Facebook is looking into crypto. Who isn’t?
Updated: Aug 6, 2019
Much excitement was created this week upon the news that Facebook had acquired the team behind fintech startup Chainspace — a smart contracts platform with a similar double-noun name. Chainspace, it seems, was not merely a research company — it was building a public blockchain incorporating sharding, the scaling solution planned to be incorporated into Ethereum in the near future. The company does not have a working product, it was to incorporate peer-reviewed computer science concepts and a tailored proof-of-stake consensus mechanism. What exactly does Facebook want with Chainspace’s brainpower? It’s difficult to be certain, but it is telling that they were specifically interested in a smart contract-equipped blockchain as opposed to simply a payments platform. The Chainspace website has an announcement at the top saying simply: “We’re excited to announce the team is moving on to something new”. It’s interesting that the team decided to move to Facebook and forgo the potential monetary influx of an ICO, which seems to have been the plan originally.
There’s no mystery as to why this excites crypto hopefuls — any huge tech company openly exploring blockchain is taken as a de facto legitimization of the industry as a whole. The bigger mystery is why Facebook doing so would come as any surprise at all. The biggest names in business across sectors are all doing the same — here is a selection of just five and their moves in the space thus far.
Twitter & Square
The news of Facebook’s acquisition came at an opportune time — just last week Twitter and Square CEO Jack Dorsey made waves on Joe Rogan’s podcast when discussing Cash App’s support of Bitcoin. Dorsey said: I believe the internet will have a native currency. I don’t know if it will be Bitcoin but I think it will…it was something that was born on the internet, that was developed on the internet, that was tested on the internet. It is of the internet.” He also tweeted that he loved the idea of tipping with Bitcoin as a future implementation on Twitter. It should go without saying that such exposure to the more than 300 million users of Twitter would have significant impact on the adoption of Bitcoin specifically. Dorsey shot down other cryptos — notably Ethereum and Bitcoin Cash.
Google (Alphabet Inc.)
Consistent reports have emerged to the effect that Google is working on its own distributed ledger technology, acquiring and investing in teams involved in such projects. This is a no-brainer. Google experiments with every new technology — cloud computing, machine learning and AI, advanced GPS, augmented reality and many more. With specific reference to blockchain, the rumors have suggested they were working on two specific projects in 2018, a tamper-proof auditing system and a backend for cloud services. Supposedly the company even approached Ethereum founder Vitalik Buterin in May 2018 seeking help with one of their projects. Over the past year Google Cloud released datasets for eight cryptocurrencies: first Bitcoin and Ethereum, followed this week by Bitcoin Cash, Dash, Dogecoin, Ethereum Classic, Litecoin, and Zcash. When or if Google’s foray into crypto materializes is far from certain, but you can bet your bottom Doge that development and testing in that direction is happening.
Far from just exploring blockchain potentials, Microsoft has already published a blockchain development kit called Azure, which “extends the capabilities of our blockchain developer templates and Azure Blockchain Workbench, which incorporates Azure services for key management, off-chain identity and data, monitoring, and messaging APIs into a reference architecture that can be used to rapidly build blockchain-based applications.” The company is also heavily involved in the crypto warehousing and payment platform Bakkt.
The Industrial and Commercial Bank of China has been working on blockchain solutions to store digital certificates and related data on public blockchains since 2017, and filed its first patent towards that purpose in April 2018. ICBC is considered the largest financial institution and public company in the world, as measured by total assets.
The Arkansas-based giant has been implementing blockchain-based supply chain tools since partnering with IBM and Tsinghua University in October 2016. This was ramped up in the wake of the 2018 E.coli scare affecting romaine lettuce, announcing that blockchain SCM would be rolled out to track every head of cabbage and lettuce from farm to table. Critics have been quick to dispel this as a move to paint Walmart as leaders in the adoption of blockchain, but given that Walmart is the world’s largest company by revenue, it speaks volumes that such a moniker would be so desirable as to be worth years of research and design.
Temper expectations for Bitcoin and altcoins
This is just a small selection of the many large companies toying with blockchain/DLT at present, but in reality it would be easier to identify Fortune 500 companies not exploring crypto and blockchain than doing so. Facebook’s acquisition should not be a major bombshell, and neither should it set expectations for a win by existing cryptocurrencies like Bitcoin or Ethereum. It seems highly unlikely that Bitcoin would seek to further adoption of these, and if it were to launch its own currency one might expect it to be highly centralized and controllable. That has been Facebook’s approach with data, there’s no reason why their approach to money and payments should be any different.
Article by Byron Murphy, Editor at Viewnodes. All opinions are the author’s alone. Viewnodes helps clients establish and maintain masternodes for the currencies which currently support them. To contact us for information on our masternode services, please submit this contact form.