Finances

Amazon’s Bitcoin Acceptance Can Prime a Payments Future

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Written by Quentin Hack

Amazon has refuted the claim that it has plans on accepting bitcoin payments on its online stores. But the retail giant’s refusal to receive bitcoin payment — having a crypto-amazon marriage — doesn’t change the hope the news brought to many crypto-traders who buy bitcoins, sell, and profit from them.

When big tech companies such as Amazon, Apple, Tesla, and even Facebook announce that they’ll be accepting bitcoin for payment, there is always a frenzy in the cryptocurrency space. If big companies start accepting bitcoin as payments, many cryptocurrency enthusiasts assume the currency’s value will increase, and the adoption will spread.

However, Amazon has denied these claims, saying that although the company loves what is happening in the cryptocurrency space, it isn’t thinking of accepting bitcoin as a means of payment for goods and services on the platform.

WHY DOES AMAZON NOT ACCEPT BITCOIN?

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Amazon denying the rumors about accepting bitcoin payment is not new to cryptocurrency enthusiasts. Many had witnessed how Elon Musk, the CEO of Tesla, went back on his words about Tesla accepting bitcoin as payment for Tesla cars. The rumor around Amazon caused an increase in bitcoin’s price by 14.5%, which shows how thirsty the cryptocurrency space is for good news. Whether it a crypto amazon coming to fruition, or an amazon token being developed, the cryptocurrency space needs news that helps build the confidence of naysayers.

But the denial from top executives at the retail giant about Amazon and Bitcoin collaboration comes from a place of careful research and caution. While crypto Amazon would have been the needed positive news for the cryptocurrency space, the timing, some believe, might not be right.

Many crypto analysts said that if Amazon had started accepting bitcoin as payment, it’d be a massive validation for cryptocurrencies, causing many people to adopt bitcoin. But Amazon couldn’t rush into the market because of a rumor. The myriad complexities bedeviling cryptocurrency payment adoption in a big tech company make it hard for them to jump into the cryptocurrency world. The collaboration between Amazon and Bitcoin will have to wait, for now at least.

Amazon would need to consider, for one, how the new payment style will affect their account. How will the company explain to its investors how it calculates interest and yearly profits? The high volatility of bitcoin also makes pricing hard. How does Amazon incorporate bitcoin prime, for example, into its payment system for Amazon prime’s services? Amazon might place a price on a good, say a shoe, and there is a bearish market in a few days. How does Amazon reconcile the price to fit the changing price of the currency?

These problems and many more are why Amazon needs to be careful and carry out proper research before entering into the cryptocurrency market.

BUT THEY CAN CREATE THEIR TOKEN, SOMETHING LIKE GIFT CARD 2.0

The other suggestion for Amazon, if accepting bitcoin for payment was problematic, was for the company to create its native token, something that works in similar ways as the Amazon Gift card. The native amazon token will be the main currency on the platform.

This suggestion, however brilliant, is laced with loopholes. One of such loopholes is how Amazon will calculate the value of the native coin to be in line with other cryptocurrencies.

WILL AMAZON EVER ACCEPT BITCOIN

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Although Amazon has rejected the rumors, making the Amazon and bitcoin relationship null, there is no assurance that these rumors are without any form of truth. There is no fire without smoke.

So, while Amazon has rejected the rumors, the possibility of creating an Amazon native token, a Gift card 2.0, is not far fetched. The debate on how much effect Amazon is accepting bitcoin payments is rife. On one hand, many believe the entry of such a big tech giant would change the way people view bitcoin, while others think the rumors’ impact won’t change much if true.

One of such people who believe in the latter is Roman Beck, a professor at the IT University of Copenhagen. The professor believes that Amazon’s acceptance of bitcoin payment would have the desired short-term effect, but the result won’t last. Moreover, the professor added, if the tech giants had the foresight, they would have been the leading company in bitcoin payment around the world.

The adoption of bitcoin payment has not been as successful in many companies as one would expect. The volatility in the price, the skepticism surrounding its inherent value, and the government’s refusal to accept bitcoin as a mode of payment has made its adoption as a mode of payment slow.

In 2014, Overstock, an e-commerce website, announced that it would start receiving payments in cryptocurrency. The year after their announcement, its financial records showed that they had over $2billion in sales in the first quarter of the year. But payment via bitcoin was a measly $30,000 to $50,000.

Although companies like Apple and Tesla have added bitcoin to their balance sheets, more can be done with bitcoin and cryptocurrency. The possibilities of Amazon accepting bitcoin payment may be untrue for now, many analysts say, the tech giants, and by extension, other tech giants, can’t overlook the cryptocurrency space for too long. Sooner rather than later, these companies will have no other option than to accept Bitcoin payments on their platform. If they aren’t accepting bitcoin or any of the altcoins, they will create their native tokens, list them on exchange platforms such as Redot.com, and encourage their millions of customers to use these tokens.

HOW WOULD GOVERNMENT REACT TO AMAZON ACCEPTING BITCOIN PAYMENT?

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The size and influence of Amazon will mean government and regulation agencies crackdown on cryptocurrency. If a big company like Amazon starts accepting bitcoin, there will be a growing need to have some regulations on the cryptocurrency, especially on the price. The market fragmentation in the cryptocurrency space will have to be dealt with and dealt with fast. So, using bitcoin on Amazon or any other cryptocurrency will further attract government regulators to the cryptocurrency space.

HOW TO MAKE AMAZON PURCHASE USING BITCOIN

Although still not in the works, the Amazon and Bitcoin relationship does not mean you can’t buy things from Amazon using bitcoin. Yes, there are no ways you can, for example, pay your Amazon Prime subscription fees with bitcoin, but there are third-party platforms that allow you to use bitcoin on Amazon.

Some of these platforms are:

  1. Moon: This is a browser extension that gives you access to buy goods directly from Amazon through a coin base account with bitcoin.
  2. Purse.io: This platform connects people who want to sell their Amazon Gift cards with people who want to buy things with their bitcoin. Purse helps you use bitcoin on Amazon comfortably with no stress.

The future of payment is tilting towards cryptocurrencies, whether Amazon and bitcoin are coming together to form a partnership or Amazon is building their native tokens. There is no denying how influential cryptocurrency will become in the coming years.

About the author

Quentin Hack