Amazon’s Full-Circle EconomyIn this hypothetical futuristic scenario, Amazon extends on the suite of products and services it provides customers in 2018 including: online shopping, physical grocery, web services, artificial intelligence, internet of things, video and music streaming, healthcare (in development) and banking (small business loans).For reference, Amazon ships to 100 countries and has separate retail websites for 15 countries. In the United States alone, 55 percent of online shoppers begin their searches on Amazon and over 80 million shoppers subscribe to Amazon Prime.In the future, the customer-obsessed, low-priced “Amazon economy” could expand into all industries and become self-sufficient. In other words, Amazon will be selling everything to everybody in the “best” and cheapest way possible. In this hypothetical scenario, instead of 15 individual Amazon marketplaces scattered across the world operating in country-specific currencies, imagine a global Amazon e-commerce store with a single sign-on, billions of unique ASINs, and the Amazon Token as a single payment method.In a recent study by LendEDU, 52 percent of 1,000 Amazon customers surveyed responded that they would use an Amazon-created cryptocurrency to make purchases on the Amazon website. So, what might the Amazon token look like?Amazon’s Past Attempt at Tokenization: Amazon CoinIn 2013, Amazon released the Amazon Coin, a virtual currency designed for U.S. customers to “purchase apps, games and in-app items on Kindle Fire” on the Amazon Appstore. Each never-expiring Amazon Coin is worth a cent, meaning that 100 Amazon Coins are worth one dollar. Users are enticed to use Amazon Coins in the Amazon Appstore because they can earn up to a 24 percent discount on their purchases. For the curious reader, Amazon Coin can be purchased here. Ultimately, the Amazon Coin hasn't been a smashing success for a variety of reasons:Amazon Coin is exclusively useful for the niche market of the Amazon Appstore. The Amazon Coin is not an option to purchase any other goods or services offered by Amazon.
There is no secondary market for users to resell unused Amazon Coins to one another.
Many users feel that the Amazon Coin creates an unnecessary layer of friction in the payment process, asking questions such as, “Why would I need to convert my fiat currency into a virtual currency to purchase an item on the Amazon Appstore that can already be purchased with my fiat currency?”
Interestingly enough, Amazon is not the only company that has previously attempted (and failed) to create a long-lasting virtual currency for a niche in their ecosystem. In 2005, Microsoft created the Microsoft Points currency for content on the Xbox marketplace. In 2009, Facebook created Facebook Credits for game purchases and virtual gifts. Neither currency is widely used.
