Facebook has long been sporting an internal blockchain team that has closely monitored the developing digital blockchain economy. This acquisition marks the social media giant’s first step towards the blockchain market. Chainspace, the company that was acquired is a small blockchain start-up founded by the University of London researchers. The financial technology start-up has long been building a decentralized “smart contracts” system that could facilitate payments and other services through blockchain technology. Led by former PayPal president, David Marcus, Facebook has made their ambitions clear for the nascent blockchain industry.
In a white paper released by Chainspace in 2017, the team wanted to build a “distributed ledger platform for high integrity and transparent processing of transactions within a decentralized system.” This will increase the speed at which transactions happen across the global financial space. The blockchain firm is also chasing ambitious applications of blockchain technology like polling.
Four out of five researchers behind Chainspace’s academic white paper are joining Facebook’s blockchain group, according to people familiar with the matter. A Facebook spokesperson confirmed that the company had hired employees from Chainspace. This is an effort to explore ways in which the power of blockchain can be leveraged by the social media giant. More than 40 people from various start-ups around the world work in Facebook’s blockchain division. The company is continuously scouting for more talent from the field of crypto-currency and blockchain. The social network is also in talks with Algorand, a blockchain based payments platform.
With an increase in ‘bot problems’ within the social media industry, giants such as Twitter and Facebook are actively searching for customer outreach platforms that create increasing marketing return on investment or ROI. Blockchain coupled with smart contracts is a credible and secure way of ensuring individual identities in the virtual social space. Blockchain and cryptocurrency is an exciting combination for increasing the customer base when a decentralized platform becomes mainstream; the ability to earn small amounts of cryptocurrency for online activities will be a boost to the digital economy. Blockchain technology with its smart contracts can reduce the amount of fake content that has been a major problem in today’s digital world.
With such benefits in the future of blockchain and cryptocurrency, it was inevitable that Facebook was going to enter the space. With the possibilities of launching a cryptocurrency in the future this mega hire of Chainspace is definitely a step closer to that dream.