The virtual currency market has been in a bear trend for over a year and the prices of the most popular digital assets are currently down around 90% from their all-time high. This situation has affected several projects in the space that had to fire employees and reduce their teams to remain profitable. Although this seems very negative, tech giants are using this opportunity to hire new experts related to blockchain technology.
In a recent report released by CNBC, they explain that companies such as Facebook are starting to hire blockchain and cryptocurrency experts. The social media giant was able to attract employees from Chainspace. During a conversation with CNBC, Facebook informed that they did not buy the company or its technology.
Chainspace is a cryptocurrency company that was founded by PhD researchers from the University College of London, which are now Facebook employees. Chainspace aims at giving people ownership of their personal data through a project called DECODE.
The RBC internet analyst Zachary Schwartzman mentioned in a note to clients that blockchain technology is a threat to Facebook and other major technology companies around the world. Although distributed ledger technology (DLT) is still at an early stage of development, the future growth potential is massive. As Schwartzman explained, the internet could make a shift towards computing on public blockchains which could eventually become a long term risk to Facebook’s business model.
Schwartzman commented about it:
“On the surface, it may appear that Facebook purposefully hired the technical team related toDECODE. But we don’t believe this was the case. Our view is that this was simply an acqui-hire to expand Facebook’s internal crypto team’s expertise.”
There are several companies that are already working with DLT and cryptocurrencies. Some of them are Amazon, IBM, Microsoft and J.P. Morgan. Other firms are also entering the market trying to increase its presence and expertise in the matter.
Back in December 2017, Bitcoin (BTC) reached an all-time high of $20,000. At that time, several new projects and Initial Coin Offerings (ICOs) were launched to the market attracting investors and blockchain experts from all over the world. However, after virtual currencies reached their highest point, they dropped in price, losing more than 90% in some cases.
Clearly, there are thousands of companies that raised funds via an ICO and they still did not launch any product. There are other firms that couldn’t handle the drop in crypto prices and lost all they had.
According to Satya Bajpai, the head of a blockchain and Digital Assets Investment Banking at JMP Securities, in order for companies to raise more capital, they need to show progress on customer adoption and revenue. Most of the firms do not show this data, thus failing to attract investors.
A few months ago, there were some rumors related to Facebook issuing a digital asset for its WhatsApp messaging platform. The intention was to improve and enhance the remittance market in India, where WhatsApp has around 200 million users.
Although there is no official information about it, Facebook seems interested in blockchain technology and digital currencies.