Everything We Know About Facebook’s Acquisition of Blockchain Startup Chainspace

Siamak Masnavi

On Monday (February 4th), Cheddar, a live streaming financial news network founded by Jon Steinberg (a former president of BuzzFeed) in early 2016, reported that social network platform Facebook had "made its first acquisition in the blockchain space." This articles summarizes everything that we have learned so far via Cheddar and other sources about Chainspace, the blockchain startup reportedly acquired by Facebook.

Let's start by taking a closer look at Chainspace. The team's blog post on 18 August 2017 described Chainspace as a "sharded smart contracts platform". You could also describe it as "a distributed ledger platform for high-integrity and transparent processing of transactions within a decentralized system" that "uses smart contracts to offer extensibility." Its sharded architecture "allows for a ledger linearly scalable since only the nodes concerned with the transaction have to process it." Also, "Chainspace is agnostic to the smart contract language, or identity infrastructure, and supports privacy features through modern zero-knowledge techniques."

Chainspace is based on research at UK's prestigious University College London (UCL). On 6 September 2018, one member of the Chainspace team found a humorous non-technical way to express why Chainspace is special:

It’s not just a Blockchain, it’s a bloody good one backed with outstanding thinking on how to address issues like scalability, capacity and speed.

Chainspace was founded by Dave Hrycyszyn, George Danezis (the former head of the Information Security Research Group at UCL), Ramsey Khoury, Alberto Sonnino, Mustafa Al-Bassam, Shehar Bano. In total, Chainspace has 15 employees.

Here is the current state of the Chainspace software:

"We have an alpha system running now in Golang. It does sharding, consensus & executes smart contracts. A global software consultancy is using Chainspace on the EU project Decode, creating civic services for the cities of Barcelona & Amsterdam."

Cheddar's report said that "four of the five researchers behind Chainspace’s academic white paper are joining Facebook’s blockchain group, according to people familiar with the matter," and that "two of the white paper authors, Alberto Sonnino and George Danezis, already list their employment as blockchain researchers in Facebook’s ($FB) London office on LinkedIn."

At press time, there is the following notice at the top of Chainspace's website:

Chainspace Announcement.png

And apparently, "people familiar with the startup told Cheddar it will shut down now that Facebook has hired most of its employees." When Cheddar contacted Facebook, a spokesperson confirmed "that the company had hired employees from Chainspace but declined to comment on specific hires," and added that "Facebook isn’t acquiring any of Chainspace’s technology," and proceeded to refer to an earlier statement about Facebook's blockchain-related efforts:

“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.”

On 21 December 2018, Bloomberg reported that Facebook is creating its own cryptocurrency for money transfers within its highly popular messaging app WhatsApp.

We will update this article as the story develops and further details become available.

All images Courtesy of Chainspace

Blockchain Is Well-Positioned to Help the Unbanked, OKEx Executive Says

Lennix Lai, OKEx’s Financial Markets Director, has recently made two presentations in Davos, where the 50th World Economic Forum (WEF) Annual Meeting is taking place, to spread the word about blockchain technology.

In his two presentations – made at the Russia House 2020 and EmTech Investment Meeting 2020 events – Lai argued that even though there are highly developed countries throughout the world, over 2 billion people are still being excluded from the traditional financial services over the operational costs associated with setting up branches in underdeveloped areas.

Lai noted that “unbankedness” is one of the “biggest hurdles in human wellbeing” and a great opportunity for the blockchain and fintech sector to make a difference in the world by helping those left behind by the traditional financial sector get access to financial services that could boost their living standards. At Russia House 2020, Lai said:

Blockchain and cryptocurrencies appear to be a solution to the problem by providing a digital, decentralized financial system that can work mutually-beneficially with traditional markets to substantially lower the operational costs and serve the areas traditional banking cannot cover.

Lai added that OKEx is committed to “bringing a robust and trustable environment to cater to crypto users.” The cryptocurrency exchange, he added at the EmTech Investment Meeting 2020 talk, sees global regulators a start endorsing the space in the future, and the volatility of BTC dropping.

This would make the flagship cryptocurrency a favorable alternative asset for mainstream finance. He also mentioned the growing decentralized finance space, which “reflects that people are starting to brace a free, open, permission-less financial system.”

The options, futures and spot markets OKEx offers, Lai said, let cryptocurrency users manage the price fluctuations in the space, and 2020 will see the exchange continue its efforts on stablecoins, its OKEx wallet, and derivatives products.

He concluded his presentation at the EmTech Investment Meeting 2020 saying OKEx believes “blockchain can achieve an inclusive sustainable development as well as financial inclusion for all, banked and unbanked.”

Featured image via Unsplash.