Popular social platform Facebook has reportedly made its first acquisition in the blockchain space. The social network reportedly quietly hired the team behind Blockchain startup, Chainspace. Chainspace is a blockchain startup that was set up by researchers from the University College of London. The startup was working on building a decentralized “smart contracts” system that would have the ability to facilitate payments as well as other services via Blockchain technology.
The acquisition of Chainspace’s team, is a move that has been dubbed “acqui-hire” in Silicon Valley, and is a great indicator that Facebook plans to be a big player in the Blockchain industry; which is still in its infancy stage. Veteran Facebook executive and former PayPal President David Marcus, was picked to lead Facebook’s blockchain group earlier last year.
A Chainspace August 2017 whitepaper revealed the technological and academic details behind the project. According to the whitepaper, the team wanted to build a “distributed ledger platform for integrity and transparent processing of transactions within a decentralized system.”
This means that chain space had in its agenda a goal to boost the transaction speeds through Blockchain technology. Chainspace researchers were also exploring how the Blockchain and decentralization could be applied to areas outside payments, like say, elections.
Sources say that 4 of the 5 Chainspace researchers are set to join Facebook. The 4 will become valuable additions to Facebook’s blockchain group. Two of the researchers who co-authored Chainspace’s white paper, Alberto Sonnino and George Danezis have already documented their employment as Facebook’s researchers at the ($FB) London office on LinkedIn.
The Chainspace website was recently updated with a message that said that the team behind the startup was “moving on to something new”. People close to the startup told crypto publication Cheddar, that the startup would be shutting down, owing to the fact that Facebook has hired most of its employees.
A Facebook spokesman speaking to Cheddar held that the company had indeed hired employees from Facebook but declined to name specific hires. Facebook was not about to acquire any of Chainspace’s technology according to the spokesperson, while referring to an earlier statement made about Facebook’s blockchain efforts.
The spokesperson further said; “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.”
Facebook has been recruiting professionals and experts with experience in the crypto-currency field, with the company reportedly exploring the creation of its crypto-currency which might take the form of a stablecoin, or a crypto-currency backed by fiat currency. Facebook already has more than 40 people working in the blockchain division and is reportedly interested in expanding this team.
It is not clear how much Facebook would be willing to fork out for an acquisition if it comes to that since it is understood that Chainspace was in the process of raising an initial round of funding of about $4 million. If the acquisition is confirmed, it could mark a start to what might end up being a series of acquisitions after Facebook reportedly held talks with another Blockchain startup known as Algorand.
Facebook’s forays into the crypto-currency world are a sharp contrast to their stance about the crypto space early last year. Early and mid-last year saw the social media giant ban crypto ads on their platform before later lifting the ban.
Facebook’s forays into the crypto-sphere should really clear all doubts in my opinion about the potential of the industry.
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