Banking services for the new Digital Properties of Web 3

5 min readOct 14, 2021

Web 3 is coming and it is inextricably connected with Digital Assets. Michael Saylor and some others, use the term `Digital Property. Without getting into the nuances of the terms, Web 3 is where we are heading to. For me, one of the main characteristics of Web 3 is going to be `Interconnected Digital Assets/Properties`. These digital interconnections enabled by Web 3, will unlock value. These interconnected Digital items will have a higher value than the sum of each Item before Web 3.0.
A simple example of this would be the Digital representation of a building property, designed to include its energy and electricity data consumption. This hybrid Digital Property can autonomously manage its Energy and Electricity needs in an efficient way that is practically impossible with the current ways.

MIRIS, the sustainable Smart Community delivery company is one existing example of what is possible. They use blockchain technology (MIRISX infrastructure [1] ) to lower 50% the cost of development of their smart buildings and to cut the carbon footprint of these buildings by 50%. The optimization of energy & electricity consumption is continuous and real-time and increases the value of the property.

In a nutshell, Web 3 will allow us to leverage fully on-chain data because it is fully transparent and real-time. Value will be created in these `mini ecosystems` like the one that connects a physical building with its energy and electricity. We can envision more complex mini-ecosystems that reward stakeholders (investors, residents, service providers) for their contributions to specific SDGs.

Simon Taylor in his October 10, Fintech Brain Food issue, shared his thoughts about BigTech no longer being the big threat to Banks. A worthwhile read which uses the great visual of the Adizes corporate lifecycle to make the point that GAFAs have become incumbents. Now, I am not sure if anyone is sad about this 😢. I am sure that some may disagree. Simon of course, is focused on whether any of the GAFAs are still a threat to Banking as we know it today.

In the current world, Banking is manufactured and distributed by incumbent Banks, Fintechs with a variety of licenses, and by non-financials that embed financial services. All these players are involved mainly with servicing our fiat-Digital assets and liabilities — salaries, payments, savings, investments, loans. In a Web 3 world, our Digital Assets/Properties and Liabilities will be a much larger class because it will include what we identify as `real assets` today and much more (health data, electricity, energy, IP, a huge variety of hybrids, etc.).

The fundamental question is whether the entities that are today involved in Banking will be the ones servicing these New Digital Assets/Properties and Liabilities.

My first thought is that we need to consider the current Cloud providers who naturally will host these Digital Assets and who have great Data analytics expertise. Why? Because the management of this huge new asset class will be purely based on-chain analytics. So the question becomes: Who is better positioned to handle the exponential growth of Digital Assets/Properties and Liabilities of Web 3?

Today, the top cloud providers are AWS, Google, Microsoft, Oracle and Alibaba. Our Digital assets like photos, videos, blogs, etc. are all over the place. Google and Apple which command the two main smartphone operating systems, have a lead in terms of servicing these seemingly innocent Digital assets. Apple doesn’t seem to be loyal to any of the major cloud providers but over the past 5yrs they report using Google cloud services for cloud. Google maybe the top service provider of photos and videos.

Is there any cloud provider who has a large market share of the ballooning video game industry or the growing Blockchain industry with NFTs just being a small part of it?

Cloud providers can position themselves to grab the opportunity to service these New Digital Assets/Properties and Liabilities because they can host the on-chain data and leverage their analytics and streaming expertise.

Keeping in mind that we are early in the Web 3 development, here are some of the public moves of the top Cloud providers:

Google`s 2019 partnership with Chainlink has enabled BiqQuery to offer a set of tools that makes blockchain data searchable and that allows developers to easily connect smart contracts with the Google cloud data and tools.
Google just announced a long term partnership with Canadian blockchain studio Dapper Labs, creator of the Flow blockchain, and NFT marketplaces like NBA Top Shot and CryptoKitties. The Flow network has over 2,000 developers and supports over 50 apps.
AWS just announced a partnership with Casper Labs, which is focused on enterprise-grade proof of stake blockchains.
Origin the protocol bringing Defi & NFTs to all, launched a decentralized commerce on Google Cloud Marketplace last year (April 2020). Origin also partnered with AWS early this year (Feb 2021).
Google Cloud has been helping Polygon analyze its blockchain data since May 2021. This is important as Polygon is the protocol focused on interoperability. It provides a framework for connecting Ethereum-compatible blockchain networks, aggregating scalable solutions on Ethereum and supporting a multi-chain Ethereum ecosystem. Polygon leverages Google`s powerful analytics.
Google`s partnerships with Chainlink and Polygon are important because both these protocols are focused on interoperability which is key to scaling.
Most recently, Google partnered with Bakkt [2] the ICE-owned crypto wallet company with the wallet that combines cryptocurrencies, game tokens, and loyalty tokens. This partnership has two sides to it. Bakkt will leverage AI/ML Google cloud analytics, and Google Pay will support Bakkt’s recently launched virtual Visa debit card.

AWS claims on its enterprise Blockchain webpage that 25% of all Ethereum workloads run on AWS [3] . It is not clear to me whether this information is up to date.

In a Web 3 world, hosting Digital Assets and liabilities and offering on chain data analytics is key. As long as these new Digital Assets and liabilities are not regulated as securities, then Google and AWS are major contenders to offer Banking services for the huge asset class that Web 3 will enable.

If regulators treat all Digital assets as if they were the same, even though Web3 assets are much broader than financial assets, then they will be chocking the innovation possibilities of Web3. In the new Andreessen Horowitz proposal to policymakers `How to win the Future` this point is clearly stated `Treating web3 as a monolith is analogous to having a single regulatory regime that covers stocks, real estate, cars, art, watches, and trading cards.`