Google is considering taking blockchain technology and developing its own distributed digital ledge.
According to Bloomberg, the search giant could use blockchain-related technology to reassure customers that their information is protected when stored on Google network of computer servers that power its cloud services.
Sridhar Ramaswamy, Google’s senior vice president of ads and commerce, said: “This is a research topic, so I don’t have anything super-definitive to say. We have a small team that is looking at it. The core blockchain technology is not something that is super-scalable in terms of the sheer number of transactions it can run.”
Blockchain is a potentially disruptive technology to track assets and transactions in a digital record held collectively among many computers instead of a single centralized database. Its full potential is realized when transactions are stored across many independent computers, a design set up to thwart efforts to compromise its cryptographically secured integrity. And anyone considering embracing blockchain must reckon with technical, legal and even social complications.
“The promise of blockchain of course is twofold: one is friction-free value transfer, you can think of it as money transfer working at scale with no friction and that can have an amazing effect on society, because it’s hard to move money. It always costs 2ish percent in most Western countries to move money,” Ramaswamy said.
The technology presents challenges and opportunities for Google. Distributed networks of computers that run digital ledgers can eliminate risks that come with information held centrally by a single company. Google’s security is strong, so it is one of the world’s largest information holders. The decentralized approach is also beginning to support new online services that compete with Google.
The internet giant has been acquiring and investing in startups with digital ledger expertise, and many of the deals haven’t been announced.
Google’s parent company Alphabet is one of the most active investors in blockchain companies. It has investments in the Blockchain company itself, as well as in Ripple, a company that is working on money transfers using blockchain technology. The Alphabet Inc. unit is developing its own distributed digital ledger that can be used to post and verify transactions. The company plans to offer this to differentiate its cloud service from rivals and provide a white-label version that other companies can run on their own servers.
Google is an internet pioneer embracing new and open web standards. To build its ledger, Google has looked at technology from the Hyperledger consortium, but it could choose another type for running millions of transactions.