While it is in a well aware fact now that Facebook is building its war chest for blockchain, from open hiring to acquiring top talent from the street. But last week news of acquisition blockchain start-up Chainspace took a lot of people by surprise as the Social Media Giant was moving much faster than expected with blockchain.
Earlier last year, Facebook decided to block any crypto-related advertisement on its platform after scammers were seen publishing “make money” adverts. Users from countries like the Netherlands were seeing automatic bitcoin trader-related ads, which promised their users to make daily profit.
Is acquisition the way for Facebook?
Since blockchain became prominent and people start recognizing and realizing its advantage, a lot of mainstream tech companies turned towards this newest tech kid on the block. Facebook too took a lead here but it remained officially silent on most part of its plan with respect to the blockchain. Although there have been several reports of the company hiring and recruiting blockchain developers not many had expected Facebook to take an acquisition route.
While the news is still fresh in the minds of people, a tech news website The Information has come out with a report stating that Chainspace is not the only startup Facebook was talking too and its sources say that Facebook may be scouting a few more startups to fuel its blockchain dream,
Going to the article one thing stands out it that Facebook is acquiring these startup as a hiring mechanism or what they call it as “aqui-hire”. The report states that One investor told The Information that Facebook had approached him multiple times about making an acquisition of a company from his portfolio as a way to hire engineering talent. Another person familiar with the matter said Facebook was contemplating deals worth tens of millions of dollars.
According to the sources close to the company also mentioned that Facebook has had active conversations with a few more startups such as
- Algorand, a company founded by an MIT professor that is creating a scalable blockchain (previously reported by Cheddar)
- Basis, a stable coin startup that shut down in December after encountering regulatory issues
- Keybase, an encrypted messaging app that supports Bitcoin and Zcash wallet addresses
While Facebook has always been in denial regarding any of these talks, Chainspace acquisition has just got the rumor mill rolling. As per the article, A few sources reported that Facebook has a conversation with Basis in December shortly after the company reported closure. There were reports of Keybase discussions towards the beginning of 2018
The names that spring up from these rumor mills actually gives insight on what’s going through the mind of decision-makers at Facebook. While Basis conversation could be linked to Facebook’s endeavors of creating a stablecoin in India, its conversation with Keybase could be of its desire to integrate its cryptocurrency into WhatsApp messaging
And with respect Chainspace and Algorand, these could be answers to the company’s concerns about cryptocurrency networks’ ability to accommodate its billions of users, a problem whose answers are available with both these startups.
One thing is clear that out of all these news and rumors is Facebook is progressing with blockchain and the tech giants presence is definitely a positive for the nascent blockchain industry.
What do you think is Facebook’s dream with respect to blockchain? DO let us know your views on the same.
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.