Amazon is the biggest threat to bitcoin right now

 

Over  the past year, a growing number of people have leapt to take part in  bitcoin’s meteoric rise. Teenagers have invested their college funds.  Some families have mortgaged their homes and placed everything on the  table. Even billionaires have suggested putting 10% of all assets into  the digital currency.There  is a lot of money in play and people’s livelihoods and savings are on  the line. As a vehicle of investment, bitcoin itself has an array of  problems. It’s extremely volatile — suffering drops as high as 30% in a  single day, funds are difficult to recover when hacked, and bitcoin’s  technology may be behind other newer cryptocurrencies which offer  greater anonymity, programmability, and scaling.Most  people tend to look at popular altcoins when they think about what  could dethrone the current cryptocurrency king. But could the real  threat come from a more material realm?

Amazon is the largest online retailer in the world

Boasting  over 94 billion USD in sales last year, it handles almost half of all  American online purchases and has operations across the globe. But  despite offering a large variety of payment options, Amazon has yet to  allow people to pay with bitcoin or any other cryptocurrency.As the leader in online retail, it’s in a prime  position to do so. Any cryptocurrency Amazon adopted would surely see a  huge surge of support. Given the current popularity of cryptocurrency,  what exactly is Amazon waiting for?

Barriers

One  of the reasons Amazon may be avoiding cryptocurrency is their limited  transaction speeds. Take a look at the top two major cryptocurrencies.bitcoin: 7 transactions per second
ethereum: 15 transactions per secondAmazon  peaked at 600 transactions per second during last year’s Amazon prime  sale. If even a fraction of their traffic decided to pay with  cryptocurrency, consumers would be stuck waiting hours for transactions  to go through. Not a great customer experience.Do  slow transaction fees mean Amazon will avoid cryptocurrency? The tech  giant is no stranger to innovative scaling solutions. Bitcoin and  ethereum are currently too slow to support Amazon’s demands but other  cryptocurrencies are not. An alternative cryptocurrency called ripple has tested speeds as high as 1500 transactions per second.

Why Amazon Might be Considering Cryptocurrencies

Although  it hasn’t announced an official position on cryptocurrencies, there are  several indicators that suggest Amazon is considering this space and  not necessarily in a bitcoin friendly way.

On October 31st Amazon reportedly bought amazonethereum.com, amazoncryptocurrency.com, and amazoncryptocurrencies.com. This move might be simply covering their bases. Or it might be insight into future endeavours.There  are already services that sell amazon gift cards for bitcoin so in some  respect Amazon offering bitcoin on their site would simply cut out the  middlemanFinally  one of Amazon’s core principles is ‘Customer Obsession’. If customers  demand a cryptocurrency payment method Amazon is sure to eventually give  them what they want.Given  that many of its shoppers buy goods internationally, cryptocurrency  could be an excellent way for shoppers to enjoy a standardized currency  without worrying about exchange rates.

What Could Happen

There are a few ways this could play out that could endanger bitcoin’s current reign:1. Amazon could stay out of the cryptocurrency sectorIn  order to cross the chasm from investment to currency, bitcoin needs to  gain widespread adoption from merchants. It’s unlikely that Amazon will  stay out of this sector indefinitely but if it did bitcoin would  certainly suffer from being excluded by the world’s largest online  retailer. This wouldn’t kill bitcoin, but it would hurt its potential as  a currency.2. Amazon could adopt a competitor to bitcoinThis  seems likely if bitcoin cannot keep up with Amazon’s required  transaction speeds. Ripple is a potential contender with 1000+ TPS. This  scenario could definitely endanger bitcoin’s reign as the top  cryptocurrency. A fictional deal with Visa raised the value of the  Monaco cryptocurrency by almost 700%. Any deal with Amazon will rocket  the partner cryptocurrency upwards. If Amazon chooses to go this route  it probably wouldn’t kill bitcoin, but whatever coin they went with  could knock bitcoin out of its top spot.3. Amazon could create its own cryptocurrencyIf  Amazon Prime video is any indication — Amazon loves to play in high  potential spaces where it can leverage its huge army of developers to  make big plays. Its holdings range from cloud storage, to video  streaming, to hardware offerings. If it sees potential in the  cryptocurrency space it has the technical resources to break into it.It  would not be the first time a large established company has launched  their own token. In September 2017, the chat giant Kik launched an ICO  raising $75 million dollars. Overstock, a publically traded e-commerce  company, has seen its stock raise by 30% since announcing it plans to  ICO this December.If  Amazon created its own cryptocurrency they could spread its use across  their many services: from Amazon Prime, to Twitch, to Audible, allowing  consumers to easily transfer funds within the Amazon ecosystem. They  could outcompete any other cryptocurrency and entice mainstream adoption  by offering a 5% or 10% discount on purchases made with AmazonCoin.  With tens of thousands of developers and high paying salaries it could  find the technical talent to design a coin that outpaces bitcoin when it  comes to scaling and privacy concerns.This is the most dangerous scenario for bitcoin but it relies on Amazon taking a major leap into a field it has so far avoided.

Keep an eye on Amazon as demand for cryptocurrencies rises

For  now Amazon seems to be keeping quiet about its plans in this space. But  whatever cryptocurrency Amazon chooses could become a household name  overnight.Whether  Amazon chooses bitcoin, ethereum, or something else altogether, their  choice will have dramatic consequences on the existing cryptocurrency  landscape. Cryptocurrency and the technology behind it are here to stay,  but bitcoin and its reign as the number one cryptocurrency might not  be.