Google, Apple and Facebook feel threatened by blockchain

Rage Comment : This article excerpts some of the talks about blockchain by Ethereum founder Vitalik Buterin, who believes that the innovation of blockchain technology is more extensive and not restricted by region; and only companies that see the advantages of technology will participate in the exploration and development of the technology, such as Microsoft; while Google, Apple, Amazon, Facebook, etc. have not taken any action, which shows that they regard the technology as a risk. Compared with the United States' reliance on traditional technology, China has a better environment for technological innovation, and the development of blockchain technology in China is also changing with each passing day. Therefore, Ethereum cares about those companies that can recognize the benefits of blockchain technology.

Translation: Annie_Xu

Vitalik Buterin, the creator of consensus computing system Ethereum, said Google, Facebook and Apple’s “blockchain blind spot” shows the technology poses a threat to those companies.

Buterin said Ethereum has heard from banks, energy companies, manufacturers, and governments.

“Google, basically no involvement in blockchain technology; Facebook, also no involvement; Apple, still the same.”

Gafa companies (Google, Apple, Facebook, Amazon) have explicitly ignored blockchain technology, but Internet finance still hopes that they can develop new platform banking models (like Taobao in China). Travel accommodation service company Airbnb acquired some cryptographic engineers last month, but denied that it is interested in blockchain technology.

Vitalik Buterin

This phenomenon attracted the attention of Buterin, who told the media:

“Google and Uber, etc. didn’t contact us or attend any blockchain technology meetups; that was the blind spot that piqued my interest.”

"Why are those industries not moving? Is it because there is no interest point that attracts them? Is it because we have not found the right entry point? Is it because they mainly see threats instead of opportunities like others see?"

"The speculation that they feel threatened may be the correct answer and it has gone beyond the limit of what people can accept."

Microsoft

Buterin said Microsoft has been very good at embracing and developing blockchain technology.

"Many organizations are interested in applications like user sovereign identity because they think they can use it. Just look at Microsoft, they have developed a lot of cloud software and enterprise-level software."

“The shift from a cloud model where the cloud controls everything to one where the user controls more is good for them, and they see blockchain technology as good for a lot of reasons; yet if you look at uPort, logging into Facebook is a competition.”

Buterin mentioned a firm belief: We should remember that this is not just about institutional progress.

“A lot of times, startups are a way to start something; a lot of times, Silicon Valley tycoons won’t participate, but startups will; and what’s even more interesting is that a lot of times, these startups have nothing to do with Silicon Valley at all.”

“So the Web 2.0 era seems to favor the West Coast, while the blockchain development region is broader. As you can see, it includes the West Coast, the East Coast, Toronto, London, and China. This is also an aspect that makes many people excited, that people are collaborating across disciplines and internationally; and Ethereum strives to be diversified in these two dimensions, and I also think this approach is very effective.”

China

Ethereum recently announced that its DevCon2 conference will be held in Shanghai, and coincidentally, the second International Blockchain Summit will also be held in Shanghai from September 19 to 24. Buterin will be attending both conferences and will obviously be spending a lot of time in China.

He said:

"There are a lot of interesting things in China. In fact, the blockchain community in China has existed for 6 years, but many people don't know it exists. In the beginning, there was a Bitcoin community just like in the United States; it's just that China is more focused on Bitcoin mining and trading because they have the hardware equipment and can mine better than others. Electricity is still very cheap in some places, and a large part of Chinese culture welcomes things that can quickly make stable profits."

“China also has a much looser regulation on trading than the rest of the world, which is a little surprising given how China ranks in transparency and freedom. But I think the reality is more nuanced.”

Perhaps the focus on Bitcoin has kept China from paying too much attention to the underlying ledger technology, but China’s interest in blockchain has grown dramatically.

“Chinese institutions have started to participate, and it was a year after the world started; but now it is experiencing a sharp growth. I remember when I went to China in 2014, everyone was talking about Bitcoin; I went to China again in 2015 for the Blockchain Summit in October; this time I saw many stock exchanges, governments, banks, and IT companies began to explore how to respond.”

The Ethereum Foundation announced a partnership with Wanxiang Blockchain Labs to promote blockchain technology education and development in China. Buterin also visited more blockchain communities in major cities in China.

“What Beijing has met are basically scholars, not those in the field of encryption, but those in the application field.”

"Banks are very interested and Changchun hopes to establish a banking alliance. Of course, there is no such alliance yet, but people are actively promoting the project."

Compared to the United States, China's technology is more advanced. For example, Americans are more accustomed to 3% transaction fees, rebates, and three-day settlement periods; this is not the case in China. The Chinese system is instant and as efficient as blockchain, and sometimes even higher than blockchain.

Ethereum

Buterin also talked about the development of Ethereum, saying that the energy trading Dapp (decentralized application) in cooperation with New York ConsenSys is a milestone. The uPort identity wallet system is also developing rapidly, although the current focus is on internal banking systems, non-financial projects are also beginning to develop rapidly.

Regarding the challenges facing the protocol, Buterin raised several common concerns: proof of stake, scalability, and privacy.

“At the middle level, which is extremely important, there are things that simplify the use and development process; things like wallet security, how to build strong and secure systems to prevent hackers from attacking without reintroducing the drawbacks of centralization.”

“Or if there is a smart contract that theoretically trusts the code, how do we ensure that the code has no loopholes and that the creator will not steal the user’s money? We also need to know people’s requirements for security and fairness. This involves infrastructure and is very application-specific; I think this situation should continue to deepen as the application is developed. Because in some cases, this kind of security issue can basically only be continuously improved as the risk changes.”

EVM

Buterin talked about the various improvements he is doing on the Ethereum Virtual Machine (EVM) last week, including academic work. Because every contract runs on every Ethereum node at the same time, the computational cost of the virtual machine is very high. The virtual machine will only execute nodes after receiving information verified by a digital signature and approved by the blockchain.

"We are always looking to improve the efficiency of virtual machines, so now many design ideas that could have met application needs are ultimately found to be less efficient than expected."

“I think a lot of people don’t really realize that running code to verify a transaction is much simpler than verifying a cryptographic signature, so even if the VM is not efficient, cryptographic signatures will become mainstream.”

“But if you try to use new cryptographic techniques on a virtual machine, new efficiency requirements arise. So when it comes to privacy, we are talking about ring signatures, zero-knowledge proofs, various signatures, or a hybrid of them.”

"To make these run efficiently, virtual machines must provide effective support, which is what we are doing with academics. We have worked with the community to build some intermediate-level tools."

“A lot of institutions have been given permission to carry out projects, some with university support and some in corporate labs.”

Crowdfunding and Tokens

The vitality of the Ethereum community is beginning to show as more token crowdfunding sales are launched, such as DigixGlobal, which raised $5.5 million in a few hours.

Buterin said he was pleased with the results of DigixGlobal’s crowdsale. As for whether there will be a large number of token sales activities, Buterin said:

“To some extent, there may be hype or an economic bubble. We need to wait a year for people to identify areas where crowdfunding and decentralized autonomous organizations make sense.”

“You need to work hard to determine what you want a decentralized autonomous organization to give you. I often ask Ethereum-based startups a question: Can you tell me the advantages of Ethereum blockchain over Excel?”

“If your answer is satisfactory, you have acquired something very interesting.”