Facebook has reportedly made its first acquisition in the blockchain industry. Although the news has not yet been confirmed by the social media giant, Facebook has reportedly hired the team behind blockchain startup Chainspace.
The news is being reported online by blockchain industry news website Cheddar, which posted the story on Monday afternoon. Cheddar cited “people familiar with the matter”, claiming that Facebook had hired most of the core team behind Chainspace but none of the company’s technology.
Cheddar also reached out to Facebook for a comment on the acquisition. Facebook responded by stating that the company had hired employees from Chainspace, although Facebook declined to comment on specific hires. Additionally, Facebook confirmed that it was not acquiring any of Chainspace’s technology in the deal.
Instead of a true acquisition, this is more of an “acqui-hire”, where Facebook is acquiring some of the top minds behind the company.
Chainspace is a small blockchain startup founded by researchers from University College London. The company published a whitepaper online in 2017. Since then, the team appears to have been working on creating a faster, secure type of blockchain technology. Now, four of the five researchers listed as authors on that whitepaper have reportedly joined Facebook.
Those researchers are now reportedly working at Facebook’s London office. In fact, two of the four researchers, including Alberto Sonnino and George Danezis, have already updated their LinkedIn profiles to list Facebook as their official employers. Their positions are listed as “Blockchain Researchers”.
Meanwhile, the Chainspace website also seems to have spilled the beans about the acqui-hire by Facebook. Chainspace’s official website mentions that the team is “moving on to something new”.
Chainspace’s August 2017 whitepaper explained that the company’s goal was to build a “distributed ledger platform for high-integrity and transparent processing of transactions within a decentralized system.” In more straightforward terms, Chainspace wanted to build a faster version of blockchain.
It’s unclear where Chainspace’s blockchain project stands now. As mentioned above, it doesn’t seem that Facebook is acquiring Chainspace’s technology in the acqui-hire. Chainspace is reportedly shutting down, even though the company was reportedly in the process of raising an initial round of funding of around $4 million.
Is Facebook Launching Its Own Cryptocurrency?
Last year, it was reported that Facebook was exploring the launch of its own cryptocurrency. We talked about the issue on our own website, theorizing that a Facebook cryptocurrency would instantly become the best-known cryptocurrency in the world – possibly even ahead of bitcoin.
Since then, Facebook has been relatively quiet about its cryptocurrency and blockchain goals – if any.
In late 2018, however, Bloomberg published a piece describing how Facebook was actively building a cryptocurrency stablecoin for use in WhatsApp. Bloomberg cited sources at Facebook, claiming that the social media giant would soon begin to allow users to transfer money through WhatsApp. Facebook would first focus on the remittances market in India.
It seems clear that Facebook is developing some type of blockchain technology or project. The company has been aggressively recruiting academics, product managers, engineers, and legal experts who have experience in cryptocurrencies and blockchain technology. Facebook’s blockchain division reportedly has as many as 40 employees.
And now, Facebook has officially made its first blockchain acquisition by acquiring the team behind Chainspace.
Facebook’s acquisitions may not be done yet: Facebook has also reportedly entered negotiations with Algorand, a blockchain-based payment platform. That platform has raised $66 million to date. Some sources claim that deal has since fallen through, which could be why Facebook acquired Chainspace instead.
Meanwhile, there were rumors in summer 2018 that Facebook was exploring the acquisition of Coinbase – an acquisition that would have easily been the biggest in crypto history.
It’s unclear what Facebook is working on. At the very least, Facebook is developing a blockchain-based payments platform for use in WhatsApp. That news appears to have been confirmed by Bloomberg. That remittance system, however, could be just the tip of the iceberg. Based on Facebook’s actions to date, it seems clear they’re working on some major crypto or blockchain project – and that is certainly exciting news for our favorite industry.