Maybe Amazon is really not ready to accept Bitcoin (Bitcoin) As a payment for its goods and services before the end of the year, perhaps Apple did not actually add $2.5 billion in Bitcoin to its balance sheet-although these two events have been reported recently, they have not yet been confirmed. The question remains: If the tech giants make a promise, what impact will they have on the cryptocurrency and blockchain industry?
Will it stimulate the adoption of cryptocurrencies or will it reinvigorate Bitcoin as a medium of exchange? Will it grant a stamp of approval for digital assets and prevent the government from cracking down on blockchain-based tokens?
“This will be a huge verification of encryption,” said Kapil Rathi, co-founder and CEO of CrossTower, an institutional-level encryption trading platform, when asked whether the rumors are real-time. “This will be a clear sign that for a company of this size to implement encryption or provide it as a product, users have a great demand for encryption.”
Amazon’s report originated from a British newspaper, City AM, which disclosed through an anonymous Amazon “insider” that the e-commerce giant may start accepting Bitcoin before the end of this year. Amazon later denied the report, but Roman Baker, a professor at the University of IT in Copenhagen, told Cointelegraph that it would not have much lasting impact on the industry—even if it was true.
“Amazon could have become the dominant force in the tokenization of the e-commerce industry,” Baker said, “utilizing its large global customer base.” Instead, it wasted its own opportunities: “Amazon is in the emerging token economy. Lost valuable time to develop digital leadership.” In his view, the company should have embraced encryption two or three years ago.
As for social media reports-also unconfirmed-Apple is buying $2.5 billion in Bitcoin for its corporate finances. This is its first real foray into cryptocurrency. Baker is also unmoved: “On your balance sheet Adding some bitcoin to it is something that many companies are already doing as part of their asset diversification strategy. It’s not a big deal.”
Taylor Monahan, the founder and CEO of blockchain interface provider MyCrypto, seems to agree with Beck’s view of Apple. “In December 2020, we saw a surge in companies holding Bitcoin on their balance sheets,” this also Including electric vehicle manufacturer TeslaIn her conversation with Cointelegraph, she further added: “Nowadays, it is worth noting that a company announces that they hold it, but this is no longer a seminal event.”
On the other hand, Amazon’s news-if it succeeds in the end-may be more important. “Practically using Bitcoin for goods and services? This is still largely unexplored,” Monaghan said.
Pat White, CEO of Bitwave, a digital tax and accounting software provider, takes the position that where there is smoke, there is fire. The rumors of the tech giant may be true—if not in their exact details, but in their essence. “I believe it,” he told Cointelegraph, referring to Amazon’s report. According to him, although the company denies this, it is almost certain that it is conducting research in this area. “All major [retail] Players want to have their own currency for their platform,” White believes, “This is exciting news. “
White also doesn’t think Amazon will enter the cryptocurrency space too late. “Amazon must be careful,” he continued. As a public company, if there are any major changes in its business, it must explain what it is doing. It has a bunch of problems that must be solved first. How does it incorporate cryptocurrency into its accounting system, how does it explain accounting changes to its audit committee, etc.?
In addition, it may not only focus on Bitcoin. It may accept multiple types of cryptocurrencies, and they must be tracked. It needs various wallets. He believes that “companies must experience real challenges, especially because they are a public company.”
Higher acceptance of Bitcoin?
Lawrence White, a professor in the Department of Economics at George Mason University and a senior scholar at the Cato Institute Center, said that if Amazon accepts Bitcoin, and it is basically from a business perspective, this may bring “extra” to Bitcoin and other cryptocurrencies. Respect” for currency and financial alternatives, told Cointelegraph.For the industry, this can be said to be “bigger news” rather than PayPal enters the cryptocurrency market In October, this is usually considered a big event.
“This will be a huge deal,” Pat White agreed (it has nothing to do with Lawrence White). Although for different reasons, he said that both Amazon and Apple may be of “great importance.” “Amazon will trigger a congressional hearing,” he continued, questioning whether we have really become a corporate governance system—that is, a system governed by companies. “Nevertheless, this will be incredibly bullish for the market,” he added.
Pat White went on to say that there is another reason why Apple is important. The company has one of the most complex supply chains in the world, so “if Apple uses digital assets to simplify its supply chain, it will be a major transaction. […] It may change the meaning of the supply chain. “
Facebook is the “first mover”
Baker has a different historical perspective.He told Cointelegraph that when Facebook announced Libra/Diem, this huge technology was “broken” and added, “That’s [sign] Prepare for large-scale technology and other industries. Amazon is late and will definitely have a market impact on the demand for Bitcoin, but Facebook has always been the first mover. “As for Apple, and the equally important Alphabet, its impact is not yet clear, he continued, “But to be fair, the two companies are already late. “
Rathi disagrees that Amazon’s timing must be flawed. “Compared to the vast majority of companies, it is still relatively early,” he told Cointelegraph, which will also make Bitcoin more viable as a payment tool, adding:
“This will provide Bitcoin holders with more options to spend their BTC, thereby stimulating 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 use it that way. Currently, converting BTC to USD and converting USD to BTC is not a seamless process. “If your income is in U.S. dollars, and your expenditures are in U.S. dollars, it seems troublesome-very troublesome-so it is not really popular,” he pointed out.
For example, Overstock is an e-commerce company that started accepting BTC payments in 2014. Its sales in the first three quarters of 2020 are close to 2 billion U.S. dollars, according to Jonathan Johnson, Overstock’s chief executive, told the paper that “on average, only $30,000 to $50,000 per week comes from cryptocurrencies”-relatively insignificant. Amazon must do better than this to enhance Bitcoin’s status as a payment mechanism.
In any case, this may not make practical sense-because if BTC enters the crypto space, Amazon may not even accept it, Bitwave’s Pat White told Cointelegraph. “They may want to develop their own tokens, such as Gift Card 2.0,” he added. In this way, they can dispense with middlemen—for example, Visa takes away 3% of its shares, and so on. Beck agreed that an “Amazon token” that can achieve efficient machine-to-machine coordination and payment is a more likely way for the company.
The possibility of suppression has decreased?
From another perspective, what impact will the entry of technology giants have on the government and regulatory agencies? If Amazon or Apple take strong measures in the direction of encryption, will this reduce the possibility of the United States cracking down on Bitcoin or other cryptocurrencies?
“It is said that Alan Greenspan once said that regulators cannot’go against the wind’ to curb economic fluctuations,” Baker replied. For the emerging token economy, “IT is the wind of change. […] Any regulatory agency that continues to fundamentally oppose crypto tokens is doomed to fail. “
Lawrence White is not sure that the authorities are really powerless in this regard. He told Cointelegraph that as long as BTC is peer-to-peer, the government cannot ban it, but “the government can ban it on the ground”, which may be enough to eliminate its status as an effective medium of exchange.
At the same time, the market’s dramatic reaction to Amazon’s rumors-BTC rose by 15% in 3 hours last Monday, what is your opinion? This can be said to be another example of the extreme volatility of cryptocurrencies-this is not a particularly good advertisement for a potential medium of exchange. “As we saw in the spring, the crypto market likes to react strongly to potential headlines,” Rathi said, adding:
“The difference this time is that the title comes from a relatively reputable publication, which gives it more weight. I also think that cryptocurrency investors have been eager for good news, but prices have fallen for months.”
Overall, “this type of adoption reminds me of 2013, when a major focus of Bitcoin was to use it for payments,” Monaghan said, “but over time, the narrative gradually deviated from this. At one point, there has been more of a shift towards Bitcoin as a store of value. If we return to the idea of using Bitcoin for payment and not just as an investment, it may make Bitcoin more valuable.”
“However, more and more companies accept it will increase its importance, especially in the context of El Salvador and regulatory discussions,” Monaghan added. “It may change the state of Bitcoin in the next few years.”