A recent Amazon advert has got the crypto world buzzing. The retailer advertised for a lead position in digital currencies and blockchain. The news excited crypto enthusiasts who couldn’t stop speculating on the move’s meaning. Some went as far as suggesting that Amazon teased its entry into the crypto space.
This development saw the firm scramble for a clarification. It refuted that it was entering the crypto sector. But Its denial did little to quell the growing speculation. If anything, it left more answers than questions. Chief among these questions is what the idea means for Amazon’s crypto interests.
It poses questions about the retailer’s crypto push compared to other FAAMG members. The other members of the quintet are Facebook, Apple, Microsoft, and Google. Could some factors give Amazon the advantage over them in their bid to launch crypto tokens? This article assesses why Amazon could become the first of the FAAMG to launch a crypto token.
How Could Amazon Become the First FAAMG to Issue a Crypto Token?
The growth of crypto payments has sent many industry players back to the drawing board. They’ve had to reconsider placing cryptocurrencies in their operations. The FAAMG quintet hasn’t lagged in this either. That said, in the crypto adoption race, Amazon seems to have the edge over the other four. Here are the top reasons why it could pioneer in launching a crypto token.
It Has a Functioning Digital Asset Already
Amazon isn’t a newbie in the crypto sector. Its interest in the area goes back to 2013. Then, the company launched AmazonCoins, a virtual currency used by its customers. Can use them to buy Kindle-based apps and games.
The token goes for about $0.01 and has wide acceptance within Amazon’s ecosystem. Should the company decide to issue a native token, it already has a prototype to work with. Developing a token is a time-consuming venture. So since Amazon has a functional currency in use, transforming it into a token will be effortless. Unlike the rest, Amazon wouldn’t have to start from scratch.
It’s a Trusted Global Brand
According to a recent Morning Consult study, Amazon is the fifth most trusted brand in the world. Although Google and Microsoft ranked ahead, they’ve faced accusations of data mining. Facebook also continues to face the same allegations.
Amazon may also mine data, but in contrast, it allows users greater freedom in what they’d want to share. One of the cryptos’ selling points is confidentiality. On this score, it’s easy to see why the public would accept Amazon’s token compared to the rest.
Its AWS Platform is a Key Player in the Crypto Space
Another factor playing to Amazon’s advantage is its Amazon Web Service (AWS). AWS is the firm’s computing arm providing BC service known as the managed blockchain. Many global firms have been renting access to the network rather than building their own.
AWS is a perfect fit for launching the Amazon token should the company decide to do so. For one, it’s a proven BC system backed by the trust of thousands of global firms. So, it makes total sense that deploying a crypto token would be an easy thing to do.
Amazon’s Deep Involvement with Ethereum
The firm is already a key player in the crypto universe. Amazon supports a quarter of the global Ethereum (ETH) workload. This is a justifiable fact as ETH is second only to Bitcoin (BTC) in market share. But ETH is more than a currency; it’s a whole financial ecosystem.
Other players in the industry are still developing their BCs. ETH is evolving to include more functionalities. And with it, so has AWS’ significance within the crypto space. When Amazon launches its token, it’ll use AWS’ experience and reputation. It will thus reach the masses.
Amazon is Investing in its Blockchain and Crypto Teams
Amazon’s advert came out as a dead giveaway on its crypto project. Why else would they want to hire for such a position? Again, it follows CoinDesk’s February report on Amazon’s “digital currency” project in Mexico. Furthermore, the firm has in the recent past announced over 70 openings for BC experts. What’s clear is that Amazon is beefing up its BC and crypto teams. It’s doing so to make its presence in the crypto space permanent.
It Holds Patents to Crypto Domains
In 2017, Amazon acquired three crypto-related domains. These are:
It has also indicated an interest in Proof of Work and Merkle Trees cryptosystems. The move gives it a head start over the other four.
Amazon Has an Extensive Network of Loyal Customers
Statista reports by Q1 2021, Prime – its premium membership platform -had 200 million members. The membership renews at $119 annually. Members enjoy certain privileges from the retailer. Besides their loyalty, prime members are early adopters. Thus, they will readily embrace an Amazon token upon launch.
It Has Always Been an Industry Disruptor
Amazon has a reputation for disrupting industries. And AWS has enabled firms to cut third parties from their functions. There’s no reason why it can’t use the platform for its crypto offering.
What Do The Developments at Amazon Mean?
Despite Amazon denying that it’ll be accepting cryptos, their statement speaks otherwise. The emphasis, in their view, is the denial of the timeline. It isn’t their interest in accepting cryptocurrencies. Major tech companies are growing their interest in cryptocurrencies. And there’s no doubt that Amazon will embrace them sooner or later too.
The Drive is Reputational
Here, there are several points worth mentioning. First, it’ll install crypto payments or tokens in its cloud and intellectual products.
Banks provide major online stores with quite favorable terms. So, crypto payments do not solve any of their most pressing problems. Accepting crypto for such e-commerce platforms is more reputational than economic.
Amazon is Creating its Ecosystem
Secondly, Amazon is more interested in accepting payments through its token. That is, they’re creating their ecosystem within the existing platform. The ecosystem is already there, and the token will fit in easily. It’s easy to assume that Amazon’s plans to accept crypto payments extend into BTC and ETH at most. But not the whole list of cryptocurrencies, as City AM had reported.
Are There Downsides To Amazon’s Crypto Entry?
Amazon’s entry into crypto is good, even commendable. But it may not be without its downsides. The firm has come in for criticisms on how it operates.
Firstly, critics speak of its monopolistic tendencies. In the past, it has used patents as an anti-competitive measure. A monopoly with the might that Amazon has would spell disaster for the crypto space.
Secondly, it has previously practiced price discrimination. It apologized and offered refunds for affected customers following the fiasco. There’s no telling if the firm won’t go back to the same discriminatory measures.
When you’re Amazon, the public scrutinizes your every move. It wouldn’t matter even if it’s filling up an opening in one of your departments. Recently the firm announced that it was recruiting a blockchain and crypto lead. The successful candidate would drive the retailer’s vision and strategy in that space. The news sent the crypto world into a frenzy speculating on what the move meant.
So, Amazon denied that it was preparing to accept crypto payments. But the denial did little to quell those speculations. Some crypto enthusiasts contend that Amazon is coy about its crypto interests. They pointed out that it can’t lag as other tech giants embrace the technology.
Further, they posit that it has a headstart over the other members of the FAAMG in the race for crypto adoption. For now, let’s wait and see what Amazon’s next move will be. But, what’s not in doubt is that its adoption of cryptos is a matter of time.