Personal blog of Yzmir Ramirez

As Facebook prepares to launch its new cryptocurrency Libra in 2020, it’s putting the pieces in place to help it run. In one of the latest developments, it has acquired Servicefriend, a startup that built bots — chat clients for messaging apps based on artificial intelligence — to help customer service teams, TechCrunch has confirmed.

The news was first reported in Israel, where Servicefriend is based, after one of its investors, Roberto Singler, alerted local publication The Marker about the deal. We reached out to Ido Arad, one of the co-founders of the company, who referred our questions to a team at Facebook. Facebook then confirmed the acquisition with an Apple-like non-specific statement:

“We acquire smaller tech companies from time to time. We don’t always discuss our plans,” a Facebook spokesperson said.

Several people, including Arad, his co-founder Shahar Ben Ami, and at least one other indicate that they now work at Facebook within the Calibra digital wallet group on their LinkedIn profiles. Their jobs at the social network started this month, meaning this acquisition closed in recent weeks. (Several others indicate that they are still at Servicefriend, meaning they too may have likely made the move as well.)

Although Facebook isn’t specifying what they will be working on, the most obvious area will be in building a bot — or more likely, a network of bots — for the customer service layer for the Calibra digital wallet that Facebook is developing.

Facebook’s plan is to build a range of financial services for people to use Calibra to pay out and receive Libra — for example, to send money to contacts, pay bills, top up their phones, buy things and more.

It remains to be seen just how much people will trust Facebook as a provider of all these. So that is where having “human” and accessible customer service experience will be essential.

“We are here for you,” Calibra notes on its welcome page, where it promises 24-7 support in WhatsApp and Messenger for its users.

Servicefriend has worked on Facebook’s platform in the past: specifically it built “hybrid” bots for Messenger for companies to use to complement teams of humans, to better scale their services on messaging platforms. In one Messenger bot that Servicefriend built for Globe Telecom in the Philippines, it noted that the hybrid bot was able to bring the “agent hours” down to under 20 hours for each 1,000 customer interactions.

Bots have been a relatively problematic area for Facebook. The company launched a personal assistant called M in 2015, and then bots that let users talk to businesses in 2016 on Messenger, with quite some fanfare, although the reality was that nothing really worked as well as promised, and in some cases worked significantly worse than whatever services they aimed to replace.

While AI-based assistants such as Alexa have become synonymous with how a computer can carry on a conversation and provide information to humans, the consensus around bots these days is that the most workable way forward is to build services that complement, rather than completely replace, teams.

For Facebook, getting its customer service on Calibra right can help it build and expand its credibility (note: another area where Servicefriend has build services is in using customer service as a marketing channel). Getting it wrong could mean issues not just with customers, but with partners and possibly regulators.

Visa and Andreessen Horowitz are betting even bigger on cryptocurrency, funding a big round for fellow Facebook Libra Association member Anchorage’s omnimetric blockchain security system. Instead of using passwords that can be stolen, Anchorage requires cryptocurrency withdrawals to be approved by a client’s other employees. Then the company uses both human and AI review of biometrics and more to validate transactions before they’re executed, while offering end-to-end insurance coverage.

This new-age approach to cryptocurrency protection has attracted a $40 million Series B for Anchorage, led by Blockchain Capital and joined by Visa and Andreessen Horowitz. The round adds to Anchorage’s $17 million Series A that Andreessen led just six months ago, demonstrating extraordinary momentum for the security startup.

“As a custodian, our work is focused on building financial plumbing that other companies depend on for their operations to run smoothly. In this regard we have always looked at Visa as a model,” Anchorage co-founder and president Diogo Mónica tells me.

“Visa was ‘fintech’ before the term existed, and has always been on the vanguard of financial infrastructure. Visa’s investment in Anchorage is helpful not only to our company but to our industry, as a validation of the entire ecosystem and a recognition that crypto will play a key role in the future of global finance.”

Cold-storage, where assets are held in computers not connected to the internet, has become a popular method of securing Bitcoin, Ether and other tokens. But the problem is that this can prevent owners from participating in governance of certain cryptocurrency where votes are based on their holdings, or earning dividends. Anchorage tells me it’s purposefully designed to permit this kind of participation, helping clients to get the most out of their assets like capturing returns from staking and inflation, or joining in on-chain governance.

As three of the 28 founding members of the Libra Association that will govern the new Facebook-incubated cryptocurrency, Anchorage, Visa and Andreessen Horowitz will be responsible for ensuring the stablecoin stays secure. While Facebook is building its own custodial wallet called Calibra for users, other Association members and companies hoping to dive into the ecosystem will need ways to protect their Libra stockpiles.

“Libra is exactly the kind of asset that Anchorage was created to hold,” Mónica wrote the day Libra was revealed. “Our custody solution enables online participation with offline assets, so that asset-holders don’t face a trade-off between security and usability.” The company believes that custodians shouldn’t dictate which coins their clients hold, so it’s working to support all types of digital assets. Anchorage tells me that will include support for securing Libra in the future.

You’ve probably already used technology secured by Anchorage’s founders, who engineered Docker’s containers that are used by Microsoft, and Square’s first encrypted card reader. Mónica was at Square when he met his future Anchorage co-founder Nathan McCauley, who’d been working on anti-reverse-engineering tech for the U.S. military. When a company that had lost the password to a $1 million cryptocurrency account asked for their help with security, they recognized the need for a more idiot-proof take on asset protection.

“Anchorage applies the best of modern security engineering for a more advanced approach: we generate and store private keys in secure hardware so they are never exposed at any point in their life cycle, and we eliminate human operations that expose assets to risk,” Mónica says. The startup competes with other crypto custody firms like Bitgo, Ledger, Coinbase and Gemini.

Last time we spoke, Anchorage was cagey about what I could reveal regarding how its transaction validation system worked. With the new funding, it’s feeling a little more secure about its market position and was willing to share more.

Anchorage ditches usernames, passwords, email addresses and phone numbers completely. That way a hacker can’t just dump your coins into their account by stealing your private key or SIM-porting your number to their phone. Instead, clients whitelist devices held by their employees, who use the Anchorage app to submit transactions. You’d propose selling $10 million worth of Bitcoin or transferring it to someone else as payment, and a minimum of two-thirds of your designated co-workers would need to concur to form a quorum that approves the transfer.

But first, Anchorage’s artificial intelligence and human staff would check for any suspicious signals that might indicate a hack in progress. It uses behavioral analysis (do you act like a real human and similar to how you have before), biometric signals (do you look like you) and network signals (is your device what and where it should be) to confirm the transaction is legitimate. The same process goes down if you try to add a new whitelisted device or change who has permission to do what.

The challenge will be scaling security to an ever-broadening range of digital assets, each with their own blockchain quirks and complex smart contracts. Even if Anchorage keeps coins safely in custody, those variables could expose assets to risk while in transit. Now with deeper pockets and the Visa vote of confidence, Anchorage could solve those problems as clients line up.

While most blockchain attention has focused on the cryptocurrencies themselves and the exchanges where you can buy and sell them, a second order of critical infrastructure startups is emerging. Companies like Anchorage could make Bitcoin, Ether, Libra and more not just objects of speculation or the domain of experts, but safely functioning elements of the new world economy.