Anyone who still thinks blockchain’s encrypted ledger technology is just an account book for cryptocurrencies is in for a squirt of high-octane disruptive diesel in the eye. Its potential to decentralize businesses and organizations could be the biggest technology wave to crash since cloud computing infrastructure.

Erasing the middleman from all kinds of transactions could create a whole new peer-to-peer economy. There are beginning signs of it disrupting and decentralizing cloud and even making regular folks’ laptops and smartphones the world’s new compute providers.

Blockchain’s momentum is building palpably in Silicon Valley and beyond, and it won’t be long before it changes the game in many domains, according to Al Burgio (pictured, left), founder of the DigitalBits Project, Fusechain Inc. and Console Connect Inc.

“It’s a matter of moments, not years,” he said. “If you’re not paying attention, you need to be paying attention, including if you’re in the cloud industry.”

Burgio and Matthew Roszak (right), co-founder of Bloq Inc., spoke with John Furrier, host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during the Global Cloud and Blockchain Summit in Toronto last week. They discussed blockchain’s prime position to disrupt industries around the globe, regulatory speed bumps and the decentralization of cloud. 

Enterprise customers of all sorts will soon be exploring what blockchain can do for their businesses and applications, Burgio pointed out. Along with consumers, they make up a rich vein of people who will be using blockchain technology. The question is: To whom will they turn?

Major cloud providers such as Amazon Web Services Inc. have partnerships with blockchain companies. And Microsoft Corp. just announced a simplified blockchain-as-a-service offering. But some might argue that these moves are too shallow and cursory to compete with blockchain startups obsessing day in and day out over the technology’s innards. 

“Today, the lightweight version is to say, ‘Yeah. I have a blockchain as a service strategy,’ and that’s like, ‘Well done’ and check the box,” Burgio said. “Now, the question is: How far in this new world will they go down?”

Blockchain startups decentralizing storage and compute resources are posing big, potentially threatening questions about the future of cloud computing. Will megarich, megapowerful cloud providers meet the challenge and swing the pendulum in their favor? Or will the decentralized, peer-to-peer revolution steamroll them into history? 

CIOs calm as decentralized cloud storm gathers

Currently, blockchain is not exactly the bread and butter of most companies. Just 1 percent of surveyed chief executive officers have adopted any blockchain technology in their organizations, and only 8 percent are entertaining short-term plans to do so, according to Gartner’s 2018 CIO Agenda Survey.

“This year’s Gartner CIO Survey provides factual evidence about the massively hyped state of blockchain adoption and deployment,” said David Furlonger, vice president and Gartner fellow. “It is critical to understand what blockchain is and what it is capable of today compared to how it will transform companies, industries and society tomorrow.”

This may be because the technology is complicated, and the pool of people who get it is still somewhat limited. This does not mean that there aren’t people getting ridiculously rich from it and from the cryptocurrency market already. Bitmain Technologies Ltd. is the world’s biggest supplier of the virtual pickaxes workers use to mine bitcoin. This month, it nailed a $1 billion pre-IPO round of funding that valued the company at $14 billion.

“And the amount of money they’ll raise will eclipse what Facebook raised,” Burgio said. 

The global blockchain technology market will reach $7.6 billion by 2024, according to a report from Grand View Research Inc. What must take place in the interim for blockchain to hit that number? The ecosystem around blockchain will likely pour more efforts into simplifying and democratizing the technology, according to Burgio. Microsoft’s announcement is an important milestone that suggests blockchain is on the cusp of going mainstream.

“I think it’s very important that this isn’t an ICO, two kids in a garage saying their doing something with blockchain,” Burgio stated. “This is a massive, multibillion-dollar company, and making a decision like that is not trivial. It’s many, many departments, a lot of resources, before such a thing’s announced.” 

Disruption 2.0

Perhaps what companies need to get them paying attention are examples of blockchain disrupting industries. In fact, blockchain may pose a threat to the very life of some companies, according to Don Tapscott, chief executive officer of The Tapscott Group and author of “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World.”

“Everything that the corporation does could be done by software,” he told theCUBE last year. Operations kept inside a firm for reasons to do with trust and free market capitalism, can suddenly bust out with blockchain’s trustless, encrypted distributed ledger. “Why do you need a $70 billion corporation to do what Uber does? It could be done by a distributed ledger with some smart contracts and autonomous agents,” he added.

What is left of the hypothetical corporation that dies at the decentralizing blade of blockchain? There are the services rendered, obviously; even without Uber the corporation, there are still paid drivers. And there is the software itself as well as the compute, storage and the hardware it runs on. Who will provide them? Will the cloud incumbents decentralize the stack and become the suppliers to the decentralized peer-to-peer software non-companies of the future? Or will some revolutionary peer-to-peer infrastructure economy emerge?

Insurgents battle incumbents for chips off the cloud block

In a Medium post titled, “Here Come the Cloud Killers —Decentralized Services on Ethereum,” WaySay LLC Chief Technology Officer Bobby Ullery predicted a paradigm shift that will enable miners to sell the unused resources on their devices in a peer-to-peer network.

“Soon, the concept of a server itself will change significantly  —  from rentable virtual machines and services in a ‘cloud’ like AWS to a ‘fog’ spread across any device in the world with computing capabilities and a network connection. Your phone, your laptop, and yes your refrigerator,” Ullery wrote. “Amazon Web Services, Google Cloud, Microsoft Azure, and every other cloud on earth is officially on notice. You’re old news. Dinosaurs. Prepare for disruption.”

Other industry experts don’t foresee a full takeover but rather a transformation of the way cloud companies provide resources. Although individual peer-to-peer app hosters could snatch an unknown portion of the market from the cloud, AWS probably won’t heave its last breath anytime soon, according to engineer and author Svetlin Nakov.

“Most probably, the hosting companies and the leaders in the cloud industry will be the future miners in the decentralized clouds, because they already have experience providing high-quality hosting and cloud services at efficient price with high up-time and excellent service,” Nakov wrote.

Ullery’s premonition has materialized on earth in the form of iExec, “the first blockchain-based decentralized marketplace for cloud resources, powering applications in the fields of artificial intelligence, fintech, scientific research,” according to the startup’s website. Miners install a virtual machine on their devices and earn digital currency for sharing their resources.

As blockchain and cryptocurrency gather steam in the U.S. and outside, the opportunities for disruption and innovation will all but hit cloud incumbents over the head, according to Roszak. Even now, startups are increasingly turning to initial coin offerings instead of comparatively leaden-legged venture capitalists for fast funding.

“I think there’s going to be convergence,” Roszak said. “Smarter players will engage and figure out their models in this new crypto and tokenized era.” 

Here’s the complete fireside chat, part of SiliconANGLE’s and theCUBE’s coverage of the Global Cloud and Blockchain Summit:

Photo: TheDigitalArtist/Pixabay