Facebook, the world’s largest social network, has acquired the Chainspace blockchain project, which was founded by researchers from University College London. The secret deal, according to Cheddar, took place at the end of January, and it was initially unclear whether social media only hired the developers or bought the startup. Mark Zuckerberg’s company is not the only social media platform embracing the blockchain tech. Why did Facebook become interested in blockchain development, and why was there demand for decentralized social networks?
Was the Project Acquired?
On February 4, anonymous sources familiar with the matter told Cheddar that Facebook hired four out of five employees of the Chainspace blockchain startup. Since joining the new company, researchers have been engaged in optimizing Facebook’s own blockchain developments, which the leadership of the social network has long been thinking about.
“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,” the corporation’s spokesperson said in a comment for Cheddar.
The press service of the social network confirmed that the university blockchain startup’s employees started their work duties at Facebook. They denied, however, the information about the acquisition of the technology, which had been previously developed by engineers.
It is likely that the new team members who previously worked at University College London, like their colleagues at MIT and Stanford University, addressed the blockchain scalability problem, namely designing a decentralized system for making a large number of payments—on par with Visa—and money transfers in the WhatsApp messenger.
In 2018, Facebook began to acquire blockchain companies to develop its own cryptocurrency, a stablecoin backed by the U.S. dollar, which would allow users to transfer money using the WhatsApp application. Bloomberg wrote about this referring to their own sources. According to them, the new crypto service will be focused primarily on the money transfer market in India, since it is in this country that the largest number of messenger users live.
At the moment, Facebook is shaping the basic concept and choosing a strategy for storing crypto assets, so the project with a stablecoin for WhatsApp is still far from being introduced into the Instant Messenger. The corporation is also actively recruiting scientists, product managers, engineers, and lawyers with experience in cryptocurrency and blockchain technology. At present, more than 40 people are working in the blockchain division, and, probably, the number will grow.
Decentralization of Social Networks
So far, Facebook has been talking about the possibility of making cross-border crypto payments with the WhatsApp messenger, which, since 2014, has been owned by the Mark Zuckerberg corporation. But experts and users around the world are proposing to introduce the blockchain into the very concept of a social network to ensure maximum safety and security of user data.
The need to introduce blockchain arose after a major scandal in March 2018, when the media learned that Facebook had been selling access to confidential information of more than 50 million users for several years. The data leak occurred due to an application with a psychological test that requested access to data from survey participants.
Millions of users around the world were outraged and offered to implement the blockchain as a guarantor of the integrity of information within one company. “At its least, blockchain technology would enable corporations to add a level of unmodifiable transparency to data tracking. At its best, it would give entities power over who accesses their sensitive information,” as Jemma Green, a Forbes contributor, wrote.
Thanks to the introduction of blockchain, social networks will become decentralized. While Facebook is making timid attempts to interact with digital money transfers, many blockchain-powered social networks, portals, and websites are being built and trialing the tech.
The Main Trend Is Incentivized Social Networks
The most famous decentralized platform, Steemit, describes itself as the first social network based on the Steem blockchain, a platform through which you can reward publishers, monetize content, and expand the community. “While most social media sites extract this value for the benefit of their shareholders, Steemit believes that the users of the platform should receive the benefits and rewards for their attention and the contributions they make to the platform,” as the company’s website says. As part of the Steem operation, each user will be assigned tokens that can be traded on the market. According to the project’s concept, people will buy or sell these tokens, or just keep them waiting for an increase of various services available on the platform. “I feel like I’m in the Stone Age when I’m on Facebook or Twitter. They have no value without what you’re contributing to them,” said one of Steem’s users, David Kadavy.
Another startup, Sapien, which is a democratized news network, wants to create a new kind of information platform using Ethereum. Thanks to the blockchain, all user data will be protected, and the cryptocurrency will allow one to freely reward the project curators and the creators of individual blogs on the portal for their activities. As Sapien founder Sam Mathews says, modern news sites are outdated and dangerous for users. Sapien, on the other hand, will rewrite the experience of social networks to “protect the user and the truth using the powerful features of the blockchain, with maximum transparency.”
Another blockchain project, Sola, is a hybrid of media and social network managed by artificial intelligence together with users. The platform, according to the website, has more than 700,000 users worldwide. “Sola doesn’t use the concept of following. It spreads information like a viral disease to the most interested users, applying AI algorithms combined with users reactions. Quality content can easily reach the whole Sola user base. Users post news, stories, and entertainment cards, Sola takes care of the rest,” said the project’s representatives on their website. The platform uses the Sola internal currency, which has no cash value until someone approves or comments on the content. After receiving feedback from users, reviews are converted into SOL tokens. “This is a utility token with a monetary function that supports the Sola economy,” explained Ilya Zudin, the co-founder and CEO of the project. “This allows us to share advertising, user payments, and partnerships with users, providing a strong financial incentive to use our service and create high-quality content.”
The diaspora project currently has over a million users and is one of the most popular decentralized social platforms. According to the concept, diaspora resembles the Tumblr network, where users can share photos, videos, audio recordings, and texts with the community and actively use hashtags that people find one another by. “Instead of everyone’s data being held on huge central servers owned by a large organization, diaspora exists on independently run servers (‘ods’) all over the world. You choose which pod to register with, and you can then connect seamlessly with the diaspora community worldwide,” as the project website says. Besides, the project does not claim confidential data: “In diaspora, you own your data. You don’t sign over rights to a corporation or other interest who could use it. In addition, you choose who sees what you share, using Aspects. With diaspora, your friends, your habits, and your content is your business… not ours! In addition, you choose who sees your notes using Aspects,” as is explained in the project description.
In general, decentralized projects are gaining popularity due to their openness and earning opportunities with the help of internal tokens. This is forming a new user attitude toward Internet websites that are recognized as vulnerable and completely insecure for members of the community.