Facebook Acquires the Blockchain Startup Chainspace for its University College London Team

Social media giant Facebook has conducted its first blockchain acquisition.

In May 2018 Facebook announced that they were launching a dedicated team to explore blockchain technology. The initiative was headed by David Marcus, the vice president of the Facebook Messenger app and former president of PayPal.

Now it looks like Facebook is expanding its blockchain efforts by hiring the team behind Chainspace. Chainspace is a small blockchain software development company whose vision is to make a distributed smart contract platform.

In a white paper from August 2017, Chainspace outlined the goal of the smart contracts project, stating they wanted to build a “distributed ledger platform for high-integrity and transparent processing of transactions within a decentralized system.” One of the primary goals highlighted is to improve the speed of blockchain transactions.

The speed of transactions and scalability has long been a limit for blockchain, leading many people to be concerned about how blockchain would function in the mainstream. Transaction speed is defined as the rate that data is transferred from one account to another. The transaction speed can be limited by factors such as the size of the block, the block time, the amount of traffic on the network and transaction fees. Traditional payment systems like Visa dwarf blockchain when it comes to transaction speeds.

Below are some transaction speeds traditional payment systems vs blockchain. It’s important to note that these figures are what the companies state they are capable of, not a number of transactions they actually deal with on average.

  • Visa: 24,000 tx/s (they claim it can reach 56,000)
  • Ripple network (1,500 tx/s) (Blockchain)
  • Bitcoin netowrk: 7tx/s
  • Ethereum netowrk: tx/s

Facebook hasn’t commented on specific hires from Chainspace; however, two authors of the whitepaper, Alberto Sonnino, and George Danezis, have updated their LinkedIn profile to reflect their new employment.

A Facebook spokesperson stated:

“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.”

Currently, 40 people work within Facebook’s blockchain division and this more signals that they are focused on expanding their blockchain initiatives. Facebook has hired a diverse team made up of researchers, engineers, academics, product managers and legal experts with knowledge in the cryptocurrency space. This may be the first acquisition in the blockchain space for the social media giant, but we could see more in the future as they continue to grow their team from the ground up.

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