Down almost 40% in 2022, this FAANG stock is setting itself up for a lucrative future

There are few other companies that are as prominent and influential in the development of the internet as we know it today Alphabet (GOOG 2.88%) (GOOGL 2.83%). The tech giant has its hands on just about every niche of the internet from the search engine, to the cloud services, to its own smartphone.

Despite its success, Alphabet recognizes that a new frontier has the ability to help usher in a new age of the internet known as Web3.

The next iteration of the internet is being built

Unlike Web2, which Alphabet’s Google has dominated, Web3 refers to the next generation of the Internet, which focuses on decentralization, security and interoperability between different protocols. To achieve this, blockchains have become the building blocks for developers due to their inherently decentralized and secure nature.

Back in May of this year, Google formed a Web3 division to exploit the “enormous potential” that Web3 possesses. While still in its early stages, Google has already released a handful of innovative solutions that should ensure the company is able to maintain relevance in the Web3 era.

Instead of creating their own blockchain-like Bitcoin or Ethereum, Google wants to “build a giant bridge” between Web3 developers and blockchains by offering node services through Google Cloud. This service, referred to as the Blockchain Node Engine, makes Google the backbone of Web3 and acts as a “Layer 0” for Web3 development.

A node is a container that runs crypto network code and usually runs on a computer or server. It is an important Web3 building block and is necessary for networks like Ethereum to function properly. The more nodes a network has, the more decentralized, scalable and secure it can become.

However, the effort to support, run and maintain a node can be time-consuming and costly. To mitigate this, developers can use the Blockchain Node Engine to build new applications on the blockchain of their choice. By doing so, developers don’t have to worry about installation, maintenance and upkeep. Instead of waiting for nodes to sync with the network, which can take days, developers can start working immediately.

In addition, Google offers state-of-the-art blockchain infrastructure security features that are currently limited in the market. Developers can use built-in firewalls to ensure that only designated machines are able to communicate with each other. And best of all, if Google will maintain the node. If it crashes, the node is automatically restarted so developers can focus on developing.

Currently, only Ethereum is supported by the Blockchain Node Engine, but there is optimism Solana will also become available sometime in 2023, and based on other comments, more blockchains should be added in the future.

A bargain at all times

It may seem counterintuitive or a conflict of interest for Google to embrace Web3 when you consider that a good part of the success it has enjoyed over the past couple of decades stems from allegedly monopolistic business practices that collect user data. Concerns about whether Google will turn Web3 into just another version of the centralized Web2 are probably justified.

But there’s reason to be at least a little optimistic that Google’s Web3 division is aware that this age of the Internet requires a different approach. Fortunately, Google’s head of Web3 strategy seems to be aware of this conundrum. At the Mainnet conference in New York City in September, Richard Widmann acknowledged that the point of Web3 is to maintain decentralization and security, and that “if everything runs on Google, I’ll be the first to say that’s a problem.”

Many believers in Web3 were probably optimistic that it would put a stop to some of the big players in Web2 or at least reveal some of their power. But based on Google’s progress with the Blockchain Node Engine, it seems the company can only increase its dominance of the internet. Although Alphabet’s stock is down nearly 40% this year, investors should see the stock’s recent decline as just another reason to add it to their portfolio for the long haul, considering Google’s current hold on Web2 and its goal of to become a major player in Web3. – aim for success.