A survey featuring 1,000 customers of Amazon conducted by LendEDU indicated that 52% of the respondents would make use of a virtual currency created by the online retail giant to make purchases on its platform. That cryptocurrency doesn?t exist yet though it wouldn?t be an entirely new idea for the Seattle, Washington-based Amazon.
Five years ago Amazon unveiled a virtual currency known as Amazon Coin primarily for its customers in the United States who would use it to buy games, apps as well as in-app products on Kindle Fire. The value of Amazon Coin is one cent and thus one dollar is the equivalent of 100 Amazon Coins. One of the incentives employed to encourage the use of the coin is to give discounts whenever purchases are made using the Amazon virtual currency.
Despite the discounts the Amazon Coin has failed to become a success and the reasons are myriad. For one the digital coin is only used to buy games, apps as well as in-app products on Kindle Fire but no other items that Amazon stocks. This is of course limiting. Additionally a secondary market does not exist that users can turn to when they want to exchange their coins with one another.
Amazon is however not the only tech giant that has experimented with a virtual currency though. In 2005 another Washington-based tech giant, Microsoft, created a virtual currency known as Microsoft Points that was intended to be used in buying content on the marketplace of Xbox.?
Social media giant Facebook has also toyed with the idea of a cryptocurrency. In 2009 the social network created a digital currency known as Facebook Credits which is used to buy virtual gifts and games. Neither Microsoft Points nor Facebook Credits has become incredibly popular.
With the reasons why the existing Amazon virtual currency has failed already known the way forward for the e-commerce giant would be to create a digital coin which encompasses the entire ecosystem and not just a particular niche. If Amazon went ahead and did this it would result in the first truly global digital currency that possesses a trillion-dollar protocol.
Hypothetically there are many kinds of tokens Amazon would have at its disposal if it wanted to create its own virtual currency. It could either choose to go with a utility-based token or a hybrid token. With the utility-based token the virtual currency that Amazon would create would serve as a means of exchange on the e-commerce platform.?
To enhance the adoption rate of this virtual currency Amazon could decide to set a deadline and refuse to accept fiat currencies after the expiry. Additionally the e-commerce giant could airdrop some tokens to encourage adoption.
With a hybrid token additional benefits which are not available to fiat currencies would be unlocked and this would entitle the holders of the token to ?dividends? from Amazon. The hybrid model would however be risky but the benefits would be huge as well since it could make financial intermediaries that Amazon relies on redundant.
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