Meet the UCL-based startup that’s powering Facebook’s cryptocurrency
University College London (UCL) is no stranger to being a part of some society-shaping collaborations, after all, the university works in partnership with so many influential entities, including international agencies, NGOs, political ministries, educational institutions, and enterprise. But it is a little known startup that UCL birthed which has become big global news in recent weeks.
Chainspace, a decentralised application platform, has been acquired by one of the most influential companies in the world – Facebook.
The team behind the blockchain venture boasts several academics from the UCL Information Security Research Group, including George Danezis, one of the UK’s leading privacy engineering researchers.
The team was snapped up by the tech giant to be the driving force behind Facebook’s latest ambitious venture. As with most things, Facebook is aiming high with the unveiling of its new plan to launch a cryptocurrency that will become a global currency.
Mark Zuckerberg’s company released a white paper outlining the technical details of Libra in June – with a full launch expected next year.
The new digital token will be built on blockchain and can be used to send funds instantly through Facebook and its subsidiaries, WhatsApp and Messenger. Users will also be able to make online purchases with retail websites such as eBay and Booking.com with fees being lower than those offered by standard banks and credit card services.
After a bad year for Facebook in terms of privacy, it’s no wonder the company is taking things seriously with their latest offering. And that’s where some of Chainspace’s technology comes into play.
The tech behind one of the startup’s programme’s, Coconut, could greatly enhance blockchain users’ privacy.
They have also developed system that can overcome one of cryptocurrencies biggest hurdles – the speed of transactions. While common payment networks like Visa carry out about 24,000 transactions per second, the nature of cryptocurrencies means current transactions are only reaching about seven to 14.
The appeal of cryptocurrencies is that the transactions are decentralised, unlike Visa and Mastercard, say. They are carried out over blockchain, the digital pipelines on which many independent computers carry out the exchange of assets rather than one central bank, and this makes the system less vulnerable to hacks or shutdowns.
The idea is great, but this type of transaction takes time and is simply not fast enough if you want to become the leading name in cryptocurrency.
Chainspace was on its way to overcome those problems by leveraging “sharding” – a technique that can achieve scale by running a web of interconnected blockchains. This paired with a transaction verification system called Blockmania, means the company could theoretically handle up to 400,000 transactions per second.
“The real potential that we saw in ChainSpace was one of the first serious implementations of state sharding across a trustless network,” Lior Messika, an early investor in Chainspace with his VC company Eden Block, told Wired.
“We were impressed by a pioneering approach and solid plans for implementation.”