What Is Facebook Doing With Blockchain Behind The Scene?

What Is Facebook Doing With Blockchain Behind The Scene?

Facebook recently acquired a blockchain startup, but it seems as though they look for more. They talk to other companies. They stated that they might release their blockchain and hire new employees. What are they really trying to accomplish?

What do we know about Facebook’s blockchain adventures so far?

The world famous social media giant Facebook has around two billion users all over the world. They are a technological company and seem to be looking at new technology, such as blockchain and cryptocurrencies. Many rumours circulated about the company. A few months ago, they stated that they looked into creating their own cryptocurrency. There were even rumours that they would acquire Coinbase, which is one of the most popular cryptocurrency exchanges in the world.

It is also important to mention that the man heading Facebook’s blockchain technology efforts is David Marcus, who was previously in charge of the important Messenger division. Notably, Marcus is also one of Coinbase’s board members, which established ties between the two companies.

Facebook has even made its first acquisition in the blockchain space. The social network hired the team behind Chainspace. The acquisition of Chainspace’s team is the clearest sign yet of the network’s ambition to be a big player in the nascent blockchain industry.

What does Facebook have in its blockchain pipeline?

Two of the white paper authors, Alberto Sonnino and George Danezis, already list their employment as blockchain researchers in Facebook’s London office on LinkedIn. However, the social network isn’t acquiring any of Chainspace’s technology, according to the 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.”

The statement does not reveal much about Facebook‘s blockchain-related work, but we can certainly look at what we do know about this specific deal, and what it may tell us about its plans. It’s not known how many Chainspace employees have joined Facebook.

When checking the LinkedIn profiles of Chainspace’s co-founder’s work status, it shows that all but Al-Bassam had updated these to reflect their new roles at Facebook.

However, according to theinformation.com, the social media network has more companies on their shopping list. The publication said Facebook look at several blockchain startups with a view of making acquisitions. Some of these firms include Algorand, Basis and Keybase. For around two months, the social media giant reportedly held discussions with stablecoin startup Basis. With regards to Keybase, Facebook considered acquiring the firm early last year. Again, nothing materialised at the time. Facebook’s talks with Algorand also fell through.

However, Facebook looks for scalability. Specifically, the social network only showed interest in blockchain companies that could accommodate its large number of users. It was with the goal of avoiding a situation that Bitcoin and Ethereum found themselves in after user numbers surged. These blockchain networks encountered slow processing times and high transaction fees after a sporadic rise in user numbers. Of all the reported blockchain firms that Facebook courted, only Chainspace and Algorand fit that bill. So far, Facebook acquired Chainspace. Now we all wonder, what is next?

Image Source: “Flickr”

Leave a Reply

Your email address will not be published. Required fields are marked *