Amazon ‘Will Have to’ Create Its Own Crypto in Future, Binance CEO Says

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One of the cryptocurrency industry’s best-known figures confirmed he still believes online retail giant Amazon cannot avoid issuing its own altcoin, in a tweet Feb. 2.

Discussing the internet business sector more broadly, Changpeng Zhao — CEO of top crypto exchange Binance — said it was not so much a question of if, as of when Amazon will issue its own coin.

The retail giant has made efforts to adopt forms of blockchain technology in the past, but its relationship with cryptocurrency remains tied to rumors.

Such rumors periodically appear in the press, including those that Amazon could integrate Bitcoin (BTC) as a payment method.

“For any internet (non-physical) based business, I don’t understand why anyone would not accept crypto for payments. It is easier, faster and cheaper to integration than traditional payment gateways. Less paperwork. And reaches more diverse demographic and geography,” Zhao meanwhile wrote on Twitter, adding separately:

“Amazon will have to issue a currency sooner or later.”

Zhao made his statement the same week Twitter’s own CEO, Jack Dorsey, repeated his forecast that the internet itself will end up using a default currency, specifically Bitcoin.

Speaking on the Joe Rogan Experience podcast released Feb. 2, Dorsey cautioned that although he could not be sure that Bitcoin would ultimately fulfil this role, the largest cryptocurrency appeared to be the clearest choice.

“It was something that was born on the internet, was developed on the internet, was tested on the internet; it is of the internet,” he said.


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tuur’s response and reasoning for why they wont


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Tuur Demeester ‏ @ TuurDemeester

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1/ I suspect most ICOs with a “blockchain token for payments" are conceptually broken. I’ll use the example of Amazon to explain.

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  1. New conversation * Tuur Demeester ‏ @ TuurDemeester 5 Sep 2017

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2/ First of all, Amazon already has tokens! One is called Amazon Coin and you can buy 10 for $0.98.

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3/ Another is known as Amazon Credit, and you can earn it via its Mechanical Turk program or by selling products as an Amazon vendor.

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4/ Amazon’s tokens are centralized (ledger is on company servers), and pegged to USD. Both measures ensure a smooth customer experience.

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5/ Now imagine if Amazon launched its own free floating decentralized blockchain token, “ABux”.

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6/ First, by choosing blockchain, the ABux payment network becomes very expensive, as every node stores a complete backup of the database.

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7/ The cost of ABux is carried by the users, who are charged transaction fees, and paid out to ABux miners. More friction.

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8/ And then customers also would need to acquire ABux tokens, which means they’re charged exchange fees and are exposed to high volatility.

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9/ Of course, if the ABux price rises, purchasing the token may be an attractive proposition. But think of it from Amazon’s point of view:

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10/ Because ABux floats, it would need to be hedged against - costing $$. Like how airlines have to hedge against oil price volatility.

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11/ Amazon may also need to setup a KYC/AML compliance department, something that is now taken care of by the banks & credit card cos.

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12/ Attack vectors: A criminal could buy $10M worth of ABux, then drive up its value w_ borrowed money. I.e. create his own store discounts.

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13/ AMZN could hold a large ABux defensive reserve - but that sucks for customers bc means the company could also manipulate the currency.

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14/ All this would add to Amazon’s overhead, costs that would in the end be paid by its customers. And at what benefit?

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15/ In sum, I don’t see the use of introducing massive friction by forcing a novel blockchain-based currency on customers: lose-lose prop.

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16/ Amazon accepting Bitcoin on the other hand, could make a lot more sense:

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17/ It opens up markets that already save and transact in BTC, especially digital goods buyers from Iran, India, Argentina, Venezuela…

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18/ Bitcoin’s market might be (and probably will be) liquid enough to sustain instant USD conversions that Amazon needs to stay BTC neutral.

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19/ Bitcoin’s network, development, community, all have been growing since 2009 and would require hardly any extra effort from Amazon.

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20/ In sum, for retailers small and large, accepting Bitcoin could make sense given sufficient adoption, low fee tx, and market liquidity.

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19/ But creating a walled garden with a newly issued, high overhead, free floating blockchain token - it just doesn’t make sense to me.

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20/ This is why I suspect that most ICOs issuing utility tokens for use in an internal payment network need to go back to the drawing board.

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