(IBM) is betting heavily on blockchain technology, while many chip makers in Silicon Valley are protecting cryptocurrencies.
The Blockchain technology will be one of the largest capacity users in 60 IBM data centers rented worldwide in 2018, according to Bloomberg. The boom in the blockchain products and services market could continue to drive new revenue streams for the old line technology companies like IBM and Microsoft Corp.
Even Oracle Corp., based in Redwood City, formed its own Blockchain Cloud Service in October.
"All these things will have a new life thanks to the chain of blocks," Jerry Cuomo, vice president of technology at IBM Blockchain, told Bloomberg. "Our sales team loves blockchain because a customer that is buying blockchain rarely leaves the store with only blockchain, they go with several things in their cart."
Blockchain is the technology used by cryptocurrency users to create and record transactions instantly. Financial institutions are slowly approaching cryptocurrencies and blockchain networks could eventually facilitate the issuance and transfer of financial values, currencies, gift cards, mobile minutes, loyalty points and energy credits.
In addition to all those benefits, the use of cryptographic signatures prevents fraud, making blockchain-based transfers one of the most secure online transactions.
It is expected that the sector of products and services related to Blockchain reach $ 7.7 billion in 2022, according to the researcher Markets & Markets. IBM was at the forefront of blockchain technology, offering code to an open source project and allowing startups to use the technology for free in their cloud, according to Bloomberg.
Many of the most prominent venture capital firms in Silicon Valley have also opted for Bitcoin and Blockchain investing hundreds of millions of dollars in cryptocurrency startups:
The largest investors of VC cryptocurrencies
Despite its potential, Silicon Valley chip makers are not moving as fast in the cryptocurrency market. Companies such as Nvidia Corp. based in Santa Clara and Sunnyvale-based Advanced Micro Devices (AMD) produce graphic processing units, or GPUs, that are used by cryptocurrency "miners".
According to The Wall Street Journal, none of the chip makers wants to rely too much on supplying the cryptocurrency market, which has proven to be volatile: any disruption in the underlying technology can drastically affect the value of mining. So far this month, the value of bitcoin, the best-known cryptocurrency, has rebounded, reaching a point close to $ 20,000, before falling briefly to $ 11,000 and then rising again to $ 15,181 on Tuesday,
In addition, cryptocurrencies are not having a dramatic impact on the final results of chip makers. Nvidia earned about $ 220 million in revenues during the last two quarters driven by the demand for cryptocurrencies, a number that represents only 5 percent of its total sales. AMD CEO Lisa Su told the Wall Street Journal that she only expects cryptocurrency demands to generate a one-digit percentage of the company's 23 percent growth in 2017.
It remains to be seen how fast block chains and cryptocurrencies impact large companies. About six out of 10 large companies have blockchain technologies under consideration, according to Juniper Research. Two thirds expect the block chain to be integrated into their systems by the end of 2018.
