Google's layout for Web3 is also a game of struggle between centralization and decentralization

Author: Zhao Weipeng, Jingyu

Original Title: 《How Does "Giant" Google Enter "Web3"?》

Google's new plan is stirring the nerves of Web3 players. In a headquarters building costing $3 billion, Google has officially established its first Web3 department.

"This means that Web3 has been prioritized by Google, and they feel it's time to seriously explore it," said Professor Lory Kehoe, who has been researching future technology trends at Trinity College Dublin for the past few years.

According to CNBC, the Web3 team formed by Google will provide backend services for blockchain developers, focusing on the infrastructure of the Web3 world. "Although the world is still in the early stages of exploring Web3, this market has already shown tremendous potential. Many clients are asking us to increase support for Web3 and cryptocurrency-related technologies," said Amit Zavery, Vice President of Google Cloud.

Traditional giants can no longer ignore the rise of Web3. A report from a research firm shows that venture capital for blockchain and cryptocurrency companies reached $32.8 billion in 2021. In 2021, the world's 100 largest publicly traded companies invested $1.91 billion in blockchain, compared to just $500 million in 2020.

Panoramic view of Google's Silicon Valley headquarters | Wikipedia Google Cloud defines the Web3 craze in its official blog: "Blockchain and digital assets are changing the way the world stores and transmits information and value. Today's Web3 craze is akin to the rise of open source and the internet 10-15 years ago. Just as open source development was an indispensable part of the early internet, blockchain is bringing innovative momentum to users and businesses."

Google has shown its enthusiasm and determination for Web3; however, interestingly, at the beginning of 2022, Vitalik Buterin, a representative figure in the Web3 world and co-founder of Ethereum, stated in an interview with TIME magazine that he hopes the Ethereum platform can counterbalance authority and become a launchpad for various social experiments, and disrupt Silicon Valley's constraints on our digital lives.

One of the tenets of the "decentralization" spirit advocated by Web3 believers is to take control of the internet away from large companies and return power to every ordinary user. Currently, this centralized giant from Silicon Valley, which has succeeded through "centralization," needs to find new stories and paths to resolve doubts as it enters a new field primarily characterized by "decentralization." Google's Web3 Roadmap Google's Web3 team is set up under Google Cloud.

On May 7, in an email sent to employees, Amit Zavery, Vice President of Google Cloud, stated that Google does not want to directly become part of the crypto wave but aims to participate in this trend by providing backend services for Web3 developers. Just as they provide cloud services to many clients, they do not intend to engage in specific businesses themselves but plan to become the infrastructure provider for blockchain companies, lowering the barriers for developers to design their decentralized systems based on blockchain.

Amit Zavery revealed that the newly formed Web3 team mainly consolidates employees who have previously participated in Web3 projects internally and then recruits some blockchain development engineers and other related talents from outside.

There have not been many teams within Google previously engaged in Web3-related businesses.

In January of this year, Google Cloud disclosed that they were researching how to use cryptocurrency for payments. At that time, Yolande Piazza, Vice President of Google Cloud Financial Services, stated that the company had established a Google Cloud Digital Assets team to assist clients in creating new products on blockchain-based platforms. "Making Google Cloud a bridge between traditional enterprises and blockchain technology."

Also in January, according to Bloomberg, Shivakumar Venkataraman, Vice President of Engineering at Google, was operating a department focused on blockchain and next-generation distributed computing, which would undertake various VR and AR-related projects. Venkataraman is a senior expert in Google's search advertising team and has previously published research related to distributed computing.

These teams may be merged into the Web3 department, and the new group's personnel are still being finalized.

It is reported that the Google Web3 team will be led by James Tromans. He joined Google from Citigroup in 2019. While at Citigroup, James served as the data science lead for foreign exchange trading and was recognized as one of Citigroup's most senior foreign exchange trading technology experts. Google Cloud head Thomas Kurian | Acceleration Economy James Tromans will report to Amit Zavery, Vice President of Google Cloud. Amit Zavery previously served as the General Manager of Oracle Cloud Platform and joined Google Cloud in 2019. His superior, Thomas Kurian, the current head of Google Cloud, also comes from Oracle, where he was previously the president.

"In the future, Google will design a system that makes it easier for people to explore blockchain data, simplifying and running blockchain nodes. This tool can also run on other clouds," Amit Zavery introduced.

A blockchain engineer, Zheng Chen, explained, "A 'blockchain node' generally refers to a 'computer' in the blockchain network. It can be any device connected to the blockchain, such as mining machines, PCs, or even mobile phones."

In a blockchain network, there is no concept of centralized "servers" like Google Cloud or Alibaba Cloud; various applications (DApps) primarily perform computations through large-scale distributed blockchain nodes rather than cloud servers.

Since the nodes are decentralized, some node operators have emerged. "Project parties can also deploy and operate some nodes themselves, but it can be cumbersome and unnecessary. It's like how few people want to create a website and also set up a server room at home." Running "mining machines" | Visual China For example, the well-known Ethereum node service provider Infura allows third-party applications to connect to Ethereum through an API provided by Infura, enabling users to access their services without needing to maintain nodes themselves.

"Currently, there is no competitive relationship between the two; Infura acts as a node proxy, while Google Cloud provides web 2.0 servers. Google Cloud is likely also planning to act as a node proxy in the future," Zheng Chen assessed.

Professor Lory Kehoe predicts that payment functionality may be an early focus for Google's Web3 department. "For Google, the prospect of blockchain technology is to transfer tokens from Google customer A to Google customer B in a cheaper, better, and faster way, without going through multiple intermediaries and paying intermediary fees," he explained.

Gartner Research Vice President Christophe Uzureau observed Google's layout regarding Cash App (wallet application), "Google has already established partnerships with Coinbase and BitPay to support the issuance of cryptocurrencies for Google Pay."

It can be understood that whether building a "blockchain wallet" or developing blockchain node services (equivalent to "cloud services" in the Web2.0 era), both are foundational infrastructures in the Web3 field, even "entry-level" services. Google's Web3 thinking is clear; regardless of how this new field develops in the future, it still wants to be an infrastructure provider in the new world. Why Now? Some industry insiders provide another interpretation of Google's layout in Web3: on one hand, it is about laying out the infrastructure for Web3; on the other hand, it is actually for the development of its own cloud services to compete with cloud service providers like Amazon's AWS and Microsoft's Azure.

Google's parent company Alphabet's Q1 2022 financial report shows that Google Cloud revenue grew 44% year-over-year to $5.82 billion, but the total still lags behind AWS ($18.44 billion) and Microsoft Azure ($11.45 billion). AWS already occupies about one-third of the global cloud service market.

Google Cloud is becoming increasingly important for Google. Alphabet's Chief Financial Officer Ruth Porat stated that the growth rate of Google Cloud services has surpassed that of its core advertising department, and the fastest-growing employee base is in the cloud department.

Some industry insiders believe that the establishment of the Web3 team by Google may help promote the growth of its cloud services and narrow the gap with AWS and Microsoft Azure. In the digitalization process, cloud business has become a major growth point for Amazon, Google, and Microsoft | Visual China However, Google faces significant challenges. Since 2015, Microsoft has been providing support for blockchain developers, and Amazon launched its own blockchain support service in 2018. In 2021, Marta Whiteaker, Director of AWS Marketplace, revealed, "Currently, 25% of Ethereum's global workload runs on AWS."

Compared to other giants, why did Google, which has maintained a conservative attitude towards Web3, choose to establish a Web3 team at this time? Gartner Research Vice President Christophe Uzureau stated, "Google may be concerned that the development of Web3 will impact its cloud services and advertising business, gradually diminishing Google's influence on the digital ecosystem."

From this perspective, Google's layout in Web3 is still a competition in the Web2.0 field. What Kind of Web3 World Are We Heading Towards? "As a potential major player in the blockchain field, Google's arrival will not be welcomed by the entire community," Lory Kehoe stated in an interview with TECH MONITOR.

"Major players" in the blockchain field are always controversial. In June 2018, a large number of Ethereum, Bitcoin, and other blockchain nodes were deployed on AWS, and due to AWS's downtime, the operations of cryptocurrency exchanges like Coinbase and Binance.US built on it were also forced to halt. This is a harsh reality for Web3 practitioners; it is clear that the "decentralized" part of "decentralized finance" still has some way to go in certain situations, and AWS (or Amazon) has shown a dominant position in both the web2 and web3 eras.

Similarly, Google's entry has also raised people's vigilance. "Decentralization is a key principle of the Web3 economy, and centralized blockchain infrastructure may undermine it," Lory Kehoe said.

For example, on June 8, 2013, Feathercoin (FTC) suffered a "51%" attack. This means that if a single entity can control more than half of the total processing power of the FTC network, they can reverse confirmed transactions and even prevent new transactions from occurring. While FTC was under attack, the website also suffered a DDoS attack, making it difficult for users to withdraw funds. Since then, FTC has fallen into obscurity. Its price plummeted and it is no longer listed on any mainstream exchanges, suffering a devastating blow. Ethereum node service provider Infura has been fully acquired by blockchain technology company ConsenSys, founded by Ethereum co-founder Joseph Lubin | CryptoNinjas Many attribute this historical "centralization" to over-reliance on cloud service providers. To avoid centralization, new infrastructure providers are gaining attention, such as Infura, which runs nodes distributed across various locations, even in users' homes. However, Infura itself continues to grow, becoming the largest node service provider for Ethereum, holding over half of the market share. The recurring Infura downtime incidents once again demonstrate that for blockchain, which claims to be "decentralized," large-scale promotion still relies on centralized infrastructure.

Moxie Marlinspike, founder of the well-known encrypted communication application Signal, pointed out this paradox in his blog, stating, "Even many geeks do not want to run their own servers. Even a large software company does not want to run its own servers. This is why those cloud computing vendors succeed. The same applies in the Web3 era."

In his view, whether something is "decentralized" may not be important.

"One strange thing I've always found about the cryptocurrency world is the lack of attention to client/server interfaces. Blockchains are designed as peer-to-peer networks, but not to allow your mobile device or browser to actually become one of those nodes," he said. "Imagine that every time you browse the web using Chrome, your request first goes to Google's servers, then is routed to its destination (the blockchain network) and back to Google. This is the current situation with Ethereum."

Lory Kehoe also believes that, in reality, users may not care too much about whether the products and services they use are fully decentralized. "If Google develops a more user-friendly service that fills a market gap, then even if that service does not reach the level of decentralization, people will still go there," he said. "That's Google's power."

Just as Web2.0 expanded new digital scenarios based on Web1.0, Web3.0 will continue to broaden the boundaries of the digital world based on the first two. The three are not mutually exclusive.

A Web3 entrepreneur told Geek Park, "Web3 is a free world where everyone has the right to participate. Therefore, I don't think Google has any advantage. Facebook's failure in the digital currency Libra project is an example."

"The struggle between centralization and decentralization will always exist; it is a cultural and institutional struggle, not limited to the technological field, but a struggle for the development of human society." he said.