Facebook is Secretly Working on Blockchain, Crypto Projects

  • Facebook has hired many former PayPal executives to form part of its Blockchain-focused research group.
  • Facebook's employees have previously pitched the idea of launching the company's own cryptocurrency.

Social media giant Facebook has formed a small blockchain technology research group which reportedly aims to disrupt the world’s traditional payments industry. However, Facebook has experienced problems recruiting qualified personnel due to the rising number of public scandals associated with the multi-billion dollar social networking platform.

Hiring Academics, Software Engineers, Legal Experts 

As CryptoGlobe recently covered, Facebook is actively searching for product managers, academics, software engineers, and legal experts who have some experience working in the digital currency space and/or payments industry. At present, there are about 40 professionals, which include former PayPal employees, that are part of Facebook’s blockchain-focused group.

Facebook’s distributed ledger technology (DLT)-focused research team, formed 8 months ago in May, has reportedly sent staff members to blockchain-related conferences worldwide. The company aims to further expand its current team, which is dedicated to studying potential applications and use cases for DLT, by recruiting more cryptographers, and qualified researchers.

According to sources familiar with the matter, Facebook’s employees have pitched the idea of developing a decentralized cryptocurrency for the social media platform. Facebook’s job descriptions note that the firm’s blockchain team aims to “help billions of people with access to things they don't have now.” This may include things “like equitable financial services, new ways to save, or new ways to share information”, Facebook’s job listing mentions.

Facebook Reluctant To Disclose Details On Its Blockchain Initiatives

When asked to comment about Facebook’s crypto and blockchain-related initiatives, a Facebook representative told Cheddar that not much has changed in terms of the company’s initial business strategy for developing DLT-related products and services. The Facebook spokesperson also referred to a previous statement that the social media network’s management team had issued:

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.

Notably, Facebook’s talented blockchain group includes David Marcus, the former president at PayPal and VP of Messenger at Facebook. Kevin Weil, the former Instagram product chief, and James Everingham, the head of engineering at Instagram, have also joined Facebook’s DLT-focused research group.

Geoff Teehan, who used to work on Facebook’s News Feed, has now been appointed the director of product design for Blockchain at Facebook.

Sources: BitGo Co-Founder Working For Facebook As Advisor

Notably, there are many former PayPal executives that Marcus has recently hired to form part of Facebook’s DLT-focused research team - which suggests that the social media giant might be developing its own cryptocurrency.

Christina Smedley, a former global communications head at PayPal, is now head of branding and marketing for Blockchain at Facebook. Tomer Barel, who was previously in charge of PayPal’s fraud and risk management department, has been appointed as VP of risk and operations for Blockchain at Facebook.

Ben Davenport, the co-founder of BitGo, a cryptoasset wallet and blockchain security firm, is currently an advisor at Facebook’s blockchain group, according to sources familar with the matter.

Notably, non-employees that want to learn more about Facebook’s blockchain-related plans have been asked to sign nondisclosure agreements (NDAs). Sources with knowledge of Facebook’s policies have also revealed that even those who have already been recruited by the company for blockchain-related projects haven’t been informed about all the details related to the firm’s secretive initiative.

Neatly 70 Crypto-Focused Funds Closed This Year as Institutional Investors Tread Carefully

Data from the San Francisco-based Crypto Fund Research has shown that nearly 70 cryptocurrency-focused hedge funds have closed this year, while the number of new funds opening is nearly half of what it was in 2018.

The funds reportedly mostly catered to pensions, family offices, and wealthy individuals. Region-wise, data shows North America leads in the number of crypto fund closures with 28 shutting down this year. Europe followed it with 23 closures, and the Asia-Pacific region came in third with 14 closures.

Bloomberg reports that the volatile nature of cryptocurrency prices and regulatory uncertainty surrounding the nascent space have been keeping institutional investors at bay. Nic Carter, the co-founder of Boston-based crypto market tracker Coin Metrics, was quoted as saying the market is “definitely retail driven and will remain so for the foreseeable future.”

The news outlet noted, however, that a Fidelity survey has shown institutions’’ investments into cryptocurrencies are likely to increase over the next five years, and that the CEO of Galaxi Investments Mike Novogratz has said in a recent interview he believes the next wave of adoption will come from “the wealth advisers, maybe with endowments and small foundations participating.”

Spencer Bogart, general partner at San Francisco-based Blockchain Capital, pointed out it’s a matter of expectations, as while to some the levels of institutional adoption are “disappointing or underwhelming,” to him they are a “radical success.” He said:

To me, the fact that there is any institutional adoption for Bitcoin only 10 years into existence is a radical success and beyond what anyone could have imagined just 3 or 4 years ago.

Data from the Crypto Fund Research’s website shows there are currently a total of 804 cryptocurrency-focused funds, 355 of which are hedge funds, and of are venture capital funds. Most crypto funds – 403 – have less than $10 million worth of assets under management, while only 57 have over $100 million under management.

Featured image via Pixabay.