Google To Allow Crypto Payments With New Coinbase Deal

Principal lessons to learn

  • Google, along with Coinbase, have reached an agreement that will let Google accept cryptocurrency as payment for specific Cloud computing customers.
  • It’s a decision that will let Google target the most cutting-edge crypto and Web3 companies that wish to use digital currencies as a payment method.
  • Coinbase will receive a share of these funds, and it allows Coinbase to keep diversifying away from earning revenue based on the volume of trades.

Although the Google Cloud Next conference may not draw the same amount of attention as Apple’s annual conference or Tesla’s AI Day, there have, however, been some exciting innovations that are expected to emerge from this year’s conference.

Because Google is now among the most seasoned players in the world of tech, It may be a surprise for many that they are planning to begin accepting cryptocurrency as a payment method for their cloud computing services.

They’ll be using Coinbase to handle the transactions. It is await to be in operation in the first quarter of 2023.

This could be a huge boon to both firms as they try to broaden their services and diversify their business strategies. For Google, it gives them access to rapidly growing businesses within the Web3 sector that many belief has a lot of potentials, despite recent stumbles.

For Coinbase, they will be able to earn an income stream that isn’t directly tied to trading volume. This is crucial for the security of the company, which recently laid off more than 1,000 employees due to the high trading volume because of the crypto winter.

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What do we are aware of about the matter?

Cloud computing is an essential factor in the future of their business. This sector is constantly growing, is extremely profitable, and lets them diversify their earnings far from traditional advertising.

This agreement with Coinbase lets Google fill an unmet need by allowing businesses in the crypto industry to pay for cloud storage services using digital currency. Coinbase has no significant competitors that permit companies to pay for cloud storage.

This is significant because the underlying concept of many crypto and Web3 businesses is a core idea that seeks to move away from using fiat currencies like that of U.S. dollars. With the right opportunity, a lot of these companies will choose to utilize services that permit payment in crypto. However, currently, they don’t exist in size needed.

The offer won’t be widely used at first. Google intends to provide this service only to a small amount of Web3 customers whose transactions are processed by Coinbase Commerce. Coinbase Commerce accepts ten digital currencies, including the most famous names you’d expect, such as bitcoin cryptocurrency, bitcoin cash, ethereum, litecoin, and yes, dogecoin.

Google can offer an option they currently don’t provide and will increase the number of users they have and its revenue. For Coinbase, they’ll be charging a portion of the charges that are generated by their platform and diversify their income stream free of retail trading fees.

It’s similar to how every other payment service operates, whether it’s Apple Pay, Amazon Pay, Visa, or Mastercard. These networks work with a tiny percentage to facilitate the transaction.

The only difference is that these transactions are made in cryptocurrency, not fiat currency.

The future cryptocurrency plan are on the table.

This could be one of the first steps in Google’s journey into the realm of cryptocurrency and Web3. They also have stated that in the context of their new alliance, they are planning to think about ways to assist other companies manage their crypto portfolios.

It’s a field which is in its beginnings. However, Bitcoin enthusiasts believe that in the future, we will discover more and more businesses that have bitcoin as a part of their balance sheets. Currently, this approach has been restricted to a tiny amount of, admittedly quite large, companies like Tesla, Coinbase, Microstrategy, Block, and Riot Blockchain.

The problem for these companies is how to keep their assets. The traditional finance system relies upon trusted financial intermediaries to store assets on behalf of companies. Companies such as Amazon, Apple, and Microsoft have billions of dollars of cash at any one time, and it is stored in banks with major names such as JP Morgan Chase, Goldman Sachs, and Bank of America.

They are monitored and trusted, so businesses can charge their money to be secure. The process can get quite complicated when dealing with cryptocurrency.

The digital currency is, as such they are decentralized. This means that no trusted third parties are required to facilitate transactions, and generally, all the responsibility for the security of assets is direct to the owner.

There are alternatives available for trading assets on exchanges; however, the market has been infamously implicated in several high-profile financial collapses in which investors have suffered millions of dollars.

Similar to the gap in payment services Google wants to fill, there’s an opportunity to introduce an untrusted third party into crypto storage. It’s quite ironic, considering that Bitcoin was designed to stop the possibility.

Coinbase offers a service that facilitates this with the program called Coinbase Prime. It will be interesting to see what happens if Google promotes this program and if it will entice less cautious companies to take a dip in crypto waters.

The battle for market portion in the cloud

Cloud computing is very fast becoming the next big battleground in big technology. The market has grown exponentially over the past few times and is currently worth $203.5 billion. Cloud computing refers to an IT service that allows businesses to provide resources such as storage of data, which is essentially rent.

It works exactly as it does with your iPhone cloud and Google Drive. Moving your files or photos to Google’s or Apple’s servers means you can still access your files without the need to increase the storage capacity on your phone or laptop.

For businesses, it’s the same. Instead of building massive servers to store all their data, they can lease more and more storage from a cloud computing service as they expand. This means they don’t have to purchase storage that they don’t need and can overgrow as the business grows.

It’s a lucrative business, and the number of companies that dominate their market shares in the cloud computing market is a list of the top companies in Silicon Valley.

Amazon Web Services is the leading player with 34% of the market, followed by Microsoft’s Azure with 21% and Google Cloud at 10%. Alibaba, IBM, Salesforce, Tencent, and Oracle make more than 17 percent.

This expansion is predicted to continue, with reports suggesting that the market could reach $1,143 billion in 2028. This is a compound annual growth rate of 15 percent per year.

What does this mean for investors?

Another example of innovation potential is in the technology sector. As technology continues to improve and advance, companies will come up with new ways to market their services and efficiency to share that can create new revenue sources.

Cloud computing is relatively new, but it’s an industry worth more than $200 billion.

This is one reason why the technology sector can be an excellent investment. This doesn’t mean it’s easy, however. The industry has been through an enormous amount of volatility in recent times as well as one of the significant characteristics of the sector is the potential of new companies to break in and shake up the established order.

Stock selection in any industry can be challenging; however, it’s more difficult in the field of technology. That’s why we designed our emerging Tech Kit. The Kit is an investment Kit that uses AI to determine which sectors within big tech are the most appealing and adjusts the balance across the various verticals each week.

These four verticals comprise big-cap tech companies, smaller tech companies, ETFs for tech, and cryptocurrency, which are public trusts. Investors are exposed to the tech sector’s top companies and AI’s ability to make investment decisions.

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Robert Scoble
Robert is the assistant managing editor for HC News, overseeing coverage of markets, companies, strategy and business leaders. Originally from Boston, Scoble began his journalism career in 1997 & now resides outside New York.

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