Amazon Coin Strikes Again

Amazon Coins

Amazon Coin is inevitable. So is Apple Cash.

Hundreds of billions of dollars have been created in the cryptocurrency markets, literally out of thin air.

That’s why it’s inevitable that a FAANG coin (an Amazon Coin or Apple Cash) will be created by the tech colossi.

Apple CEO Tim Cook recently said that he believes he will be around to see the “elimination of money”. With over 1.2 billion iPhones in circulation worldwide, Apple has an excellent foundation from which to launch a cryptocurrency.

And a survey of 1,000 Amazon users released today by a company called LendEdu indicates that if Amazon launched its own “Amazon Coin” cryptocurrency, 51.7 percent of respondents answered “yes” to the idea of using it.

According to Statista, Amazon has over 90 million Prime members in the U.S. Of those, LendEdu reports that 58.27 percent said they would consider using an Amazon cryptocurrency.

Amazon Coin is Inevitable

The promise of Bitcoin, and other cryptocurrencies, is that they offer a solution to security problems introduced in transactions involving trusted third parties (TTPs).

But it is apparently ridiculously easy and cheap1 to launch a new cryptocurrency…

And if individuals can make billions of dollars by launching questionable ICOs… What would happen when a new cryptocurrency is launched by a massive company with huge structural network effects AND a lot of built in trust?

Both Amazon and Apple have it.

Number of iPhones in circulation

Apple earns about $70,000 every 60 seconds and, of the 1.2 billion iPhones sold, around 800 million are actively in use worldwide.

Do you think Apple, which just launched Apple Pay Cash, a Venmo/PayPal competitor, has not considered adding an “Apple Coin” cryptocurrency to its digital payment system?

Statistic: Net sales revenue of Amazon from 2004 to 2017 (in billion U.S. dollars) | Statista

Amazon Coin Could Save a LOT on Credit Card Processing Fees

Amazon could save a lot of money by requiring users to use Amazon Coin to pay for things, instead of using Visa, Mastercard and American Express.

Instead of having to use a payment processor and pay 1-3% per transaction, Amazon Coin would process transactions for almost nothing.

A savings of 1% on Amazon’s 2017 sales of $177 billion would be $1.7 billion dollars… Which would almost go straight to the bottom line.

I have opined about Amazon using Litecoin as a payment option in the past. Actually, just this week, Charlie Lee estimated that Litecoin could spike in value because of a new payment system, called LitePay, being launched soon…

He says it will allow e-commerce payments to be processed for only 1% fees, compared to the industry average of 1-3%.

Of course, I’m not the only one saying that big incumbent banks should be worried about the threat of evolving, and useful, cryptocurrency products from aggressive companies like Amazon and Apple.

JPMORGAN noted in its most recent 10K:

“Both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation,” says the bank in its annual report. “Increased competition may negatively affect our earnings by creating pressure to lower prices.”

If Amazon did successfully launch its own crypto payment system, it could certainly find ways to put any incremental operating savings to work.

Footnotes

  1. The cost an ICO (initial coin offering) is under $10,000.