Crypto feels like the Wild West – but really, Big Tech is holding the puppet strings


To learn about major technology evolutions, from AV club geeks to the biggest campus players, look no further than the influence of companies like Amazon and Google. They have crept into every corner of contemporary life; they possess disproportionate powers and exert imperial control over the digital landscape – and it seems that their next accomplished fact is to take over the future of finance.

I've worked closely with a number of cryptographic startups – I've even started one – and I witness the tense relationship they have with great technologies, especially the leaders. of cloud computing. Cryptocurrency requires easy access to large amounts of computing power. Only a few companies can provide them on a commercial scale, which gives them disproportionate control over the entire cryptography market.

Think about what would happen if Amazon suddenly decided to close each cryptocurrency currently in its cloud. Multiple exchanges would be blocked and thousands of individual funds would be frozen. Markets would inevitably collapse and probably fall – all because of the whims of a company operating autonomously. It is an inconceivable threat in other areas of finance, but it casts a shadow over the independence and encrypted nature of cryptocurrency.

These fears may seem unfounded, but there is enough to be alarmed. Amazon Web Services does not support the Bitcoin elliptic curve, secp256k1, which is crucial for Bitcoin private key generation. It does not matter if the hardware and firmware support the curve – AWS does not do this explicitly. Even worse, Amazon's motives are totally opaque. All we really know is that Amazon is actively and intentionally creating roadblocks for cryptography.

I am fully expecting this tension to intensify, particularly because of the profound philosophical differences between the major technology and cryptography markets. Big Tech, throughout its history, is committed to downward control and centralized management, but the state of mind of cryptography is exactly the opposite. His acolytes consider accessibility, equality and decentralization as guiding principles. One industry is totally dependent on the other, but its missions are in direct opposition. It's an arrangement that makes friction inevitable.

The question is: what would force a company like Google to block a fledgling industry like cryptocurrency? One of the explanations we must recognize is that cryptography has not always been its best advocate. A wave of dark coins and dubious claims have led companies such as Facebook, Google and Twitter to ban all advertising for ICOs. This decision was justified and probably even necessary, given the way in which unsavory promoters used them. However, this only explains the partially animus.

The most likely cause is that big tech companies are fundamentally and necessarily aligned with other powerful entities. These include global governments, multinational corporations, and 21st century titans. Cryptocurrency is not content to challenge these structures of power; it aims openly to disrupt them – first by making cryptocurrency a reality, then by making its ideals a certainty.

We have already seen how threatening cryptography was for those at the top. As these anxieties increase, with whom will Microsoft and others join, who are: cryptographic startups or their elite comrades?

There is no reason to believe that cloud keepers have excluded or expelled any cryptocurrency. But they certainly have the means and incentives to do so, creating an existential risk for investors and cryptographic developers.

Cryptocurrency is approaching a literal crossroads, where it will have to choose its relationship with advanced technology. The first option is to negotiate a truce similar to net neutrality. Crypto continues to rely on large technologies. In exchange, cloud providers agree to treat all cryptographic companies on an equal footing and pledge never to limit service or speed. This option is attractive because, quite frankly, the resources of something like AWS are hard to replace. The hard part is to get the membership of major technologies and regulators.

The other option is to double Crypto's spirit of decentralization and to circumvent or minimize the influence of big technology. Rather than rely on a single vendor, organizations can prioritize redundancy and distribution to reduce the risk of bringing critical infrastructure components offline. My own company stores keys and maintains critical infrastructure on different vendors and uses another for backup. There are also challengers with a cloud monopoly that offer comparable computing power in a less restrictive environment. One day, it may be possible for intrepid crypto-entrepreneurs to completely avoid Google or Amazon.

At present, crypto markets feel like a wild frontier. But in reality, it is the illusion of freedom in the largest cage in the world. Increasing centralization is unsustainable in its current form, but that does not mean that blockchain entrepreneurs must feel contrite. On the contrary, we must continue to be diligent and considerate when laying the foundation for our fledgling industry.

Bob Rutherford

CEO and founder of Hedge

Bob Rutherford is the CEO and Founder of Hedge, a software platform that allows traditional financial companies to offer digital currencies to their clients under the current regulatory framework.