Facebook ‘acqui-hires’ scalable smart contracts talent from Chainspace
Facebook has hired the team behind Chainspace, a small blockchain startup founded by researchers from University College London, according to new rumors first reported by Cheddar. According to Cheddar’s commentary the “acqui-hire” of Chainspace’s team “is the clearest sign yet of Facebook’s ambition to be a big player in the nascent blockchain industry.”
Chainspace is described as “A Sharded Smart Contracts Platform” in a first research paper published in August 2017 in arXiv. According to the paper, Chainspace supports user defined smart contracts whose correct execution is verifiable by all, achieves scalability by sharding, and is highly secure.
Cheddar notes that four of the five authors of the research paper are joining Facebook’s blockchain group, “according to people familiar with the matter.”
“We’re excited to announce that the team is moving on to something new.”
News (a few) and rumors (many) on Facebook’s growing interest in blockchain technology and the plans of the leading social network to leverage blockchain technology to boost its domination of the internet have been reported for a while now.
In May 2018 David Marcus, VP of Messaging Products at Facebook and former president of PayPal, announced that he was setting up “a small group to explore how to best leverage Blockchain across Facebook, starting from scratch.”
In November 2018 Bloomberg Technology reported that Facebook was developing a cryptocurrency that will allow users transfer money via Facebook’s WhatsApp messaging platform. See our December post “Facebook is on the blockchain train — what can we expect?” for more history, analysis and speculations.
Good or bad news?
MIT Technology Review remarks that Chainspace’s sharding technology can provide high scalability — the ability to process a high number of transactions per second, much higher than the handful of transactions per second processed by the current Bitcoin and Ethereum’s networks (without second layer add-ons such as Lightning Network). This is probably the reason behind Facebook’s move:
“If [Chainspace’s sharing technology] works, it would allow a smart-contract platform to split its data up and assign small pieces of it to subsets of nodes to compute. That would be much quicker than requiring every node to compute every transaction, making the whole system more efficient.
If Facebook is intent on using a blockchain to compete with electronic payment providers like PayPal, it will need to figure out some way to handle large numbers of transactions at a time. Perhaps this acquisition is related to that challenge. We can only speculate.”
Facebook has opened online communications to hundreds of millions of people all over the planet, who wouldn’t be online otherwise. Similarly, Facebook online payments could open fast, cheap, and easy internet payments to hundreds of millions of new users, which would likely boost the whole online payments industry, including cryptocurrencies.
Facebook’s move “is enough to set off a number of chain reactions, including venture capital pouring into potential future acquisitions, and competitors looking for their own targets,” notes Breaker. But, Breaker adds:
“What is much less clear is whether there is anything to celebrate here for those who believe in the ideals of decentralization, mass empowerment, and privacy that originally drove the creation of cryptocurrency. As we wrote last month, Facebook is now unambiguously a force for evil in the world: a rapacious mind-control machine that foments ethnic cleansing, subverts democracy, and is leaving our children brain-addled. Now imagine what they’ll accomplish with their own currency.”
This seems exaggerated. But, without falling into extreme conspiracy theories, it can be argued that Facebook is already too big and powerful, especially when it comes to filtering content and subtly influencing users. No single entity should have that kind of power.
A Facebook payment token would be certainly useful, and I guess it would soon achieve critical mass and play an important role. But F-money wouldn’t be a real cryptocurrency of the people, by the people, for the people, which can’t be controlled by any government or corporation.
Perhaps a “mainstream cryptocurrency” is an oxymoron. It seems likely that F-money could become a mainstream online payment means like PayPal, but this wouldn’t remove the need for real cryptocurrencies, or impact the relatively small number of real cryptocurrency users.
Cover image from Pixabay.