What Microsoft is Really Saying About Ethereum

*faceplam*

[I shouldn’t start a blog post like that, but I couldn’t help myself.]

TechCrunch reported yesterday that Microsoft was partnering with ConSensys, which itself is based off of the Ethereum project. Listeners of my science and tech podcast–Sovryn Tech–know how I feel about everything Ethereum related (it’s all a bunch of hogwash, in my opinion), and certainly I’m no defender of Microsoft (even though some of their moves recently have intrigued me and made me somewhat hopeful for the company).ethereumSo what’s my take on Microsoft partnering with an Ethereum-based company? I think this is important to discuss on the Dark Android Blog because we often discuss blockchain technologies at the Dark Android Project. Well, first off, Microsoft is the first and only major Silicon Valley company to delve into the realm of blockchains at all, having started accepting Bitcoin as payments for some of its digital goods about a year ago. Regardless of what Microsoft and ConSensys (that company name kinda reminds me of the company in the latest Terminator film: Genysis…at least in spelling…hmm) might actually be doing together, there is suddenly this excitement around the idea that Microsoft is somehow validating Ethereum just by partnering with ConSensys, and that this is a sign of Ethereum’s viability.

Nothing could be further from the truth.

And that’s provable by a few points. One, Microsoft hasn’t expanded its acceptance of Bitcoin in nearly a year, and frankly, the ability to buy digital goods from Microsoft with Bitcoin is not readily visible to see how to do, and is almost complex at that. And really all you’re doing is buying a gift card from Microsoft, you can’t just go to the Groove Music Store and buy the latest Def Leppard album (which is great, by the way) or something straight with Bitcoin. If the album costs $12, you’re going to have to buy a $15 gift card with Bitcoin. And Microsoft is using BitPay as its backend, too, it’s not like they’re running their own Bitcoin nodes at all. This fact runs true for their relationship with Ethereum, as well. Microsoft isn’t suddenly accepting Ethereum, they’re letting ConSensys handle all of that. Effectively, Microsoft is offering Ethereum integration as an option, nothing more. If Microsoft REALLY believed in Ethereum (or Bitcoin, for that matter), they would be accepting Ether directly into the company, which they’re not.

[SIDE NOTE: Microsoft has been toying with a more serious “Microsoft Wallet” mobile option for some time, and I could see that taking advantage of Bitcoin’s infrastructure in the future, but that future would seem to be a ways off. This says nothing for Ethereum, in my opinion, particularly since Ethereum–by comparison–has NO infrastructure whatsoever at this time, so I can’t see Microsoft ever going for the “Ether” option.]

The other point to bring up here is that Microsoft throws money around for partnerships all over the place, ConSensys is nothing special in that regard. Many of the partnerships that Microsoft engages in–like many other AAA Silicon Valley companies do, also–end up being total flops (and I predict the same for ConSensys, of course). If Microsoft genuinely believes in what a company is doing, they don’t form a partnership: They buy the company out, straight-up. And that isn’t happening here. Consider Microsoft investing in Cyanogen, Inc. (the company of developers of the Android-based alternative operating systems CyanogenMod and CyanogenOS). It’s a play that if by chance Microsoft’s own plans in mobile fail, they’ll have an Android-based operating system to run to and attempt a new strategy. But Microsoft didn’t buy Cyanogen, Inc., and that’s because they’d like their first-party initiative to take off (Windows 10 Mobile, which while you may think is a joke now, just wait for the Surface phone). Just as Microsoft would like it’s first-party Azure to take off, but hedging a bet on something like Ethereum-based ConSensys is just that: a hedge, not a vote of confidence or validation. Microsoft is too smart a company–especially with Satya Nadella in charge–to do any differently.

So relax. Microsoft isn’t saying Ethereum is a good idea. Microsoft isn’t really saying blockchains in general are a good idea, either. They’re just throwing shit at the wall and seeing if anything sticks.

And I think they’ll find that Ethereum is just that. Shit.

Carpe lucem!

 

donate_svt2