Today we have some pretty exciting updates to give you regarding Facebook and blockchain technology. Facebook, the social media network giant, has reportedly acquired Chainspace, a small blockchain startup founded initially by researchers from the University of College London.
The startup was building decentralized smart contracts systems that could undergo payment and other services by using their blockchain network. It’s big news for the social media networking giant, as it’s the first blockchain-related acquisition for Facebook.
According to Cheddar, Facebook has been in the blockchain and crypto space for over a year now.
Recode reported last year in May 2018, that Facebook has assembled a blockchain team with David Marcus, the previous head of Facebook Messenger, jumping over to take charge and lead of the new blockchain team.
Instagram’s VP of Engineering James Everingham and VP of Product Kevin Weil are also apart of the new blockchain unit. The addition of the new blockchain team led to Facebook undergoing a major internal reorganization within the company, with many old faces in new roles.
While the blockchain team is relatively new, over 40 people are working in Facebook’s blockchain division. So it’s not as if Facebook hasn’t dabbled in blockchain space before, it’s just that Facebook has never acquired a blockchain-related startup.
In this circumstance, Facebook is acquiring the Chainspace team, but not Chainspace’s technology according to a spokesperson. “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
It’s unclear how much Facebook paid to acquire Chainspace. Chainspace was, however, in the process of raising $4 million. Lemniscap and MW Partners were early backers of Chainspace.
So Facebook’s decision to acqui-hire (so acquire and then hire the employees within Chainspace), very much falls in life with Silicon Valley’s culture of growing quick and fast. Instead of hiring many talented individuals, many companies in Silicon Valley would purchase the startup, to gain access to a large number of talented individuals, which helps the larger company grow significantly quickly. While, according to people familiar with the matter, only four of the five researchers will be joining the Facebook Group, it’s a strong sign to show that Facebook is keen to be a big player in the blockchain industry.
In fact, Alberto Sonnino and George Danezis, two of the authors of the CHainspace whitepaper, have already listed their employment status as a blockchain researcher at Facebook’s London Office on their personal Linkedin Page.
So what does all of this mean for Facebook?
According to Chainspace’s August 2017 Whitepaper, the organization noted that their goal was to build a distributed ledger platform with high-integrity and transparent processing of transactions within a decentralized system. The startup’s goal was to, therefore, increase the speed of transactions.
While blockchain technology has a lot of potential, the transaction speed is currently very slow and much slower than traditional financial institutions like Visa or Mastercard. The organization was also exploring different ways blockchain technology could be implemented in everyday life, such as in polling.
If we think about it, these researchers are looking into many ways we can use blockchain technology and how it can be implemented well in today’s society. There’s not much use of blockchain if it’s just too slow. I believe this is a brilliant move by Mark Zuckerberg, as there are still so many untapped ideas surrounding blockchain technology that we may not know of but, with further research and development, we can discover and find out. Mark Zuckerberg knows that blockchain technology is a big gold mine, but he doesn’t know exactly what it can bring for the future. Hence why the acquihire.
I believe Facebook will be aggressively hiring and acquihiring more blockchain companies. Cheddar noted that the company also spoke to Algorand, a blockchain-based payments platform that raised $66 million in total. The talks, however, fell through, but that doesn’t mean Facebook is going to stop there. Facebook is a company I’d be keeping my eye on when it comes to the blockchain sector.
So what are your thoughts on this situation guys?
Do you think Facebook is going to come out on top in the blockchain space?
Or do you think blockchain technology could one day topple the social media giant?
Let me know what you guys think in the comments below.
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Disclaimer: Cryptopig content is written by a team of blockchain passionate people. We are not registered as investment advisors. Don’t take the information in this post as investment advice and make sure you do your own research before investing. Cryptocurrencies are a very risky investment, never invest more money than you can afford to lose.