How An Amazon Cryptocurrency Will Change The World
An Amazon cryptocurrency wouldn’t just change the face of the world’s largest online retailer. It would change the world. The era of mass adoption would be upon us within minutes of Jeff Bezos announcing either a proprietary AmazonCoin, or a partnership with an existing platform such as Stellar or Ripple. And it could happen any day. You can test our speculation at the end of this article.
Rumors that Amazon may soon be making a foray into the cryptocurrency market have been circulating since late 2017, sparked by a series of crypto-related domain name registrations made by Amazon’s legal department in October. The company acquired AmazonEthereum.com, AmazonCryptocurrency.com, and AmazonCryptocurrencies.com at that time.
While Amazon has made no announcements regarding the registrations and is tight-lipped regarding any potential blockchain-related movements, speculation is rife within the cryptocurrency community about the potential implications of the move.
What would happen if a dominant market force like Amazon were to enter the cryptocurrency market on a massive scale and begin accepting cryptocurrencies as a payment method? Amazon has a strong reputation for deploying its massive army of developers toward forward-leaning projects, giving credence to the proposition that the massive platform may even launch their own blockchain solution.
What kind of impact would Amazon cryptocurrency acceptance or blockchain integration have on the blockchain ecosystem? On the structure of Amazon’s current holdings? In this article, we’ll speculate on the potential fallout of an Amazon blockchain solution.
A Blockchain-Based Amazon Supply Chain
Most of the discourse surrounding Amazon and the blockchain is focused on the possibility of an Amazon cryptocurrency allowing users to pay for goods and services around the world. While this is an important point, it overlooks one of the most disruptive applications of distributed ledger technology— supply chain optimization.
Amazon operates what is arguably the most innovative supply chain system in the word. There are more than 300 million Amazon accounts worldwide, which allows Amazon to dominate more than 43% of all online sales. Carrying more than 12 million different products and shipping them around the world requires a highly optimized approach to supply chain management.
Amazon is no stranger to innovative solutions when assessing the operation of their supply chain. In 2016 the online retail juggernaut filed a patent for a bizarre science fiction floating “blimp-warehouse” that would use a fleet of drones to deliver products to customers. If Amazon is seriously investigating flying robot warehouses, you can bet they’re genuinely investigating blockchain solutions for supply chain management.
Distributed ledger technology not only allows for the creation of decentralized digital currencies, but also functions as a game-changer for the supply chain industry. The blockchain can be used to create transactions that log each step of the movement of a unit through the supply chain life cycle, dramatically increasing the resolution of order recording, tracking, and fulfilment.
By incorporating a blockchain-based supply chain management system, Amazon would gain the ability to document the journey of a product, significantly improving supply chain efficiency. Overall, a blockchain-based Amazon supply chain would greatly improve Amazon’s already stellar fulfilment practices and lower overheads, thereby providing goods to consumers faster and cheaper.
Retail Market Impact Of An Amazon Cryptocurrency
Given Amazon’s penchant for in-house solutions, it’s highly likely that if the platform were to integrate a cryptocurrency solution it would be a built upon a proprietary, private Amazon blockchain and function as an Amazon-specific cryptocurrency.
Such a currency would likely be interoperable between Amazon’s many services, such as Amazon Prime, Twitch, and Audible. This eventuality is the most probable application of cryptocurrency within the Amazon ecosystem, as the most popular cryptocurrencies on the market today— Bitcoin and Ethereum— are a long way from the 600 transactions per second required by Amazon during peak sales periods.
It’s arguable that an Amazon cryptocurrency is virtually inevitable given the fact that the platform operates across almost all fiat currencies. A standardized Amazon crypto would allow shoppers to purchase goods at a standardized international rate, eliminating the confusion and volatility of fiat currency exchange.
The possibility of an standardized crypto payment could also potentially eliminate the need for region-specific Amazon sites. Amazon has a track record of buying up local domains— in April 2017 the platform dropped over $500,000 USD on Swedish-owned Amazon.se in what market observers interpreted as an indicator of an impending localized Swedish site. Fiat-free crypto-based payment methods could free Amazon from region specific requirements, making Amazon available in new locations internationally.
The thousands of developers working for Amazon would more than likely be able to develop a blockchain-based payment system able solve the scalability problem.
As “customer obsession” is one of Amazon’s core principles, adopting a cryptocurrency as a payment method— proprietary or otherwise—Amazon would be acting in accordance with a massive subset of users petitioning for the change. Retail customers would benefit from lower fees, higher security, and the potential of smart contract facilitated transactions. And of course, suppliers could expect the same benefits on their side, too.
Cryptocurrency Market Implications
The impact of Amazon cryptocurrency adoption on the crypto market is clear. The cryptocurrency market is beginning to bounce back after a slow start to 2018, so the endorsement of a major player such as Amazon could launch it into an explosive bull market and open crypto to a truly global audience.
While it’s unlikely that Amazon will integrate Bitcoin into its payment options in its current state, the upcoming Lightning Network implementation may mean BTC becomes a viable payment method for the high speed, high volume Amazon marketplace.
One of the primary issues with cryptocurrencies such as Bitcoin and Ethereum outside of volatility and transaction speed is compliance. Privately-owned blockchain platform Ripple, however, could be a viable option for Amazon given its close relationships with established financial institutions. Stellar may be an outside bet, because of its relationship with IBM – IBM Cloud and Amazon Web Services are competitors in one of the biggest profit-centers in computing.
There are already a number of solutions that allow cryptocurrency holders to purchase Amazon gift cards with crypto, so it’s possible Amazon may simply allow cryptocurrency transactions to eliminate this middleman solution. Cryptocurrency volatility could be negated through any number of methods that allow Amazon to convert crypto into fiat holdings immediately— if the concept is appealing to the Arizona Department of Revenue, then why not Amazon?
Will We See BTC as an Amazon Payment Method in Future?
The company has not made any official statements regarding the potential integration of Amazon cryptocurrency payment methods. The registration of three separate crypto-related domains made by the Amazon legal department last year, however, is a strong sign that the platform is seriously considering cryptocurrency payments in the near future.
Oh – and that test? Type www.amazoncoin.com into your browser.
The concept may have been around with their Kindle and app payments for a while, but it certainly lays the foundation for a possible future Amazon cryptocurrency…
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