Facebook now has 40 people working in its blockchain, according to a report on Cheddar.
Nearly 40 employees — including several former PayPal execs — work in Facebook’s ($FB) secretive blockchain group, and the company recently appointed a head of business development to oversee acquisitions and deals in the space.
Facebook, as we know from Zuckerberg’s new year message last year, is seriously exploring how blockchain technology and encryption can help it to defend its market position.
Those plans are likely being accelerated as the problems facing the social network mount.
And it is not just the regulators that it fears are coming for them. The leadership team at Facebook is also worrying about the possibility of an upstart decentralised competitor coming along and disrupting their position in the market.
But Facebook has one very big advantage over any future competitor: its size. The network effect that Facebook enjoys means that despite data protection worries, consumers are still on the platform.
Blockchain is an obvious solution for identification verification and management. However, it looks like Facebook is not stopping there. It also has its eyes on providing what for it would be a host of new services. Chief among those would be financial services, as the cheddar story highlights:
“ultimate goal is to help billions of people with access to things they don’t have now,” which “could be things like equitable financial services, new ways to save, or new ways to share information.”
David Marcus heads the facebook division in charge of distributed ledger tech is a former president of PayPal has apparently hired half a dozen or so engineers and executives from PayPal.
So Facebook has the scale, it has an id system, albeit not cryptographically secured as yet – the part it doesn’t have yet is a full-blown payments system.
Facebook’s leadership knows what’s going on in Asia, where countries like China are ahead of the West in mobile payments, with companies such as Alibaba and Tencent in the vanguard.
And it’s not just about on-platform payments. In the US Starbucks is the largest app in the . “proximity payment” business, followed by Apple. Facebook also probably wants to get in on the action.
When Facebook does make its move into crypto it will set in play an arms race for talent as competitors look to match whatever it is theFacebook brings to market.
Talent problem? Buy some crypto start-ups
A small fly in the ointment for Facebook is the battering its brand has been taking this year, and that looks set to get worse. Blockchain engineers might prefer to work elsewhere. Nevertheless Facebook has deep pockets and would no doubt be willing to pay handsomely for the talent it needs.
Another way to get your hands on talent is to buy some companies in the crypto space so they can learn at the coalface.