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Here is why Amazon registered domain names related to cryptocurrencies. Well at least my take on it.
If you haven't heard the news yet, yes, it's true. Amazon did register these there domain names recently:
amazoncryptocurrencies.com, amazoncryptocurrency.com and amazonethereum.com
There has been rumors lately that Amazon might make an announcement related to bitcoin. Some think Amazon, might start accepting bitcoin on there website. That would be a pretty grand move, catapulting cryptocurrencies to millions of consumers.
However, from the sound of these domain names, I suspect Amazon may have a more cryptic plan. We already know from the Amazon Web Services (AWS) business that Amazon is bold enough to go after other markets outside of just selling products online. From the sound of those domain names, I would not be surprised to see Amazon offering a Coinbase like service but with many more cryptocurrencies than just 3. There has been news recently that Coinbase has been adding about 1 million new accounts per month. They have almost no competition in the US when it comes to buying and selling bitcoin with funds tied to your bank account. As more people start moving funds between crypto and fiat, this is going to be a huge market. Perhaps Amazon wants to start getting a share of that fast growing market.
Beyond just the income Amazon can gain from the transaction fees and price spreads, this business can provide a lot of synergy for Amazons online store. If Amazon sells cryptocurrencies to millions of customers, they will be directly linking the customers bank account with their Amazon account. Now they will be able to offer customers the ability to pay directly from their bank account and avoid credit cards and debit cards. That would translate to huge savings for Amazon on transaction fees. This is without even considering Amazon accepting cryptocurrencies on their web site.
If in addition to the Amazon Cryptocurrencies business Amazon begins accepting cryptocurrencies on their web site, imagine the possibilities. The two businesses would complement one another like yin and yang. Amazon would sell cryptocurrencies to customers and gain from the transaction fees and price spreads. Then when the customer spends the cryptocurrency at the Amazon store they save on transactions fees since the sender pays the transaction fee and there is no cost to the recipient. The difference between this and allowing customers to pay directly from their bank account is that accepting cryptocurrencies creates more demand for the Amazon Cryptocurrencies business. Yes, the customer will eventually pay by moving funds from their bank account, but now amazon will get to collect fees on that move as well.
It would be an awesomely brilliant move if Amazon does this.
Sources:
http://fortune.com/2017/11/02/amazon-cryptocurrency-domain-name-registration/
https://twitter.com/alistairmilne/status/880326496006668288/photo/1
- alistairmilne