Facebook is most definitely the world’s most popular social network based on the number of users. What started as an app to connect college students now has more than 2.32 billion monthly users. This social media giant has made many acquisitions in the technology space. However, the most astounding ones are those of Instagram and WhatsApp.
Due to the innovative nature of the Facebook developers, they have also gained interest in the crypto space and other emerging technologies. It is already in the public domain that Facebook could be developing its cryptocurrency to enable WhatsApp users to transfer money across the platform. However, the big news is the Facebook’s latest acquisition is in the blockchain space.
According to Cheddar, Facebook has hired the team behind Chainspace. The founders of this small blockchain startup are researchers from the University College London. The startup creates decentralized smart contracts that facilitate payments among other services within the blockchain.
The move by Facebook is a clear sign that the social media giant wants to play a major on the blockchain space. Facebook already set up a blockchain group in early 2018 which is headed by David Marcus who has worked at both PayPal and Facebook in the past.
Chainspace released its whitepaper in August 2017 which outlines the technological and academic aspects behind the project. The white paper describes its primary goal as to ‘build a distributed ledger that transparently allows processing of transactions on a decentralized platform.’
The team was also researching on how to speed up transactions within the blockchain. Some payment options like PayPal and Visa are somehow faster than blockchain when it comes to processing transactions. Bitcoin network, for instance, can process up to 7 transactions per second while Visa can handle up to 24,000. The team was also exploring how to apply blockchain technology beyond payments.
Facebook is already taking 4 of the five writers of the Chainspace’s whitepaper on board according to inside sources. The information on Chainspace’s website is already hinting the acquisition as it says that its founding members are about to ‘explore something new.’
A representative from Facebook confirmed the hiring of some members from Chainspace. According to him, Facebook does not base the acquisition on the products or service Chainspace offers but on the skill or expertise of its members. This type of acquisition is known as an acquihire which is very common in Silicon Valley.
Facebook has been on a hiring spree of experts in the blockchain and cryptocurrency space. Some of the experts it has brought on board in the past include legal experts, academicians and project managers on this space. Facebook has more than 40 people working its blockchain project and seems that it will continue hiring more.
We are yet to know the cost of the acquisition. However, Chainspace was almost in the process of raising initial capital estimated to be about $4 million according to insiders. Chainspace has worked with some partners, and some of its early backers include MW Partners and Lemniscap.