When Google enters a new market, it’s probably worth watching to see what happens next, even if that market is for a new technology no one really understands.
Bitcoin and blockchain are two terms which are increasingly being bandied around, but a lot of people are still not quite clear about what either term means.
So far what’s probably relatively widely understood is that blockchain is a system of recording a transaction between two computers and bitcoin is the digital currency for the transaction itself. In other words, blockchain is the basis for digital currencies such as bitcoin.
Another thing people seem to accept is that both blockchain and digital currencies – or cryptocurrencies, as some call them – look like they’re here to stay, and they’ve reached a level of popularity which now represents a multibillion-dollar global market.
To illustrate, a recent valuation of the entire global cryptocurrency market suggests that there are $64 billion worth of digital currencies presently in circulation. The best-known, and first, digital currency is bitcoin, which accounts for $36 billion of that amount.
Furthermore, it helps the credibility of the blockchain-cryptocurrency market when large, mainstream companies and organisations not only discuss it to try and understand it, but they also invest tens of millions of dollars in developing a presence in that market.
This is what Google looks to be doing.
Last month, the effective owner of the worldwide web and internet invested $25 million in a company called CurrencyCloud, which is a provider of cross-border payments systems.
This week, according to a report TechCrunch.com and elsewhere, Google has invested yet more of its limitless supply of real money into the world of virtual money.
The company took part in the $40 million Series B funding round of a company called Blockchain, which is not the same thing as blockchain the technology – it’s just named after blockchain and uses blockchain for the purposes described above; that is, to provide bitcoin services.
Not much is known about Google’s investment, but a number of other companies took part, and the investment round was led by Lakestar.