The moment for enterprise blockchain has arrived.
Written by: Jill, Chief Strategy Officer at Espresso
Translated by: Luffy, Foresight News
A user on Crypto Twitter actually opened LinkedIn a few days ago and stumbled upon a post from Google's Web3 leader (does this position even exist!?).
The post revealed some details about Google's Layer 1 blockchain product (wait—what?), leaving the entire industry puzzled.
Unlike others, I am not surprised by Google's foray into Layer 1 blockchain. Part of the reason is that I still remember the 'crazy years' from 2015 to 2020: companies from Microsoft, Alibaba to JPMorgan and LVMH almost all launched their own blockchains.
To be honest, objectively speaking, most of the first batch of blockchain experiments from that era ended up in vain. These blockchains became 'symbolic art installations' in corporate lobbies: clients and institutional investors passing by could catch a glimpse of 'innovation' and feel a bit of 'modernity,' but that was about it; don't stop, don't ask too many questions.
By 2018 or 2019, enterprise blockchain seemed to be fading away, but then Facebook popped up with the blockchain project Libra—ah, it was five years too early. Restricted by the Biden administration's regulatory policies and cautious attitudes toward cryptocurrencies, the project ultimately could not materialize. However, when Zuckerberg announced this plan in 2019, it ignited a new wave of FOMO, prompting tech companies from Silicon Valley to Seoul to follow suit, launching another wave of enterprise blockchain projects.
The dilemma of innovation labs
Now, it has been ten years since 'blockchain' and 'distributed ledger technology' first appeared in the memos and board meetings of the Fortune 500 companies (that's right, ten years!). Most of these projects have been stuck in the 'proof of concept purgatory,' unable to truly enter production. Of course, there are a few successful cases (like Kakao's Layer 1 blockchain Kaia is worth mentioning), but overall, most projects have not been able to leave the lab.
'The innovator's dilemma' refers to the phenomenon where established large enterprises often lose market share to more agile and unencumbered emerging companies when faced with disruptive technologies. The book that introduced this concept was published in 1997, just before the internet bubble, and it suggested that large companies set up departments similar to startups (often called 'innovation labs') to mitigate this risk.
Over the past decade, corporate executives have been convinced that innovation labs could shield them from disruption. These labs have been busy rebranding public repositories of blockchain code and running code in testing environments, with most outputs being press releases.
In the past few years, many executives may have reevaluated this resource investment, grappling with whether to continue 'acting as innovators,' pondering whether blockchain is yet another tech bubble (similar to the one that burst shortly after 'The Innovator's Dilemma' became popular on CEO desks). Should they shut down the labs and admit failure? Or pause the experiments, leaving a few people to quietly tinker? Or double down and continue searching for innovations that can genuinely apply to their business? This has become the dilemma of innovation labs.
Apple Chain
I don't know if Google's Layer 1 is a relic of the previous innovation era or a completely new project; I also don't know if it is online or still in development (though the LinkedIn post mentioned a 'private testnet'). Other than the press releases from partners like CME, information about it is scarce. I actually know nothing about Google's blockchain business.
But I know another tech giant is indeed running its own Layer 1 (got to loosely define 'Layer 1'; honestly, in a corporate context, it can only be that way)—Apple.
Apple has never announced a 'blockchain innovation lab,' nor has it released a Web3 strategy or any press releases. In fact, searching for 'Apple Chain' mostly yields news about Apple removing blockchain-related applications from its App Store, rather than news about Apple's self-developed blockchain.
But it just did.
The insider story is this: over the past few years, there was a rather innovative highlight in Apple's Intelligence project—'private cloud computing,' a system designed for private AI processing. And in related tech blogs, Apple mentioned providing an architecture for security researchers that offers verifiable privacy and security assurances: Apple 'will publish the measurement data of all code running on the PCC to a transparent log that is append-only and cryptographically protected against tampering.'
This sounds just like blockchain. It can't be programmed, doesn't support your common DeFi applications, and won't be used by major financial institutions for settlement innovation experiments, but Apple's blockchain might just achieve that elusive 'practicality' holy grail.
By the way, the core contributor to Apple's project @cathieyun has a background in blockchain protocol development; is this unexpected?
Realizing the dream of Web3
If you've spent a few years in the crypto industry, you might still remember the grand dreams of the early days.
Before the rise of yield mining and 'blowing air' mining, before the airdrop craze and infrastructure boom, there was only one dream: blockchain would become a 'trust machine.'
We will not adopt the capitalist model of Web2 platforms, but will embrace decentralized social media, decentralized sharing economies, and decentralized creator markets, which are simultaneously owned by everyone yet belong to no one;
We will no longer rely on the 'fourth estate' of corporate media, but will determine and spread the truth through decentralized prediction markets and oracle services, driven by free market incentive systems;
We will have an open, verifiable global payment and transaction system, rather than centralized, opaque, and extractive financial companies.
Speaking of these use cases, the industry is actually doing quite well. While it hasn't reached the kind of future that glitters with chrome, lush green grass, and flying cars, all the aforementioned fields have already produced tangible products, many of which have even reached mainstream users; perhaps this is a sign of widespread adoption!
Most of these products are developed by startups on public chains like Ethereum and Solana. Some startups (like Circle and Coinbase) have even grown into large companies.
Despite setbacks in mainstream acceptance and adoption, and despite many grappling with the 'lack of use cases,' the industry is actually doing quite well. Moreover, I believe that while the industry is infamous for 'criminals' (there’s SBF again), one can still see that the dream of Web3 remains as grand and beautiful as it originally was.
I believe that the adoption of stablecoins, DEXs, and prediction markets on Ethereum will continue to grow; but I also think that the way blockchain is adopted is about to undergo a significant shift. Unfortunately for dreamers, this shift may not be as dreamy, but rather more pragmatic, more like 'Apple Chain.'
The 'uninteresting' practicality of Web2.5
It's time to mature. Idealists should embrace pragmatism. We must accept that the 'trust machine' we create is actually just a ledger, distributed database, and middleware.
Let me be clear: I think this is great. It benefits the industry and represents the best opportunity for real innovation over the past decade to achieve scalable impact. It is through this method that the processes ensuring the flow of global assets and data will change, and the technology we create will change lives.
Unlike past corporate experiments, I believe the moment for enterprise blockchain has arrived. They will become the primary channel for pushing this technology into the world. This is happening not only because the regulatory environment is loosening, but also because the technology, use cases, and related talent have matured enough for blockchain to enter actual production.
But I dare say that the large-scale adoption of blockchain by enterprises will not resemble the ideal envisioned by innovation labs, nor will it be like what the Enterprise Ethereum Alliance bragged about in 2017. I also do not believe that enterprises will position blockchain as 'neutral infrastructure.' Just look at what @gwartygwart has to say:
'The funniest part is that line, 'Tether won't use Circle's blockchain,' making Google seem like a neutral arbiter. Let's not forget, this company once manipulated its own ad auctions to screw over vendors, and now has become the only hope for 'ensuring fairness.'
Listen to @ethereumJoseph, who has been fighting on the front lines for a long time:
'Permissioned enterprise chains were tried years ago and failed. Why? Because no one trusts the central controllers of these chains enough to want to settle on them. The 'delisting' drama has played out repeatedly for decades.
Indeed, enterprise blockchain is unlikely to be the kind of completely open, permissionless system that dogmatists demand. So, unsurprisingly, they are also not likely to be used to protect civil liberties or empower dissenters as cypherpunks had hoped.
I guess Apple is proving its commitment to security researchers with 'append-only, cryptographically protected transparent logs,' perhaps the most 'cypherpunk' way for corporations to apply this technology.
On the contrary, enterprises will develop and adopt blockchain solely because of its 'practicality,' which can solve the one issue that matters to them: increasing profits. This is Web2.5.
Several fields have already shown this trend:
Robinhood is using tokenization as a financial engineering tool to push U.S. stocks to European retail investors. Vlad Tenev talked about this with great flair, which can deeply impress us dreamers, but let’s not get it wrong: this is more like replacing back-end databases with blockchain (along with some geographical arbitrage), far from Satoshi Nakamoto's vision. Things were meant to be this way.
Stripe is acquiring and developing stablecoin technology (including its own blockchain!), likely aiming to achieve global distribution at a lower cost than existing systems. Corporate motives and corporate technology can bring about tremendous impact and distribution. I accept this approach.
I think enterprises will adopt blockchain for these goals:
Enterprise blockchain can serve as payment infrastructure specifically tailored for AI agents, which existing financial rails cannot redesign to achieve;
In the era of deep fakes and 'post-truth,' using hash-linked data in a tamper-proof append-only ledger to timestamp images and videos is a good method for enterprises;
As @diogomonica said, a public company's Layer 1 might become the new standard for developer platforms, enabling enterprises to create an open ecosystem composed of composable applications.
For these reasons, it's entirely reasonable for Google to develop a blockchain platform. It's even more reasonable that this is led by Google Cloud, as it has been working on foundational, transformative yet underlying technologies. These blockchains are ultimately just that.
This is not a revolution, but perhaps a true adoption. To the new 'dominators' of the crypto industry, I want to say: Welcome.