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According to The Information, Facebook's cryptography ambitions are not limited to acquiring the blockchain startup Chainspace.
Facebook has met at least three other cryptographic startups
Citing unnamed sources, the publication indicates that Facebook has considered several blockchain startups to make acquisitions. Algorand, Basis and Keybase are among these companies.
About two months later, the social media giant reportedly had discussions with start-up stablecoin, Basis. It was after Basis reported its closure in mid-December due to regulatory problems. However, nothing has materialized from the discussion.
Facebook's plans to develop a cryptocurrency with usd dollars
It is interesting to note that the discussions held with Basis coincided with Facebook's plans to develop a stable currency based on the US dollar.
Facebook is developing a cryptocurrency for WhatsApp transfers in the midst of another privacy scandal https://t.co/CQC6RYpXvt
– CCN.com (@CryptoCoinsNews) December 21, 2018
At the time, the social media giant would be developing the stablecoin for payments on WhatsApp. Specifically, Facebook was planning to roll out the money transfer service in India, where WhatsApp has more than 200 million users. India is one of the largest recipients of remittances in the world with $ 69 billion sent to the country in 2017.
The basic approach to maintaining Peg might have disabled Facebook
If the acquisition of Basis would have allowed Facebook to get their hands on stable content under development, the social media giant might have hesitated because of regulatory concerns. Notably, Basis – which had already mobilized about $ 133 million – had apparently seen nothing because of the regulation of US markets. Unlike other stable parts such as Tether, Basis was designed to use algorithms to maintain 1: 1 parity to the USD:
"Basis is designed to keep prices stable by adjusting the supply algorithm when demand increases, the blockchain creates more. The expanded offer is designed to bring down the base price. When the demand drops, the blockchain buys Basis. The contract supply is designed to restore the base price. "
Although innovative, this approach may have caused audit and monitoring problems for regulators.
Facebook only plans Crypto "Friend" start-ups that can accommodate its billions of users
With regard to Keybase, Facebook would have considered acquiring the company at the beginning of last year. Once again, nothing materialized at the time. Facebook's talks with Algorand have also failed.
Facebook boasting billions of users, one of the main concern of the social media giant in 'window shopping' was the scalability. Specifically, Facebook is only interested in blockchain networks that can accommodate a large number of users.
This was in order to avoid a situation in which Bitcoin and Ethereum were found after the rise in the number of users. These blockchain networks have experienced slow processing times and high transaction costs after a sporadic increase in the number of users.
Of all the blockchain companies reported that Facebook has courted, only Chainspace and Algorand meet this requirement.
Featured image of Anthony Quintano / Wikimedia Commons
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