Social media giant Facebook has reportedly acquired a blockchain startup, marking an apparent first for the company.
Sources purportedly told Cheddar that Facebook acquired Chainspace, a small blockchain startup, in an ‘acquihire,’ or an acquisition of a company made primarily for the skills or expertise of its staff, rather than the service or products the company provides.
Per Cheddar, four of the five researchers that worked on Chainspace’s academic whitepaper will be joining Facebook. A Facebook spokesperson told Cheddar that, while the social media giant had hired on the new researchers, it had not acquired any of Chainspace’s technology.
The startup, which was founded by researchers from University College London, was reportedly working on blockchain scalability problems, notably by applying sharding to smart contracts, according to the Chainspace website.
While many blockchain advocates 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 runs on the parallel processing power of multiple networked machines that split up the workload of verifying transactions. It automatically divides networks into smaller sections, or “shards,” each of which runs a smaller-scale consensus protocol.
While processing in parallel, such a network is capable of processing hundreds of transactions per second per shard, which would dramatically increase the scalability of blockchain-based processes.
In late 2018, Facebook listed five new blockchain-related jobs on its careers page: two software engineer roles, a data scientist post and a data engineer, all at the company’s headquarters in Menlo Park, California.
In early May 2018, the head Facebook Messenger, David Marcus, announced that the company had formed a group “to explore how to best leverage blockchain across Facebook, starting from scratch.” Marcus was a former board member of major United States crypto exchange and wallet service Coinbase.