There is some speculation that online behemoth Amazon will create their own cryptocurrency. Will this happen?
Online spending is growing dramatically every year. The increased speed of most internet connections, the proliferation of smartphones, and sheer convenience have turned online shopping into a significant sector of the overall economy. In the United States, online shopping represented 13 percent of all retail sales for 2017, accounting for $453.46 billion alone. Amazon was a big chunk of that total as the internet giant had gross sales of $189.61 billion. Now there’s growing speculation that the company is looking into creating its own cryptocurrency.
Do Websites Augur the Future?
An opinion piece on Townhall discussed the possibility of Amazon launching its own cryptocurrency. The author of the article believed that the company would eventually do so and laid out some reasons as to why.
It was pointed out that Amazon had registered several domain names related to cryptocurrency. The company already owned amazonbitcoin.com but then added amazoncryptocurrency.com, amazoncryptocurrencies.com, and amazonethereum.com back in November 2017.
Such a move could be seen as an eventual move for the company getting involved in cryptocurrency. However, it could also be seen as the company picking up websites so that others would not be able to do so and perhaps use the company’s name for their own benefit. Many firms register website addresses that they never use to protect their brand or intellectual property.
Amazon Big on Tech
The most compelling argument that the Townhall writer makes for Amazon launching its own cryptocurrency is that the company is quite happy to get heavily involved in new technology. Just think of the Echo, Kindle, and Fire devices, not to mention the cloud-based services that the company already provides.
Also, the company did roll out Amazon Coins back in 2013. These coins were designed to be used for purchases on the Fire TV, Fire tablets, and Android devices that used the company’s Appstore. However, the coins cannot be converted into real cash or traded for other coins. They’re not a true virtual currency but more like a virtual gift card.
The fact that Amazon has a vibrant economic ecosystem is another reason for a company-issued cryptocurrency. The internet giant has worked hard to create a global community that’s damn good at getting people to buy things, especially through suggested bundling. As the company already uses coins, it’s not a stretch to imagine them expanding upon that program with their own cryptocurrency. They have a built-in audience of 300 million people, and they could do an airdrop to their Prime customers to get the ball rolling.
Of course, Amazon would probably set up their own exchange to trade their cryptocurrency. This could be a definite move as there’s a lot of money being made by exchanges like Coinbase despite the ups and downs of crypto this year. Thus, Amazon could make money off both ends: people trading the altcoin for other coins or fiat as well as using them to buy products.
The major sticking point to this entire scenario is the legal limbo that cryptocurrency is still in within the United States. Some agencies treat it as one thing while others disagree. Then there’s the fact that each state is tackling the issue of crypto separately, which would be a logistical nightmare for the company.
Overall, Amazon would likely wait for cryptocurrency to be fully legislated at the federal level before creating their own. There are quite a few reasons why they can eventually launch a crypto of their own, but it’s not a given. The entire market cap for virtual currencies is just a shade over $200 billion, which is close to what Amazon grossed last year. The company’s central plan of lasting long enough to crush other retailers is now paying off in spades after two decades of operation.
However, grabbing a piece of the crypto pie could be easy for the company as they have the resources to set up an effective exchange and blockchain. The main determination of such a cryptocurrency would be if it helped them sell more products.
Do you think Amazon will eventually create its own cryptocurrency? Let us know in the comments below.
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