On Monday (February 4th), the social network platform Facebook "made its first acquisition in the blockchain space and this was revealed in a report by Cheddar.
According to the report, Facebook acquired the small blockchain startup – Chainspace – in an “acquihire,” or acquisition of a firm made basically for the expertise or skills of its employees, instead of the products or service that the firm provides. Four out of the five researchers that worked on the academic whitepaper of Chainspace will be joining Facebook.
The move is part of Facebook’s discrete plans to implement blockchain into its social media platform, including plans to launch a native cryptocurrency. Facebook veteran David Marcus, the former president of PayPal, was appointed last April to lead the initiative.
Closer Look at Chainspace
Founded by the researchers from the University College London, Chainspace is a small blockchain startup developing a decentralized smart contract platform. Its goal is to make the system scalable overcoming the present constraints of the blockchain technology. The company was building a proof of stake protocol leveraging sharding, zero-knowledge proofs, smart contracts programming “in any language,” and a few other cutting-edge features incorporated into its blockchain.
The implementation of these features is critical if a blockchain-based solution wishes to compete with technologies facilitated by high throughput solutions offered by centralized financial institutions like Visa and SWIFT.
Blockchain Scalability Through Sharding
While many blockchain enthusiasts laud the technology for its security and trustless capabilities in processing transactions, it is currently not scalable to the level of traditional payments systems like Visa or PayPal. 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.
Sharding is basically, employing parallel processing power of multiple networked machines that split up the workload of verifying transactions. The shards divide the networks into smaller sections, where each runs a smaller-scale consensus protocol. Such a network is capable of processing hundreds of transactions per second per shard, when processing in parallel. This would dramatically increase the scalability of blockchain-based processes.
Facebook Moves on Blockchain
according to the facebook spokesperson statement in Cheddar’s report, stated that
“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.”
In late 2018, the social media giant added five new blockchain-related jobs on its career page. Some of the blockchain-related jobs listed on the platform include a data scientist post, two software engineer roles, and a data engineer. All of these positions were required at the headquarters of the firm in Menlo Park, California.
Back in May last year, David Marcus – the head of Facebook Messenger, the messaging platform of Facebook – made a very strategic announcement. He announced that the firm had created a group to explore the potentials of blockchain and how best it can be used across Facebook, starting from scratch.