Why The Crypto World Needs To Build An Amazon Of Its Own
Amazon and eBay don’t appear to be in a hurry to start accepting crypto. Does the digital assets sector need to create a platform of its own? Why The Crypto World Needs To Build An Amazon Of Its Own
When Satoshi Nakamoto released the whitepaper for Bitcoin, his vision was simple: Creating a form of electronic cash that enables payments to be sent without a bank’s involvement.
Few could have anticipated how popular the cryptocurrency would end up being — let alone its impressive market cap of $635 billion. But Bitcoin’s success has largely hinged upon how this digital asset is often bought and kept for speculation. According to a recent Binance survey, just 11% of those who own crypto use it to make payments.
Amazon and eBay have shown little interest in rolling out support for digital assets, a move that would enable millions of users to spend their crypto freely. One long-standing irony lies in how you can buy pro-Bitcoin shirts on both of these platforms… but only in cash.
Waiting around for these e-commerce titans to embrace crypto might not be the best approach to take, either. Bitcoin has been around for more than a decade, Ether first launched in 2015, and thousands of altcoins have followed in their footsteps. Smaller independent retailers have started allowing major coins to be used for retail therapy, but many of these merchants are based in niche sectors and have a limited range of products.
As a result, consensus is growing that the crypto sector should build its own answer to Amazon and eBay. The advantages extend beyond ensuring that digital assets can finally be used for their intended purpose.
Taking this initiative will prevent capital from flowing to tech titans who already generate billions of dollars in profit a quarter. Better still, it can also lead to a more equitable ecosystem — one where small businesses who sell their wares pay lower fees and protect their razor-thin profit margins.
Financial Freedom? Don’t Bank On That
For the e-commerce startups that are building crypto-focused platforms, this isn’t just about making it easy to buy a pair of sneakers using Bitcoin. It’s about delivering true financial inclusion for all — and delivering blockchain technology to millions of people.
At present, if you want to buy something on Amazon or eBay, you’ll need to have a debit card — and for this, you’ll need a bank account. That’s little comfort for the hundreds of millions of people who don’t have access to these financial services. Getting a credit card presents even more hurdles to jump through, as you’ll need to prove that you have a stable income and fit a bank’s strict lending criteria. And although prepaid cards that can be topped up with cash are available, they’re often subject to sky-high transaction fees.
All of this has contributed to a world where making purchases is near impossible to do without a bank’s involvement somewhere down the line. And although cryptocurrencies can be converted into fiat to make e-commerce purchases, this process can end up being fiddly and time consuming.
DeFi For You is positioning itself as the crypto industry’s answer to Amazon and eBay. The platform aims to support small and medium-sized businesses by enabling them to sell their products in exchange for digital assets.
As well as democratizing the retail world, the company has bold ambitions to shake up the world of lending by allowing anyone to set up their own pawn shops and issue short-term loans secured by smart contracts. The use of blockchain technology enables someone to prove they are trustworthy over time and access preferential lending terms — without having to fit a bank’s narrow criteria.
Through DeFi For You, users become their own bank — and have an opportunity to start their own business.
In a recent AMA session with Cointelegraph, DeFi For You CEO Adam C. Chaplin said he was inspired by a documentary about a pawn shop in Marbella which specialized in allowing rich people to use their luxury items as collateral — servicing high net worth individuals who may encounter cashflow problems from time to time.
“We’re helping the unbanked, we’re helping the high end of the market, we can open this up to literally millions of people — and microloans are big too,” Chaplin said.
There is one hurdle that may have been holding Amazon and eBay back from accepting crypto: Concerns over scalability. The Ethereum blockchain has become exceedingly popular among DeFi protocols over the past 12 months, but all of this congestion has caused the network to creak under the pressure. DeFi For You has reacted to this by opting to use the Binance Smart Chain, which boasts quicker speeds and lower costs thanks to a block time of between three and five seconds.
DeFi For You is holding a 24-hour initial DeFi offering on the Binance Smart Chain, which begins at 10pm UTC on 31. Jan.
Amazon Can Make Just About Anything—Except A Good Video Game
The company produces successful movies, TV shows, e-readers and speakers, but gaming has proven difficult to crack.
Mike Frazzini had never made a video game when he helped start Amazon Game Studios. Eight years later, he has released two duds, withdrew both from stores after a torrent of negative reactions and canceled many more. For a company that dominates countless areas of retail, consumer electronics and enterprise computing, the multiple failures in gaming show one realm that may be impervious to Amazon.com Inc.’s distinctive business philosophy. It tried to make games the Amazon way, instead of simply making games people would want to play.
Frazzini is an Amazon lifer who came up in the books section of the website, where he endeared himself to Jeff Bezos as a manager there. Conventional wisdom inside the company is that if you can run one business, you can run any other. Amazon’s deep financial resources certainly help.
As head of the games division, Frazzini has acquired established development studios and pushed the company to spend nearly $1 billion for the live video streaming website Twitch. Frazzini recruited some of the top names in the video game industry, including creators of the critically acclaimed franchises EverQuest and Portal, as well as executives from Electronic Arts Inc. and other big publishers.
Then, according to numerous current and former employees of Frazzini’s game studios, he ignored much of their advice. He frequently told staff that every Amazon game needed to be a “billion-dollar franchise” and then understaffed the projects, they say. Instead of using industry-standard development tools, Frazzini insisted Amazon build its own, which might have saved the company money if the software ever worked properly.
Executives under Frazzini initially rejected charges that New World, an Amazon game that would ask players to colonize a mythical land and murder inhabitants who bear a striking resemblance to Native Americans, was racist. They relented after Amazon hired a tribal consultant who found that the portrayal was indeed offensive, say two people who worked on the project.
The game, previously planned for release last year, is now scheduled for this spring.
This story is based on interviews with more than 30 current and former Amazon employees, most of whom spoke under the condition of anonymity citing fears of litigation or career repercussions. A spokeswoman for Amazon declined to comment or make Frazzini available for an interview.
Amazon is spending nearly $500 million a year operating the video game division, two people familiar with the budget say. That amount doesn’t include Twitch or a new project under different management, which is building a service to stream games to a computer, phone or Amazon Fire TV.
To develop games, Amazon tried to bend a creative and collaborative process to its will, and the results offer lessons to Apple Inc., Facebook Inc. and Google, whose efforts so far have been similarly ineffective. Successful video games are a combination of art, entertainment, technology and very large budgets. Big tech companies only really figured out the last two.
Many of the game developers who joined Amazon found themselves repelled by the corporate culture. The company is driven by data, and employees are expected to write six-page documents to get major decisions approved. In game development, on the other hand, a phrase often uttered around the office is “finding the fun.”
It refers to altering and polishing small aspects of a game to figure out what makes the experience enjoyable. The results are measured only in emotion, which is why many developers say it’s critical for the people in charge to have experience making games.
At Amazon’s core is a set of 14 leadership principles. They include “customer obsession” and “frugality.” For a company man like Frazzini, they offer a scale by which every member of the team is measured. “If you don’t come in line with that approach, you’ll struggle at Amazon,” says Jason Child, who spent more than a decade in Amazon’s finance department.
Adapting to the corporate culture counts for much more than expertise, he says. “If someone is a guru in video games and they go to Amazon, would they be successful? Probably not.”
Jeff Bezos is more of a book guy, but the directive to go into video games came straight from the top. The Amazon chief executive officer indicated he was willing to spend exorbitant sums of money and offer development teams as long as they needed, say three people who worked directly with Bezos.
All that mattered was that they make the most ambitious games possible, ones that would draw gamers into the Amazon Prime ecosystem and showcase the technical capabilities of its cloud division. Allowing 10,000 people to play in a single game session was given to the new team as a lofty target. Two projects under this directive became known around the office as the “Bezos games.”
Bezos views games as yet another way to sell subscriptions to Prime and hook customers on its other offerings, including television shows and movies. As other e-commerce companies catch up with speedy free shipping, Amazon has sought to add more perks to Prime to justify the price of membership. Frazzini helped kick off the games initiative in 2012 and soon became boss. He had risen from the books department to run the section of Amazon’s store that sells video games shipped by mail.
At first, the new group planned to make games for the Amazon Appstore and release them on Android phones, including the ill-fated Amazon Fire Phone, as well as the Fire TV. By 2014, the company decided to move into games for PCs and eventually consoles. It was a dramatic change. Mobile games can be made by small teams in just a few months, whereas bigger ones take hundreds of people toiling away for years.
Frazzini set up a new game development operation at Amazon’s headquarters in Seattle. They would later call it Relentless Studios, using one of Bezos’s favorite adjectives for the company. To help run it, Frazzini tapped Louis Castle, who founded the influential game company behind the Command & Conquer series.
Amazon hired celebrated developers like Kim Swift, designer of the puzzle game Portal, and Clint Hocking, director of the shooter Far Cry 2. It also formed two more studios in California. The splashy hires kept coming, including Madden guru Richard Hilleman and online gaming pioneer John Smedley. Today, only Smedley remains. All declined to comment.
At first, new recruits thought they were entering some sort of fantasy land. Many were paid double the market rate of other game makers in the area, on top of lucrative packages of Amazon stock that just kept rising in value. Teams had deadlines, but they proved to be flexible, and overtime requests were infrequent, more than a dozen former employees say.
One aspect of working at Amazon felt similar to traditional game companies. The studios cultivated a “bro culture” in which women often weren’t given the same opportunities as men, former employees say. Four female game developers say their worst experiences of sexism in the industry were at Amazon.
They shared stories of being ignored and undermined by male executives and say they were eventually driven out of the company. One former employee says male colleagues completely ignored her comments in meetings. Another says a member of senior leadership impeded her career growth after she disagreed with him and that he created new management positions above her and filled them with men.
Other employees registered less consequential complaints about all the company jargon thrown around the office. Frazzini regularly expounded on the Amazon leadership principles. One of those was “Hire and develop the best,” which was flattering to employees but didn’t tell the full story.
“The philosophy Amazon takes is: Hiring expertise is secondary to having leaders who follow the Amazon principles,” says Child, the former employee. “Amazon does hire experts from various industries, but then they expect those folks to adopt the Amazon way.”
The game studios even established their own separate set of principles, although the credos frequently changed and sometimes were in tension with one another, say four people who worked there. Each game world should accommodate as many players as possible, yet also be fun to play solo at the same time.
They had to be huge financial successes on a Call of Duty scale but also innovative and unlike anything the world had seen before. To experienced game developers, these rules seemed like a surefire way to not release anything.
Amazon didn’t give employees much financial incentive to release anything, either. Most big game companies pay staff bonuses based in part on the critical and commercial response to their games, but Amazon’s stock plan only rewards employees for time spent at the company. That led some to prioritize job preservation over anything else, say three former employees.
They say they watched colleagues avoid arguments and only seek to placate bosses like Frazzini, even when they disagreed. (This was in defiance of the Amazon principle “Have backbone; disagree and commit.”)
Frazzini’s lack of experience in video games showed during project review sessions, a standard industry ritual when the boss plays early prototypes and offers feedback. His comments were of the focus-group variety, recalls a former Amazon developer: “Why is it this color?” and “Seems fun. When will it be ready?”
On a different occasion, says another developer, the team cringed as Frazzini struggled to differentiate between hyper-polished conceptual footage and live gameplay, a sign he didn’t understand the technology.
Some meetings got sidetracked when Frazzini, armed with the latest VentureBeat article about whatever game was making the most money that month, demanded they chase a new trend, four developers say. The team wound up designing lesser versions of popular games, a desperate strategy laid out in a recent Wired article.
Riot Games Inc.’s League of Legends inspired an Amazon project called Nova that was canned in 2017. Epic Games Inc.’s Fortnite led to another Amazon game, Intensity, canceled in 2019. Activision Blizzard Inc.’s Overwatch begot Amazon’s Crucible, which would suffer a similar fate.
Amazon’s most successful gaming property isn’t actually a game. Twitch draws some 26 million people a day to watch live video of other people playing video games. Frazzini helped secure the acquisition in August 2014 for $970 million, which would later prove to be a bargain. Various attempts by Facebook, Google and Microsoft Corp. to build their own live-streaming networks for games have failed.
Soon after the Twitch deal, Bezos devised a plan to closely pair Amazon Game Studios with the video site, say two people who met with the CEO. Twitch would serve as a free marketing vehicle for Amazon games, and the games, in turn, would offer Twitch viewers features they couldn’t get anywhere else.
The two teams held daylong brainstorming sessions, but the summits didn’t amount to much, according to people who attended. One concept they did pursue together was a series of celebrity events to promote their games and sell subscriptions to Amazon Prime.
They held one in New Jersey featuring the Clerks filmmaker Kevin Smith. Attempts to land other stars, including Dwayne “The Rock” Johnson, for a second event in Las Vegas were unsuccessful. They invited Smith back and then shelved the series.
The Twitch chief, Emmett Shear, was reluctant to assign his employees to projects for the game studios, two people who worked with him say. One proposal, pushed by Frazzini in 2017, asked Twitch to help build a digital game store, the former employees say. The idea would allow Amazon to avoid paying a 30% sales commission to Steam, the most popular storefront for PC games.
Twitch employees weren’t thrilled because Amazon didn’t have any big games with which to attract shoppers. Frazzini’s employees assigned to collaborate on the project protested because bypassing Steam would shrink their market, four former employees say. Withholding a game from Steam, they argued, is the equivalent of refusing to sell a book on Amazon. When the project was due for more staffing resources, Shear resisted, and it was left to languish inside Amazon Game Studios.
Frazzini was more fixated on another project anyway. Amazon’s designers and programmers needed a game engine, a collection of tools used to build games. For most studios, there are really only two options. Epic’s Unreal Engine is Coke, and Unity Software Inc. is Pepsi. Amazon, in effect, decided to make an RC Cola. In 2014, it licensed technology from the German company Crytek for a homemade engine called Lumberyard.
Frazzini then assigned a team of engineers to build the engine and released it to the public in 2016 for free. The tools are intertwined with Amazon Web Services, setting up Lumberyard as a way to draw a new class of software developers to the business. Frazzini, who reports to Web Services Chief Andy Jassy, also mandated that all Amazon games be built with Lumberyard, rather than pay for Unreal or Unity.
Lumberyard became a bogeyman around the office. Some features required esoteric commands to function, and the system was painfully slow. Developers played Halo or watched Amazon Prime Video while waiting for Lumberyard to process art or compile code, several former employees say. A common refrain around the office, according to a former employee: “Lumberyard is killing this company.”
From the outside, though, Amazon’s game operation was scaring competitors. It had some of the world’s brightest minds, a deep budget and the most sophisticated internet infrastructure on earth. It was building a proprietary engine, and at TwitchCon in 2016, Amazon said it was working on three new games: Breakaway, Crucible and New World. (Nova, the League of Legends copycat, was still under lock and key.) Over the coming years, all but one would be canceled.
In the summer of 2018, Frazzini nabbed his biggest hire yet. Christoph Hartmann, the new vice president of game studios at Amazon, had spent two decades at Take-Two Interactive Software Inc., where he published blockbusters such as BioShock and Mafia. It was a somewhat controversial hire, as Hartmann was also responsible for some high-profile failures, such as The Bureau: XCOM Declassified, which led to the developer’s demise.
Still, Frazzini positioned Hartmann as a fixer to staff. Hartmann loosened the mandate to make everything with Lumberyard, and some teams began prototyping games using Unreal Engine. Hartmann also pressed Amazon to publish titles made by other companies. It signed one such deal with the Korean publisher Smilegate to release a game in 2021.
Soon after Hartmann’s appointment, Amazon came close to capturing a much brighter star in the media world. The company informed staff in 2018 that Jason Kilar, a former Amazonian and onetime Hulu CEO, was rejoining to oversee the Amazon games division and presumably become Frazzini’s boss, say two people who were there at the time.
For unexplained reasons, Kilar never arrived. (The almost-hiring was first reported by technology news site the Information.) In April 2020, he joined WarnerMedia as CEO.
With Frazzini still at the helm, the game studios began aligning themselves with Amazon’s far more successful film and television properties. The company said in 2019 that it was working with the Chinese developer Leyou Technologies Holdings Ltd. on an online game based on the Lord of the Rings as a complement to the upcoming Prime Video series.
That same year, Amazon released its first-ever console game, a racing simulation based on the Prime Video show The Grand Tour, a car review series starring the original British stars of Top Gear. The game bombed. It drew so few players that Amazon took the unusual step of removing it from storefronts a year later.
The embarrassments kept coming. In May 2020, Amazon released Crucible, the hero shooter inspired by Overwatch. “One of the things that we hear most often from people who try Crucible is that it feels unique,” Frazzini said in an interview at the time.
Gamers weren’t interested. Reviewers at IGN called it “tedious,” and PC Gamer declared: “Amazon’s long-awaited hero shooter wasn’t worth the wait.” Twitch didn’t offer much support, either. A week after release, fewer than 1,000 people were watching Crucible videos on Twitch.
Former employees of the live-streaming unit say Twitch was often reluctant to alter a game’s fate through promotion. After all, Twitch can’t save a game nobody wants to play. Amazon pulled Crucible from wide release in June and then killed it in October.
Amazon shifted many of the Crucible developers to work on New World. The project was originally pitched as a survival game in which people would play as colonists in a fictional version of 1600s America, fighting enemies that looked a lot like indigenous people. The original code name for the game was Roanoke, named after Sir Walter Raleigh’s failed settlements in the 16th century.
When developers at Amazon pointed out to Frazzini’s deputy, Patrick Gilmore, that the setting and villains could be considered racist, he expressed disbelief, according to two people who worked there. Gilmore didn’t respond to a request for comment. The disagreement, former employees say, fit a pattern of executives neglecting advice from staff.
Developers eventually removed the Native American imagery from New World. The game was set for release this past August, but after Crucible’s scathing reception, Amazon pushed the debut back to this year. Still, several Amazon employees are optimistic about the title. It has received positive buzz from streamers and is the kind of ambitious project Bezos is known to support, employees say.
Frazzini is fond of saying anything can be measured, according to two people who worked closely with him. This philosophy, common in Silicon Valley, is anathema to game industry veterans. “Nobody who’s successful starts with metrics,” says Seamus Blackley, who helped design the original Xbox.
The Microsoft game console was the last winning incursion into the video game market in the past two decades, despite expensive attempts including Apple Arcade, Facebook Oculus and Google Stadia.
Fairly or not, Frazzini gets a lot of the blame for Amazon’s gaming failures at a time when overall spending on video games during the coronavirus pandemic is up significantly.
After the cancellation of Crucible, an outgoing employee entered the Seattle office to collect personal belongings and found a crass message in big blue letters scrawled on a whiteboard: “Fraz is cancer.” Orbiting the note was a handful of “+1”s written in assorted colors.
The biggest new game product from Amazon has nothing to do with Frazzini. Amazon Luna lets subscribers instantly play console-grade games without the need to buy pricey hardware or wait hours to download a large file. The team released a version for Android devices in December, and the service remains in early access limited to customers who request an invitation.
The Luna project is overseen by David Limp, who runs the devices division that produces the Echo and Kindle. In its current iteration, Luna offers more than two-dozen games, none of which are made by Amazon Game Studios. “I hope that they have a hit,” Limp said in an interview in September. “But in addition, I think it’s equally important for us to build a system, and I think Luna has the starting points for that.”
In many ways, the approach to games mirrors the one that eventually led Amazon to some success in Hollywood. It tried a bunch of different things—develop a streaming service, set up a studio, produce TVs and films, build a set-top box—and selected an Amazon insider, Roy Price, to run it. Price produced a handful of bad shows before Transparent won Amazon its first Golden Globe in 2015.
Then came Oscars for Manchester by the Sea and more Golden Globes for The Marvelous Mrs. Maisel. Price was ousted in 2017 over sexual harassment allegations, and Bezos took the unlikely step of looking outside of the company, to Hollywood, for his replacement, Jennifer Salke. She cemented Amazon Prime Video as an important part of the company’s business strategy. People sign up for Prime to watch The Boys, and they buy more stuff on Amazon.
Amazon could still do the same in gaming. Luna demonstrates a continued commitment, as do the investments in New World and as-yet-unannounced projects including a secretive new game from Smedley, who laid the foundation for massively multiplayer online games in the late 1990s with EverQuest.
After Amazon’s misadventures in gaming, there’s at least one passage from the leadership principles the company will still hope to prove: “Leaders are right a lot.”
Amazon Preparing To Launch A ‘Digital Currency’ Project In Mexico
Job postings describe a walled garden-type digital currency that could roll out in emerging economies.
Amazon’s grip on the internet economy appears to be coming for currency next, with the e-commerce giant preparing to launch a “digital currency” project in Mexico.
The yet-to-be-announced project, which Amazon sketched out across a series of recent job posts, appears to be an effort to keep lucrative Prime customers eternally plugged into Amazon’s platform.
“This product will enable customers to convert their cash in to digital currency using which customers can enjoy online services including shopping for goods and/or services like Prime Video,” one job post said of Amazon’s “new payment product.”
Amazon’s Digital and Emerging Payments (DEP) division intends to roll-out the product in Mexico first, the posting said. A second job posting hints the product appears to be broadly aimed at emerging markets. Amazon is hiring software development engineers “at all levels” to staff up for launch.
The DEP team and Amazon did not respond to repeated requests for comment.
It is not clear how much Amazon’s planned foray into digital currencies has in common with “Amazon Coins.” That 8-year old virtual currency initiative allows owners to transact in Amazon-issued cash across web games.
Amazon Could Be Forced To Sell Logistics Business Under Bill
Amazon.com Inc. could be forced to sell its valuable logistics services division — the network of warehouses and delivery hubs around the country that power quick delivery of online orders — under antitrust legislation proposed by a congresswoman from Amazon’s hometown of Seattle, according to a spokesman for the lawmaker.
Washington Democrat Pramila Jayapal has proposed a bill with bipartisan support that would prevent Amazon from luring sellers to use its logistics services in exchange for preferential treatment on its busy web store. Nearly 85% of Amazon’s biggest sellers use its Fulfillment by Amazon service, paying the online retailer fees for warehouse storage, packing and shipping of their products, according to a report last October from Democratic staff on the House Judiciary Committee’s antitrust panel.
Jayapal’s bill was introduced on June 11 and will be considered on Wednesday by the Judiciary Committee along with five other bipartisan antitrust reform bills, with votes to advance the measures to the House floor expected this week. There’s no Senate companion for the legislation, and support in that chamber is unclear, clouding its prospects.
The legislation is part of a larger push in Washington to curb what critics describe as anti-competitive practices in the tech industry. The Justice Department and several state attorneys general have sued Google, while the Federal Trade Commission is suing Facebook and is investigating Amazon. President Joe Biden named Lina Khan, who rose to prominence criticizing Amazon’s business practices, to chair the FTC.
While the Jayapal bill may never become law, it’s the clearest indication yet how lawmakers are gunning to rein in the market power of Amazon, where U.S. shoppers will spend $386 billion this year and which captures 41 cents of every dollar spent online, according to EMarketer Inc. Amazon’s promise of fast delivery helped it become the dominant online retailer in the U.S.
“The bipartisan Ending Platform Monopolies Act requires dominant platforms including Amazon to divest lines of business — such as Fulfillment by Amazon — where the platform’s gatekeeper power allows it to favor its own services,” said Jayapal spokesman Chris Evans. “Numerous third-party sellers reported feeling that they had no choice but to pay for Fulfillment by Amazon in order to sell their products,” said Evans, referring to the House Democrats’ investigation and report.
Amazon’s logistics business will be worth as much as $230 billion in 2025, more than Coca Cola Co., according to a research note last year from Bank of America Corp.
“We are still analyzing the bills, but from what we can tell so far, we believe they would have significant negative effects on the hundreds of thousands of American small- and medium-sized businesses that sell in our store, and tens of millions of consumers who buy products from Amazon,” Brian Huseman, Amazon’s vice president of public policy, said in a statement Tuesday. He went on to say that without access to Amazon customers, sellers would find it harder to draw attention to their products, which in turn could reduce selection and push up prices for consumers. Huseman urged lawmakers to “thoroughly vet the language in the bills for unintended negative consequences.”
Jayapal’s legislation shows how some lawmakers want to blunt Amazon’s rapid growth in the logistics industry, which poses a threat to United Parcel Service Inc. and FedEx Corp. Amazon has been reducing its reliance on its longtime partners, including the U.S. Postal Service, in favor of delivering products on its own.
More than half of the products sold on Amazon come from independent merchants who pay Amazon a commission on each sale. Merchants can handle packing and shipping items on their own, but many say they use Amazon’s service and pay Amazon additional fees because that gives their products better placement on the site and boosts their sales, according to the Democrats’ report. Amazon’s third-party seller service revenue, which includes commissions and logistics, exceeded $80 billion in 2020, nearly double the $45 billion in sales from its cloud-computing division Amazon Web Services.
Amazon uses algorithms to determine which products appear most prominently on the site in response to keyword search terms entered by shoppers. Much of the most visible space goes to paid advertisers. Mixed in are products that Amazon believes are preferred by consumers. Exactly how the algorithm works is a well-kept secret. It includes factors like price, the reputation of the merchant and whether Amazon can deliver it to the customer quickly. Merchants have said they use Amazon’s logistics services as a way to get better visibility on the cluttered site.
In a 2019 letter to federal lawmakers, an online merchant accused Amazon of forcing him and other sellers to use the company’s expensive logistics services, which in turn forces them to raise prices for consumers. The letter accused Amazon of “tying” its marketplace and logistics services together, a potential antitrust violation in which a company uses dominance in one market to give itself an advantage in another market where it’s less established.
Sellers said in interviews that delivering products on their own was potentially less expensive than Amazon’s services. But most said they used Fulfillment by Amazon anyway to avoid being punished for late deliveries and other performance issues and because doing so meant their products had more visibility on the site. In the letter, the merchant said Amazon had raised its fees by 20% over the preceding four years until they were 35% more than competing services. Amazon disputed the allegations.
Amazon Considered Developing Alexa Tracking Device For Children
Amazon.com Inc., whose home and surveillance devices have drawn criticism from privacy advocates, has considered developing an Alexa-powered wearable device for children.
Codenamed Seeker, the GPS-equipped device would be geared toward kids aged 4 to 12 and could take the form of a wristband, keychain or clip, according to documents reviewed by Bloomberg. The voice-activated wearable would provide access to Amazon’s children-focused content and let parents communicate with and monitor their kids.
Amazon was exploring the concept of the device in mid-2019 as part of its product roadmap for 2020, and it’s unclear whether the project moved forward.
The company has sought to develop various Alexa-enabled products targeting children. A wearable Disney gadget codenamed the Magic Band is scheduled to arrive this year, according to the documents. It’s unclear whether it’s a toy or is associated with the guest-tracking Magic wristband Walt Disney Co. has deployed in its parks and hotels.
The two companies already collaborate in various ways. Amazon’s cloud computing division powers the Disney+ streaming service, and, earlier this year, Amazon began offering its music service subscribers several free months of Disney+.
Amazon and Disney declined to comment.
Amazon had also planned to release an Alexa-powered karaoke microphone dubbed Jackson on Prime Day, but no such device was forthcoming during the two-day annual sale last month.
The e-commerce giant planned to sell the kid-focused Seeker wearable for $99, including wireless connectivity and a year’s access to the company’s FreeTime Unlimited subscription, which has since been rebranded Kids+. The subscription costs $2.99 per month for access to books, movies, television shows, apps and games aimed at children and lets parents set limits on screen time and filter content based on a kid’s age.
A child-oriented device would mark an expansion of Amazon’s ambitions in consumer hardware. Last year, the company released a fitness band called Halo that can track physical activity, sleep, body fat and the wearer’s mood. The company has also been working on a home robot.
Advocacy groups and lawmakers have in the past criticized Amazon’s privacy protections for devices aimed at children. In 2019, the Campaign for a Commercial-Free Childhood, now known as Fairplay, and the Center for Digital Democracy joined several other groups to file a complaint with the Federal Trade Commission. They argued that Amazon’s Echo Dot Kids Edition infringed on children’s privacy rights by collecting data without verifiable parental consent.
The complaint also said the company retained recordings from the devices indefinitely, unless a parent explicitly requested they be deleted, and said the process for reviewing what information the devices collected was burdensome. Several U.S. senators also called on the FTC to investigate whether Amazon had violated the Children’s Online Privacy Protection Act with the device.
Amazon said at the time that it was compliant with the law and on its corporate website lays out the steps it has taken to protect the privacy of FreeTime subscribers.
In the fall of 2019, Amazon unveiled new privacy tools, including an opt-in feature that lets users automatically delete their Alexa recordings on a periodic basis. The privacy enhancements followed a Bloomberg report that thousands of Amazon workers around the world were reviewing audio clips collected by Alexa devices in an effort to improve their responses to commands.
Amazon Set To Accept Bitcoins, Develop Crypto Strategy
While there are big companies that do accept cryptocurrencies as payments, Amazon is not one of them, perhaps because of its unpredictable volatility. Yet the company is about to change its attitude towards cryptocurrencies and even plans to develop a special cryptocurrency and blockchain strategy.
Business Insider has found an Amazon job listing that seeks a leader who will develop the retailer’s Digital Currency and Blockchain strategy as well as a product roadmap. The future employee of Amazon will be a part of The Amazon Payment Acceptance & Experience Team is responsible for ‘how Amazon’s customers pay on Amazon’s sites and through Amazon’s services around the globe,’ which pretty much implies that one of the world’s biggest retailers will start accepting cryptocurrency as payments sometimes in the future.
Indeed, Amazon has confirmed to Business Insider that it is going to accept cryptocurrencies, but did not reveal when exactly this is set to happen.
“We are inspired by the innovation happening in the cryptocurrency space and are exploring what this could look like on Amazon,” a statement by Amazon reads. “We believe the future will be built on new technologies that enable modern, fast, and inexpensive payments, and hope to bring that future to Amazon customers as soon as possible.”
Amazon used to be pretty sceptic about cryptocurrencies back in 2017 due to lack of demand, but as more people start using cryptocurrencies to keep their savings or make investments, there are obviously enough parties interested in using various digital coins for payments and avoid their conversion to real money.
What remains to be seen is how Amazon plans to mitigate volatility of cryptocurrencies like Bitcoin that can fluctuate significantly even during a week. Perhaps, the company will simply convert Bitcoins to real money quickly. Alternatively, it may attempt to make some additional profits by waiting till a digital currency goes up in price.
But no matter what Amazon will do with cryptocurrencies it gets as payments, the very idea that such a large retailer will accept cryptocurrencies increases their value and makes some of the holders richer.
Amazon Denies Rumored Plans For Bitcoin Support
Despite rejecting rumors, the e-commerce giant will soon support Bitcoin payments. A spokesperson for Amazon has said the firm is still interested in the crypto space.
Amazon has refuted recent speculation it may be readying to support Bitcoin (BTC) payments, asserting it currently has no plans for BTC.
According to a Reuters report on Tuesday citing a spokesperson from the firm, Amazon remains interested in the crypto industry but has no specific plans to onboard digital assets for payments just yet:
“Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true.”
However, the spokesperson did not deny that Amazon is researching crypto payments, adding, “We remain focused on exploring what this could look like for customers shopping on Amazon.”
On Thursday, Amazon posted a job opening for a digital currency and blockchain product lead. Four days later, London’s City A.M. newspaper ran a story citing an “insider” who claimed Amazon was “definitely” preparing to support Bitcoin payments and launch a native token — igniting frenzied anticipation for Amazon’s purported crypto plans.
Chinese crypto media outlet Wu Blockchain attributed Amazon’s rumored plans to Monday’s surging market action, during which Bitcoin gained roughly 15% in less than three hours amid a violent squeeze that drove more than $110 million in liquidations. In a tweet on Monday, Wu stated:
“Bitcoin rose by 12% in one hour, leading the increase. Because [the] Chinese have just gotten up. It is obvious that the price of Bitcoin has started to rise after this rumor about Amazon spread in the Chinese community.”
With Amazon dismissing its rumored plans to support Bitcoin, BTC prices have started to retreat. At the time of writing, BTC was trading down 4.4% over the past 24 hours at $36,770, according to CoinGecko.
On Friday, Cointelegraph reported on the position posted by Amazon’s payments acceptance and experience steam. The product lead will be tasked with developing the company’s strategy of digital currency and blockchain as well as a product roadmap.
Amazon Plans To Accept Bitcoin Payments This Year, Claims Insider
“It begins with Bitcoin,” an anonymous insider said in describing Amazon’s intent to enter the cryptocurrency payments arena.
An anonymous source within Amazon has reportedly told London business newspaper City A.M. that the e-commerce giant is planning to start accepting Bitcoin (BTC) payments by the end of 2021, possibly setting the stage for broader mainstream acceptance of crypto transactions.
“This isn’t just going through the motions to set up cryptocurrency payment solutions at some point in the future — this is a full-on, well-discussed, integral part of the future mechanism of how Amazon will work,” the source told City A.M., according to a report published on Sunday.
The source indicated that, while Bitcoin is the first step in Amazon’s crypto ambitions, executives at the company were keen to add other established cryptocurrencies in the future. The “directive is coming from the very top,” referring to Jeff Bezos, they said, adding:
“This entire project is pretty much ready to roll.”
In addition to accepting Bitcoin payments, Amazon is said to be exploring the creation of its own cryptocurrency, possibly as early as 2022, they said.
Speculation about Amazon’s entry into the cryptocurrency market has been raging for days after a new posting for “Digital Currency and Blockchain Product Lead” appeared on the company’s job board last week. As per the job description, the new hire will help develop Amazon’s digital currency strategy and product roadmap. The position requires strong domain expertise in blockchain, distributed ledgers, central bank digital currencies and crypto more generally.
This isn’t the first crypto-focused job posting at Amazon. As Cointelegraph reported, the e-commerce giant in February was recruiting a technical lead to help develop its new “Digital and Emerging Payments” platform.
Ready To Deploy? Amazon’s Bitcoin Acceptance Can Prime A Payments Future
Amazon denied reports it will accept BTC payments soon, but seemingly, it’s only a matter of time before the tech giants embrace the token economy.
Maybe Amazon really isn’t preparing to accept Bitcoin (BTC) as payment for its goods and services before year’s end, and perhaps Apple isn’t in fact adding $2.5 billion of Bitcoin to its balance sheet — although both events were reported recently, they are still unconfirmed. The question still remains: If and when the tech giants do commit, what impact will they have on the cryptocurrency and blockchain industry?
Would it spur crypto adoption or revive Bitcoin as a medium of exchange? Would it confer a seal of approval on digital assets and discourage governments from clamping down on blockchain-based tokens?
“This would be a huge validation for crypto,” said Kapil Rathi, co-founder and CEO of CrossTower — an institutional-grade crypto 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 it or offer it as products.”
The Amazon report originated from a United Kingdom newspaper, City A.M., which disclosed via an anonymous Amazon “insider” that the e-commerce giant could begin accepting Bitcoin before the end of the year. Amazon later denied the report, but Roman Beck, a professor at IT University of Copenhagen, told Cointelegraph that it really wouldn’t have much of a lasting impact on the sector — even if true.
“Amazon could have been a leading force in the tokenization of the e-commerce industry,” Beck said, “capitalizing on its huge installed base of customers on a global scale.” Instead, it squandered its opportunity: “Amazon lost precious years in developing digital leadership in the emerging token economy.” The company should have embraced crypto two or three years ago, in his view.
As for the social media reports — also unconfirmed — that Apple was purchasing $2.5 billion in Bitcoin for its corporate treasury, its first real foray into crypto, Beck was equally unimpressed: “Adding some Bitcoin to your balance sheet is something many companies are doing already as part of their asset diversification strategy. It’s no big deal either anymore.”
Taylor Monahan, founder and CEO of blockchain interaction interface provider MyCrypto, appeared to agree with Beck with regard to Apple. “In December 2020, we saw a surge of companies holding Bitcoin on their balance sheets,” which also included the electric vehicle manufacturer Tesla.
She further added in a conversation with Cointelegraph, “Nowadays, it’s noteworthy when a company announces they’re holding it, but it’s no longer a groundbreaking occurrence.”
On the other hand, the Amazon news — if it were eventually to pan out — could be more consequential. “Actually utilizing Bitcoin for goods and services? That’s still largely unexplored,” Monahan said.
Pat White, CEO of Bitwave — a provider of digital tax and accounting software — took the position that where there’s smoke there’s fire. The tech giant rumors could be true — if not in their exact details, but in their essence. “I believe it,” he told Cointelegraph, referring to the Amazon report.
Even though the company denied it, it is almost surely doing research in this area, according to him. “All the major [retail] players would love to have their own currency for their platforms,” opined White, “it’s exciting news.”
White doesn’t believe that Amazon would be arriving too late to the crypto space, either. “Amazon has to be careful,” he continued. As a public company, it will have to explain what it is doing if it makes any material change in its business. It has a stack of problems it has to solve first. How does it get crypto into its accounting system, how does it explain the accounting changes to its audit committee, etc?
Moreover, it’s probably not just looking at Bitcoin. There are many types of cryptocurrencies it might accept, and it would have to track them all. It would require all sorts of wallets. He believes, “There are real challenges businesses have to go through, especially since they are a public company.”
Greater Acceptance For Bitcoin?
If Amazon were to accept BTC, and it basically worked from a business standpoint, this might bestow “additional respectability” upon Bitcoin and perhaps other cryptocurrencies, Lawrence White, a professor in George Mason University’s economics department and a senior scholar at the Cato Institute Center for Monetary and Financial Alternatives, told Cointelegraph. This would be arguably “bigger news” for the sector than PayPal’s entry into the cryptocurrency market in October, which was generally viewed as a major event.
“It would be an enormous deal,” agreed Pat White (no relation to Lawrence White). Both Amazon and Apple could have “massive importance,” he said though for different reasons. “Amazon would trigger Congressional hearings,” he continued, raising questions whether we were really becoming a corporatocracy — i.e., a system governed by corporations. “Though, it would be incredibly bullish for the market,” he added.
Apple would be significant for another reason, Pat White continued. The company has one of the world’s most complex supply chains, so “if Apple simplified its supply chain using digital assets, that would be a major deal. […] It could change what supply chain means.”
Facebook Was The “First Mover”
Beck has a different historical take. The giant tech “spell was broken when Facebook announced Libra/Diem,” he told Cointelegraph, adding, “That was the [sign] for Big Tech and other industries to get ready. Amazon is late to the game and will have a market effect on the demand for Bitcoin, for sure, but Facebook has been the first mover.” As for Apple, and, equally important, Alphabet, the impact is still unclear, he continued, “but it is fair to say that those two are late to the game already.”
Rathi disagreed that Amazon’s timing is necessarily flawed. “It would still be relatively early versus the vast majority of companies,” he told Cointelegraph, and it would also make Bitcoin more viable as a payments vehicle, adding:
“It would give Bitcoin holders more options to spend their BTC and could thus spur its use as a medium of exchange.”
George Mason University’s Lawrence White 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 BTC to dollars and dollars to BTC isn’t exactly a seamless process at present. “If your income is in dollars and your expenditures are in dollars, it seems like a lot of trouble — a hassle — so it’s not real popular,” he noted.
Overstock, for instance, is an e-commerce firm that began accepting BTC payments 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 $30,000 to $50,000 a week came from cryptocurrency,” Overstock’s CEO Jonathan Johnson told the newspaper — a relative pittance. Amazon would have to do much better than that to boost Bitcoin’s stature 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 coin, like gift card 2.0,” he added. That way, they can cut out the intermediaries — e.g., Visa taking its 3%, etc. Beck agreed that an “Amazon coin,” which would enable efficient machine-to-machine coordination and payments, was a more likely path for the company.
A Crackdown Made Less Likely?
Looking elsewhere, what impact could the entry of tech giants have on governments and regulators? If Amazon or Apple made a strong move in the crypto direction, would that make it less likely that the United States might crackdown on Bitcoin or other cryptocurrencies?
“Alan Greenspan once supposedly said that regulators cannot ‘lean against the wind’ to dampen economic swings,” answered Beck. In the case of the emerging token economy, “IT is that wind of change. […] Any regulator continuing a fundamental opposition toward crypto tokens is doomed to fail.”
Lawrence White wasn’t quite so sure the authorities really are powerless on this score. The government can’t ban BTC as long as it’s peer-to-peer, he told Cointelegraph, but “the government can ban it from being above ground,” and that is probably enough to eliminate it as an effective medium of exchange.
Meanwhile, what does one make about the dramatic market response to the Amazon rumors — a 15% gain in BTC in three hours last Monday? It is arguably yet another example of crypto’s extreme volatility — and not a particularly good advertisement for a would-be 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 crypto investors have been yearning for positive news, while prices were declining for months.”
Overall, “This type of adoption makes me think back to 2013 when a huge focal point for Bitcoin was to use it for payments,” Monahan said, “but the narrative moved away from that over time and more towards Bitcoin as a store of value. If we again go back to the idea of using Bitcoin for payments and not simply as an investment, it could make Bitcoin much more valuable.”
“More and more companies accepting it will add to the significance, though, especially with the added context of El Salvador and the regulatory discussion,” added Monahan. “It may transform things for Bitcoin in the next few years.”