How Will Big Tech Break into Crypto?

Blockchain, FinTech, News, Opinion | January 6, 2022 By:

It’s no surprise that big tech and the FAANG companies (now MAANG?) are increasingly putting their attention on Web 3 and the metaverse. The question is not longer if blockchain technology will be adopted by these tech giants, but rather a question which industry adoption moments these companies will choose – and the effect this will have on the blockchain and crypto industries.

While consumer sentiment might skew negative towards these companies in discussions about data, privacy and labor, FAANG companies were worth almost $7.1 trillion in 2021. By contrast, all major cryptocurrencies combined are worth about $2.48 trillion. And yet, the number of people interacting with crypto annually is still marginal compared to the staggering number of users these tech companies have.

While there’s a question of if big tech will squash the very ideals the blockchain is built on (ideals of transparency and trustlessness – the idea that this technology doesn’t even require trust by design), the shift into Web 3 actually gives these companies a chance to rebrand for the next generation of users and help with the mass adoption of crypto. 

While consumer banks and other playing in traditional finance (TradFi) have been slow to wrap their heads around cryptocurrency and decentralized finance (DeFi) as legitimate financial tools, these tech companies forays are starting to land blockchain tech onto the front page of the news – a true marker of widespread adoption and attention.

A Brief History

While these tech companies make headlines with every step into, or even just pondering on Web3, it’s worth remembering that many of these companies actually have played in the space before and crypto has been around longer than most people think. 

The first Bitcoin transaction took place in 2010. Amazon has been running their blockchain-like AWS since 2006. In early 2020, Google partnered with Theta Labs to look into on-chain streaming and Facebook began teeing up their own token, Libra, quietly working with Solana, now a big player in the DeFi and NFT space. 

Leaders at these companies know that to avoid becoming relics of Web 2 (the internet as we know it today), they need to shift their offering into the next wave of technology. And while it’s mostly a guessing game of when big tech will enter the market, almost all the big players have already started to build out teams. It’s well known blockchain tech is extremely complicated and to develop natively on it, hordes of developers fluent in niche languages like Rust and Solidity are needed. 

So how and when will big tech actually be making their moves into the space?

It depends on their niche. The big tech companies mostly already specialize in the industries flagged as big trends for crypto in 2022: gamifying, socializing and the metaverse. 

Google is a lifeline for most people and a go-to source of knowledge; not to mention all the content they host through YouTube as well. If Google is thinking about how they can keep their position in society, they need to be thinking about how they can be a source of crypto knowledge as mass adoption of crypto becomes a reality. They might also look into purchasing on-chain data companies to migrate their current data and ad revenue models onto the blockchain and into becoming a default analytics company for all things crypto. 

Apple is a consumer electronics company but mobility plays an increasingly important role in crypto – most people trade and check finances on their phones. It might make sense for Apple to move into the hardwallet space and continue building out their messages of ‘choosing iPhone means choosing security’ which dovetails super nicely with many of the blockchain ideals of security and trust. 

Amazon, as mentioned, already uses blockchain-like tech for their cloud computing. Building this out to host other products on-chain could be a great new revenue stream. Another huge chunk of Amazon’s business are gift cards, which could easily be pivoted into a cryptocurrency offering. Chances are once supply chain issues clear, Amazon can fire on all cylinders forward to get into this new space.

A Means to an End

Overall, the way that big tech is going to branch into Web3 and the Metaverse is by iterating on their pre-existing niches to offer new generations of blockchain-driven products. And while crypto and big tech don’t always see eye to eye, FAANG companies’ industry entrance should be seen as competition to crypto native companies, but rather as a signal that wider adoption is coming.

These big tech companies don’t necessarily pose threats to crypto companies like Coinbase and Exodus because they’re more focused on adopting blockchain tech for their own lanes; not necessarily immediately encroaching on crypto products like non-custodial wallets and exchanges. 

All in all, it is a matter of guessing which moments these companies are waiting for and when those plays will be made; which overall, bodes well for blockchain and cryptocurrency climbing towards the shiny status of mass adoption.