The abduction of Web3 — Season 1 Episode `Google`
Eyeballs
In less than 18 months, Google went from lifting a 3yr ban on crypto-related advertisements to embedding an Ethereum Merge countdown ticker for the transitions of Ethereum from proof-of-work (PoW) to proof-of-stake (PoS).
Payments
One year after shutting down the much-anticipated Google Plex, Arnold Goldberg, ex-Paypal, is hired to run Alphabet`s payment operations. The narrative shifts to `teaming up with a wide range of financial services, including cryptocurrencies`.
Recently, we have had two announcements from Google around crypto payments: (a) consumers can use Google Pay to buy cryptocurrencies from P2P crypto exchanges like Paxful or centralized crypto exchanges like Kraken (source) (b) Google cloud customers will be able to pay with cryptocurrencies, enabled through a partnership with Coinbase (CNBC news).
Both moves are baby steps but show the trend. I say they are baby steps and I mean it because (I haven’t tried it personally) paying with Google Pay for crypto, will surely require additional verification at least from Kraken. We are nowhere close to the seamless customer experience of Tap and Pay for crypto via the Google Wallet. At the same time, the Apple Wallet has partnered with Metamask (the popular Blockchain wallet) so that Metamask users can choose to buy crypto with their Apple Wallet (linked of course to their VISA or Mastercards) with a daily limit. A totally different customer experience (source).
The business partnership with Coinbase will go live next year and will be rolled out slowly (not all customers will have access to it). It is enabled through Coinbase Commerce which supports 10 currencies, like Bitcoin, Bitcoin Cash, Dogecoin, Ethereum, and Litecoin but also stablecoins like USDC, Tether, and DAI.
Coinbase Commerce was launched in 2018 and already has 10,000+ business clients. It is one of the many business offerings that Coinbase has built and is growing to diversify its revenues from retail transaction fees on the exchange. I looked into what it is all about, as Coinbase Commerce does seem like a Stripe for digital assets.
In a nutshell, Coinbase Commerce enables merchants to accept crypto (choose which ones from the Coinbase Commerce menu) with nearly real-time conversion (10min or less) to their selected crypto or fiat. Payers benefit from no-fee crypto transactions if the merchant is a Coinbase Commerce merchant. In plain words, Coinbase Commerce is enabling Instant Free payments within the Coinbase Commerce network.
Data
Public Blockchains are an eternal paradise for data scientists. Transparency and traceability of transactions is really a wonderland.
No wonder, Google chose to partner with Chainlink in mid-2019 and only now do I see the explosive potential for finance in this business collaboration. No wonder Chainlink has been claiming, “Chainlink Collaboration With Google Cloud Sparks “Exploding Universe” Of Hybrid Blockchain/Cloud Applications”.
Chainlink`s mission states `Securely connect smart contracts with off-chain data and services`.
The classic example of a USD-backed stablecoin, reveals the value that Chainlink can deliver. The stablecoin Pax Dollar (USDP) and PAX Gold token (PAXG) are actually both clients of Chainlink. Chainlink`s business is to link to the institution holding the USDP and PAXG reverses (fiat and gold respectively) and use the Chainlink Proof of Reserves decentralized network to verify and provide this data in real-time via API data for Dapps or Apps to use.
`PoR reference feeds provide smart contracts with the data needed to calculate the true collateralization of any on-chain asset backed by off-chain reserves. These reference feeds are operated by a decentralized network of oracles on the Chainlink Network and allow for the autonomous auditing of collateral used within a protocol in real-time, helping ensure that user funds are protected from unforeseen “fractional” reserve practices and other fraudulent activity from off-chain custodians. Chainlink PoR can do this even across blockchains. ` Source
The way the decentralized data verification works (a very simplified version) is: users supply off-chain data and earn LINK tokens as rewards if the data supplied is correct; their LINK tokens are locked up until data is verified.
Any smart contract needs reliable and instant data to execute what the code instructs. Chainlink is an enabler as it plays the role of providing such data via links to the needed off-chain data and cross-chain data. Google played that exact role for Web2 — recognizing what internet data is needed, how to organize it, and how to provide tools to leverage the data. So, Google is in bed now with Chainlink and what Google wants to accomplish is bring all its off-chain data sets and link them to Web3 via Chainlink. So, BigQuery (Google`s enterprise cloud data warehouse) can flow through Chainlink`s connectors and enable Dapps of any sort. Weather data from BigQuery via Chainlink, can go to Insurance Dapps for example. And of course, combine them with Google analytics.
The scary part (for Web3) is that Google just announced that it has made ETH Addresses and Balances Searchable! What this means is that I can copy my ETH address in the Google browser, the Search Powerhouse, and see my balances! It looks like this
It doesn’t work fully yet (I tried it) and is only for ETH addresses (not for Bitcoin or others). But it shows how risky and messy the road to Web3 adoption is. I cannot imagine what Unstoppable Domains, ENS, Brave and others are saying about this. Google will organize this search data and sell it to advertisers, why not?
Conclusion
The abduction of Web3 is like a Netflix series in Season 1 Episode 16. There will be many Seasons and Episodes. Some Seasons will focus on the abduction of Web3 via existing Wallets, like the Apple Wallet (i.e. via payments). Other Seasons will focus on the abduction of Web3 via BigTech, like Google (i.e. via Data & analytics).
Adding a Google recent Intention only: Google has also announced the Intention to become the go-to enabler to run Nodes for #Web3. Rich Widmann, the Web3 lead at Google Cloud, told Decrypt that Google is aligned with open-source and decentralization.
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