Hoskinson Warns: Big Tech May Challenge Layer-1 Networks

• Tech companies like Meta, Google, and Apple may challenge Layer-1 networks by leveraging regulatory clarity to establish their blockchain infrastructure.
• Charles Hoskinson highlights how major tech firms could integrate stablecoins and block user access to existing Layer-1 networks for dominance.
• With billions of users and control over operating systems, big tech firms could easily overtake traditional blockchain networks.

Cardano founder Charles Hoskinson has suggested that major technology companies, including Meta, Google, Apple, Microsoft, and Amazon, could disrupt the crypto market. Speaking in an X space discussion, he explained that these corporations could establish their blockchain infrastructure if the United States achieves regulatory clarity.

Hoskinson explained that the adoption of stablecoin legislation would set the necessary conditions for these companies to enter into cryptocurrency business operations. He recommended that companies would have two options by issuing their stablecoins or by working with financial solutions firms like Circle that use blockchain technology.

Existing Payment Systems Offer an Advantage

The payment technology services provided by Apple Pay and Google Pay create strong advantages for the companies which outweigh Layer-1 network capabilities. The already existing user bases and worldwide market access of these companies would allow them to implement blockchain technology within their operations and directly compete against present-day crypto platforms.

Hoskinson emphasized that big tech firms already control the operating systems that power billions of devices worldwide. This could allow them to influence how blockchain services are accessed. He raised concerns that these companies could leverage their market position to limit user access to Layer-1 networks, pushing consumers toward their blockchain solutions instead.

Potential for Exclusive Layer-1 Networks

The Cardano founder also pointed to Meta’s previous attempt to launch a cryptocurrency, which failed due to regulatory obstacles. He suggested that with clearer guidelines, these firms could revive their efforts, potentially launching proprietary Layer-1 networks that compete directly with existing blockchain ecosystems.

Research by Hoskinson indicates the U.S. Congress will pass the stablecoin bill during the next 100 days. This proposed legislation would boost the pace of big tech companies entering blockchain technology thus enabling them to develop their digital financial services.

Big Tech Could Undermine Decentralization

Layer 1 networks face difficulties against big tech because of their regulatory advantages together with their extensive financial backing according to Hoskinson’s warning. The companies could decide to discontinue operating blockchain nodes which might result in destabilizing the operation of present Layer-1 networks according to his assessment.

Tech companies benefit from their adoption of confidential computing because this technology delivers better security performance than traditional trust-execution environments present in blockchain networks. The technological advantage enables their systems to become more attractive for users and developers.

Market rumors suggest that Cardano might form a partnership with Microsoft while Hoskinson makes these comments. ADA currently benefits from positive market sentiment which predicts that its price may rise to re-establish its former peak value of $3.10.