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Report: In a First, Facebook Acquires Blockchain-Based Startup

Facebook has been in the business of acquisition for some time now, from acquiring its hyped competitor in the social media space, Instagram to the online messaging platform, WhatsApp, amongst others. Only a month into 2019 the social media giant, is back in the acquisition business and this time it carried out a blockchain-related acquisition.

According to reports, Facebook acquired a blockchain startup; Chainspace on Feb.4, in apparently it’s first ever blockchain-related acquisition. Apparently sources told Cheddar that Facebook has acquired a rather small blockchain startup in an ‘acquihire’, which means when a company is acquired for the skills or expertise of its staff rather than the services or products the company has to offer.

A Facebook spokesperson revealed in the report that while social media platform had hired new researchers from the acquired startup, it had not acquired any technology from ChainSpace. Reportedly, around four to five of the researchers who worked on Chainspace’s academic whitepaper will be joining Facebook’s team.

The startup was founded by researchers from University College London with an aim to tackle one of the most persistent problems of the blockchain realm, scalability. While communities around the world praise the blockchain technology for its security and trustless capabilities in processing transactions, as revolutionary as it may be, it certainly isn’t as scalable as the traditional payment systems, like PayPal or Visa.

The current number of transactions per second (tps) on the Bitcoin network fluctuates between two and 18, Visa is capable of 2,000 tps, while PayPal can process 115 tps.

Chainspace aimed to change those statistics and was working on blockchain scalability problems by applying sharding to smart contracts, according to the Chainspace website.

Sharding helps because it runs on the parallel power of multiple networked machines that spilt the workload of verifying transactions. It automatically divides networks into smaller sections, ‘shards’, each of which runs a smaller-scale consensus protocol.

Despite this acquisition being the first of its kind from Facebook, the social media platform has sort of been involved with the prospect of blockchain as in the May of 2018, the head Facebook Messenger, David Marcus, announced that the company had formed a group “to explore how to best leverage blockchain across Facebook, starting from scratch.”

For further updates, stay tuned to BlockPublisher.

Abeer Anwaar

Abeer holds a Bachelors degree in Media studies and covers blockchain startups for BlockPublisher. An optimist, excels in the art of the written word and swears by the joy of all things sweet. Contact the editor at editor.startups@blockpublisher.com

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