Facebook Acquires Chainspace, the Company’s First Blockchain Acquisition

According to the latest report from Cheddar, social media giant Facebook has acquired a small blockchain startup named Chainspace. this is reportedly the company’s first blockchain-related acquisition.

The source familiar with the matter told Cheddar that the recent move by Facebook is popularly referred as ‘acqui-hire’ in the Silicon Valley, meaning an acquisition where the company primarily acquires skills and expertise of the other company, instead of its product services or technology.

Blockchain startup Chainspace was found by the researchers at the University College London. Sources familiar with the matter told Cheddar that four out of five researchers from Chainspace will be joining Facebook.

An anonymous Facebook spokesperson told Cheddar that the company has currently acquired only Chainspace’s researchers and not its technology. The spokesperson, however, refused to comment anything further in this regard. The spokesperson said: “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.”

Chainspace basically works for solving the scalability solutions for the blockchain networks while implementing solutions like sharding to smart contracts. The goal of the company was to increase the speed of blockchain transactions, and more importantly to increase the capacity to handle transactions of the scale of Visa and Mastercard.

The latest message on the Chainspace website shows that its team behind the startup is “moving on to something new”.

Facebook has been closely monitoring the developments taking place in the blockchain and the cryptocurrency space and beefing up efforts in these sectors. In December 2018, a Bloomberg report stated that Facebook is developing a native cryptocurrency for money transfer between WhatsApp users.

A Facebook spokesperson then said: “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications”.

Similarly, the company is hiring more number of blockchain engineers to its blockchain division. Currently, there are 40 people already working in Facebook’s blockchain division, and its website is showing hiring for 11 more blockchain roles.

Facebook says “Our ultimate goal is to help billions of people with access to things they don’t have now – that could be things like healthcare, equitable financial services, or new ways to save or share information.”

Using highly encrypted blockchain technology for its platform can really prove to be useful for Facebook, especially when it is fighting a battle against controlling fake news.