Facebook Gets A Piece of Action in Blockchain Development

Facebook reportedly ‘acquires’ Chainspace, a startup working on Blockchain development.

Investing in Talent

Facebook has a history of acquisitions acquiring major firms which include Whatsapp, Instagram, Oculus VR and so on. Since quite some time, it seems to be largely interested in blockchain development which has been apparent from their public statements. However, the idea has finally seen the realms of reality on Monday.

It is interesting to note that the entire cost of this acquisition has been spent on getting the team of Chainspace to Facebook and none of Chainspace’s products and services will be adopted by Facebook. Chainspace put up an announcement on its website stating that the team is “moving on to something new.” This was soon followed by the change in LinkedIn profiles of the team members stating that they are a part of Facebook now.

An announcement made by Facebook’s spokesperson also states that the company has acquired only the talent and not the tech.[1]

Nuances of the Deal

It was being reported that Chainspace was looking to raise funds of about $4 million. Although the exact amount involved in the deal has not been confirmed yet, it is very likely that Facebook might have to shell out a similar amount for acquiring the team.

This move is being hinted at the development of a public blockchain division at Facebook. However, there has been no confirmation from Facebook yet.  Currently, there are around 40 developers working at Facebook on their crypto projects.

The former head of Messenger, David Marcus has been assigned the responsibility of managing their team. It is also interesting to note that in late 2018, Facebook announced five blockchain-related jobs on its ‘Career’ page which included two software engineers, a data scientist and a data engineer at the company’s headquarters.

About Chainspace

Chainspace is a small blockchain startup which has been working on the development of solutions to address the problems of scalability that haunt the development of cryptocurrencies. Four of the five researchers that worked on Chainspace’s academic white paper are reported to be joining Facebook.

The Startup has been founded by researchers from the University College of London and its areas of expertise include sharding on smart contracts to improve scalability issues prevalent in cryptocurrencies.

Sharding can be described as the process of running parallel processing powers of multiple machines in a network to split up the workload of verifying a transaction. Each ‘shard’ is a smaller section derived from the main network which is capable of running a consensus protocol at a smaller scale.

A Symbiotic Relationship

If the past history of acquisitions is to be considered, Chainspace is the first blockchain related startup to be acquired by Facebook. It has also been speculated that Facebook is working towards the development of a cross-border cryptocurrency which can work on its messaging app, Whatsapp. If the predictions turn out to be true, Chainspace may be the first in a series of acquisitions by Facebook to strengthen its blockchain division and create a stronger impact in the tech space.  

[1] https://mashable.com/article/facebook-acquires-blockchain-team-chainspace/#FKI1Z8h_igq6

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