for a centralized power since service providers and consumers can directly communicate with each other. An important fact is that the currency exchange option is already embedded in the technology.
So is blockchain really practical for Uber? Instead of a centralized organization being the middle-man in the exchange of information, all those who want to become a driver will attach some of their metadata to a profile directly linked to the blockchain. This will enable the current position of the driver and the feedback from clients to be stored. Each time a new pick up is there; the blockchain will pick the closest driver and assign them to the customer. The payment itself would be processed in the existing peer-to-peer network.
With the advancement of distributed ledgers, many opportunities have opened up for changing and improving already established internet markets. Joseph Lubin, co-founder of Ethereum made jokes about several world giants:
“Oracle is just starting on their blockchain journey. Apple seems to be largely uncaring and unaware. Google is making investments, but it’s not clear that they have a lot of activity going on. Amazon, we’ve not seen that much, so we’ll see.”
Decentralization could help big corporations to regulate and optimize their transactions and logistics, security or data storage. Giants like Google, Facebook or Uber will need time to scale what blockchain startups have today.
Currently, two cams are fighting against each other. On one side there is a large number of ICO startups undertaking the monotonous work on the introduction of blockchain technology. On the other side there stand large corporations which rather experiment with or invest in blockchain than apply it.