Salesforce Is Getting Into Blockchain. Here's Why That Matters

This photo illustration shows a Vietnamese cryptocurrency investor looking at the latest Bitcoin values on a smartphone in Hanoi, April 12, 2018. Photo: NHAC NGUYEN/AFP/Getty Images

By Nicholas Rossolillo, International Business Times - Business (NYSE:CRM) CEO Marc Benioff often talks about having a beginner's mind -- trying to view the world like it's a new place you've never experienced before. That thinking is leading the company toward developing a blockchain and cryptocurrency solution that Benioff hopes will be ready for the company's Dreamforce 2018 software conference this September. For investors, that means Salesforce could be the latest way to take advantage of the cryptocurrency boom ... without having to buy any bitcoin.

This article originally appeared in the Motley Fool.

Cryptography and blockchain and cryptocurrency, oh my!

Cryptocurrencies are virtual currencies, and there are lots of them -- more than 1,500 as of this writing. In some ways, they are no different than any other form of currency, like the dollar or the euro. People agree they are worth something and they can be exchanged for things of value.

Where cryptocurrencies differ is that they're completely digital and decentralized -- not controlled by a central bank or backed by a government. Instead, the currency exists in a type of public ledger called a blockchain, and that ledger can only be altered if certain conditions are met. Alterations are made using cryptography, the science of encoding data to keep it safe from theft or other manipulation.

Cryptocurrencies and the blockchain technology making them possible have garnered lots of interest and it's not surprising Salesforce is looking to create a product for this market. And Salesforce has had great success starting and quickly growing new business segments over the years, so the thought of Salesforce becoming a major player in blockchain technology and cryptocurrency isn't far-fetched.

What's it to Salesforce?

What remains to be seen is what the product or solution will look like. It could be as simple as integrating a payment processing system for cryptocurrencies into its current Commerce Cloud division. Or it could be a little more cutting edge, like a smart contracts system for crowdfunding or business development.

What's for sure, though, is that it's happening. Benioff said in a recent interview that a random conversation he had at a bar in Davos, Switzerland, after an economic conference early this year got him thinking about how to integrate blockchain technology and cryptocurrency into his company. Never one to shy away from ambition, Salesforce quickly began work on the as-yet mysterious service.

What's it to investors?

When thinking about new investment trends like cryptocurrency, I often think back to an early investing lesson I was taught: the gold miner vs. the pick-and-shovel company. It is said that the most consistent winners in the gold rush days were those selling the equipment to mine the gold, not the miners themselves.

Salesforce could become a pick-and-shovel play on cryptocurrency, much as it has done in other areas of software and technology over the years (like cloud computing and artificial intelligence, to name just two). Rather than entering the trend itself, oftentimes the most consistent way to win is by buying the enabler of the trend.

Details are slim at this point, but the Dreamforce conference is just around the corner. If a Salesforce "solution" for cryptocurrency and blockchain technology is ready for launch by then, investors could be in early on a new way to play the virtual-money rush.

Nicholas Rossolillo and his clients own Nicholas Rossolillo has no position in any cryptocurrencies mentioned. The Motley Fool has no position in any cryptocurrencies mentioned. The Motley Fool owns shares of and recommends CME Group and Nvidia. The Motley Fool recommends Gartner and The Motley Fool has a disclosure policy.


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Business News: Salesforce Is Getting Into Blockchain. Here's Why That Matters
Salesforce Is Getting Into Blockchain. Here's Why That Matters
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