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Ready for deployment? Amazon’s acceptance of Bitcoin may shape the future of payments

Perhaps Amazon isn’t really preparing to accept Bitcoin (BTC) as payment for its goods and services before the end of the year, and maybe Apple is not, in fact, adding $ 2.5 billion of Bitcoin to its balance sheet, although both events were reported recently, they are not yet confirmed. The question remains: if the tech giants commit, What impact will they have on the cryptocurrency and blockchain industry?

Would it spur the adoption of cryptocurrencies or would it revive Bitcoin as a medium of exchange? Would you confirm a seal of approval on digital assets and deter governments from cracking down on blockchain-based tokens?

“It would be a huge validation for cryptocurrencies”, He said Kapil Rathi, co-founder and CEO of CrossTower, an institutional grade cryptocurrency trading platform, when asked to consider the possibility that the rumors were true. “It would be a clear sign that there is significant user demand for crypto for companies of this size to implement or offer it as products.”

The Amazon story originated from a UK newspaper, City AM, that revealed through a “insider” anonymous from Amazon that the e-commerce giant could start accepting Bitcoin before the end of the year. Amazon later denied the news, but Roman Beck, A professor at Copenhagen IT University, told Cointelegraph that it really wouldn’t have a big lasting impact on the industry, even if it were true.

“Amazon could have been a leading force in the tokenization of the e-commerce industry,” said Beck, “capitalizing on its huge installed base of customers on a global scale.” Instead, he squandered his chance: “Amazon wasted precious years in developing digital leadership in the emerging token economy.” The company should have embraced cryptocurrencies two to three years ago, in their opinion.

As for the news on social networks, also unconfirmed, It emerged that Apple was buying $ 2.5 billion worth of Bitcoin for its corporate treasury, its first real foray into the cryptocurrency sector, Beck was equally unimpressed: “Adding some Bitcoin to their balance sheet is something that many companies are already doing as part of their asset diversification strategy. It’s not a big deal anymore either.”

Taylor Monahan, founder and CEO of blockchain interaction interface provider MyCrypto, He seemed to agree with Beck when it comes to Apple. “In December 2020, we saw a wave of companies that had Bitcoin on their balance sheets”, among which was also the electric vehicle manufacturer Tesla. Furthermore, he added in a conversation with Cointelegraph: “Today, it is noteworthy when a company announces that it has it, but it is no longer a game-changer.”

On the other hand, the Amazon news, if it finally materializes, could have more consequences. “Do you really use Bitcoin for goods and services? That is still very much unexplored”, Monahan said.

Pat White, CEO of Bitwave, a provider of digital accounting and tax software, opined that where there is smoke there is fire. The tech giant’s rumors could be true, if not in its exact details, then in its essence. “I believe it”, he told Cointelegraph, referring to the Amazon report. Although the company denied it, it is almost certain that it is investigating in this area, according to him. “To all the major players [minoristas] they would love to have their own currency for their platforms, “said White,” this is exciting news. “

White also doesn’t think Amazon is getting too late in the cryptocurrency space. “Amazon has to be careful”, continuous. As a public company, you will have to explain what you are doing if you make any material changes to your business. You have a pile of problems that you have to solve first. How do you introduce crypto into your accounting system, how do you explain accounting changes to your audit committee, etc.?

Also, you probably don’t just consider Bitcoin. There are many types of cryptocurrencies that you could accept, and you would have to keep track of all of them. I would need all kinds of wallets. In your opinion, “There are real challenges that companies have to overcome, especially since they are a public company.”

Greater acceptance for Bitcoin?

If Amazon were to accept BTC, and it basically worked from a business point of view, this could give “additional respectability” to Bitcoin and perhaps other cryptocurrencies, told Cointelegraph Lawrence White, Professor in the Department of Economics at George Mason University and Senior Scholar at the Cato Institute’s Center for Monetary and Financial Alternatives. It could be said that it is a “more important news” for the sector than PayPal’s entry into the cryptocurrency market in October 2020, which was generally considered an important event.

“It would be a huge business”, coincided Pat white (no relation to Lawrence White). Both Amazon and Apple could be “hugely important”, he said though for different reasons. “Amazon would trigger hearings in Congress”, he continued, raising questions about whether we are really becoming a corporatocracy, that is, a system run by corporations. “Although, it would be incredibly bullish for the market, “he added.

Apple would be important for another reason, Pat White continued. The company has one of the most complex supply chains in the world, so “if Apple simplified its supply chain using digital assets, it would be a great deal. […] It could change what the supply chain means. “

Facebook was the “first driver”

Beck has a different historical vision. The tech giant’s spell “was broken when Facebook announced Libra / Diem,” he told Cointelegraph, adding: “That was the [señal] for Big Tech and other industries to prepare. Amazon is late to the game and it will have a market effect on the demand for Bitcoin, sure, but Facebook has been the first to move. ” As for Apple, and equally importantly Alphabet, the impact is still unclear, he continued, “but it’s fair to say those two are already late for the game.”

Rathi disagrees that Amazon’s timing is necessarily inappropriate. “It would still be relatively early compared to the vast majority of companies,” told Cointelegraph, and would also make Bitcoin more viable as a payment vehicle, adding:

“It would give Bitcoin holders more options to spend their BTC and could thus stimulate its use as a medium of exchange.”

Lawrence White of George Mason University, agreed that Amazon’s acceptance of BTC could make the world’s largest cryptocurrency more viable as a medium of exchange, but only if people actually used it as such. Converting from BTC to dollars and from dollars to BTC is not exactly an easy process these days. “If your income is in dollars and your expenses are in dollars, it seems like a lot of problems, a hassle, so it’s not very popular,” he said.

Overstock, for example, is an e-commerce firm that began accepting payments in BTC in 2014. Its sales in the first three quarters of 2020 were nearly $ 2 billion, according to the New York Times, but only “an average of between $ 30,000 and $ 50,000 a week came from the cryptocurrency, “ Overstock CEO Jonathan Johnson told the newspaper a relative misery. Amazon would have to do much more than that to boost the scale of Bitcoin as a payment mechanism.

The point may be moot anyway, because Amazon may not even accept BTC if and when it enters the crypto space, Bitwave’s Pat White told Cointelegraph. “They probably want to develop their own currency, like a 2.0 gift card”, added. That way, they can eliminate intermediaries, such as Visa, which keeps 3%, etc. Beck agreed that a “Amazon coin”, that would allow efficient coordination and payments between machines was a more likely path for the company.

A less likely restrictive policy?

Looking away, What impact might the entry of tech giants have on governments and regulators? If Amazon or Apple made a strong move in the direction of cryptocurrencies, would that make it less likely that the United States could crack down on Bitcoin or other cryptocurrencies?

“Alan Greenspan once said, supposedly, that regulators cannot ‘lean against the wind’ to cushion economic swings”, Beck replied. In the case of the emerging token economy, “IT is that wind of change. […] Any regulator that maintains fundamental opposition to cryptocurrency tokens is doomed to fail. “

Lawrence White is not so sure that the authorities are really powerless in this regard. The government cannot ban BTC as long as it is peer-to-peer, he told Cointelegraph, but “the government can prohibit it from being above ground,” and that’s probably enough to eliminate it as an effective medium of exchange.

Meanwhile, What can be done about the dramatic market response to the Amazon rumors, a 15% gain in BTC in three hours last Monday? It’s arguably another example of the extreme volatility of cryptocurrencies, and it’s not a good advertisement for a possible medium of exchange. “The crypto market loves to react strongly to potential headlines, as we saw in the spring,” Rathi said, adding:

“The difference this time was that the headline came from a relatively reputable publication, which gave it more weight. I also think that crypto investors have been craving positive news, while prices were falling for months.”

In general, “This type of adoption makes me think of 2013, when a big focal point for Bitcoin was using it for payments,” Monahan said, “but the narrative drifted away from that over time and more towards Bitcoin as a store of value. If we go back to the idea of ​​using Bitcoin for payments and not just as an investment, it could make Bitcoin much more valuable. “

“However, the fact that more and more companies accept it will increase its importance, especially with the added context of El Salvador and the debate on regulation,” Monahan added. “It can transform things for Bitcoin for years to come.”

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Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Tammy@oicanadian.com Phone: +1 513-209-1700

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