How Web3 Data Storage Startup Space and Time Scored Microsoft Investment
Space and Time CEO Nate Holiday joins Decrypt's Dan Roberts and Stacy Elliott at Chainlink SmartCon 2022 to talk about Space and Time's data storage business, how it got investment from Microsoft, and why crypto-native businesses are looking for alternatives to big centralized cloud providers.
As mainstream awareness of the various uses of blockchain and cryptographic technologies continues to grow, legacy technology companies like Microsoft are looking for ways to integrate Web3 technology into their platforms while avoiding the wild swings of the cryptocurrency market.
"All this data that Microsoft is providing their customers sits in centralized databases," Space and Time CEO Nate Holiday told Decrypt at Chainlink SmartCon. "Their customers want to start interacting in a decentralized way."
Space and Time is a Web3 data warehouse platform that uses a cryptographic protocol called Proof of SQL. Last month, the firm announced it had raised $20 million in a strategic funding round led by Microsoft's M12 fund, following a previous raise of $10 million led by Framework Ventures.
Microsoft Leads $20M Strategic Round in Web3 Data Warehouse Space and Time
Space and Time, a Web3-native data platform that leverages business logic through a cryptographic protocol called Proof of SQL, announced it has raised $20 million in a strategic funding round led by Microsoft’s M12 fund. Other participants in the round include crypto investment firm Framework Ventures, HashKey, Foresight Ventures, SevenX Ventures, Polygon, Avalanche, Stratos, Hash CIB, and Coin DCX, as well as several Web3 communities and angel investors. Launched as part of Chainlink Labs’ "St...
As Holiday explains, the goal is to provide an easy way to bridge the gap between centralized and decentralized databases and combine on and off-chain data.
"We have the ability with Proof of SQL to not only operate a decentralized data warehouse, but we can actually turn centralized databases into trustless analytics," Holiday says.
As Space and Time CTO Scott Dykstra previously explained to Decrypt, Proof of SQL is a cryptographic protocol that allows the decentralized data warehouse to not only return query results but can also return, in parallel, a SNARK cryptographic proof that the data was untampered.
Succinct Non-Interactive Argument of Knowledge or SNARKS, also known as zero-knowledge (zk-SNARKs) SNARKS, allow crypto users to send transactions on a blockchain in a totally encrypted way—meaning no one can read them—while at the same time signifying the transactions took place in a legitimate manner.
"This allows an external verifier, such as a smart contract or oracle network, to 'double-check' that the data warehouse has not been tampered," Dykstra told Decrypt.
But while Holiday is optimistic about the future of Proof of SQL and its use by corporations, he acknowledges that total decentralization will probably not happen.
"These centralized databases may never be decentralized,” he said. "But the question is, is it good enough for a centralized database to have query results that can be trustless because they run Proof of SQL?"
Holiday believes that Proof of SQL and, by extension, blockchain technology opens databases to a huge array of possibilities. But he expressed concern with how many “decentralized” applications were built on centralized databases.
"When we started looking at creating Space and Time, we talked to dapp developers all over the world, and we were absolutely shocked that they're all building on centralized databases," he said.
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Holiday says the answer may lie in the future: a “multi-blockchain world.” A multi-chain world could connect various centralized applications—like Enterprise Resource Planning (ERP), Customer relationship management (CRM), and marketing automation systems—to a bridge that allows developers to connect those databases to the blockchain.
"It opens a whole world to having cryptographic guarantees of SQL statements, independent of whether they're in a decentralized or centralized data warehouse," he said.
