Tim De Chant - 7/26/2021, 4:57 PM
Amazon posted a job opening late last week that suggested the e-commerce giant may be considering accepting cryptocurrencies as a form of payment.
The posting sent bitcoin and other cryptocurrencies surging, with bitcoin and ethereum up 12 percent and 9 percent, respectively, over the past 24 hours. The development also came on the heels of an event last Wednesday where crypto boosters Elon Musk and Jack Dorsey reiterated their support for bitcoin and other cryptocurrencies.
Amazon is looking for a “Digital Currency and Blockchain Product Lead,” who will be a member of the Payment Acceptance and Experience Team, which the posting says is “responsible for how Amazon’s customers pay on Amazon’s sites and through Amazon’s services around the globe.”
If Amazon does decide to accept cryptocurrency as a form of payment on its site or for AWS, it’s not clear whether the company will use an existing cryptocurrency or develop a new one. It’s likely that Amazon hasn’t decided on a specific approach yet. The posting says the product lead would work with various Amazon teams, including AWS, to “develop the roadmap” and “develop the case for the capabilities which should be developed, drive overall vision and product strategy, and gain leadership buy-in and investment for new capabilities.”
Amazon is no stranger to blockchain technologies. AWS already offers blockchain services, and while it’s possible that any new initiative would expand those, this position does not appear to be focused on enterprise blockchain but rather alternative payment methods for the company's e-commerce customers.
Amazon isn’t the only company exploring whether to accept cryptocurrency payments. Last week, Elon Musk said that Tesla might be changing its position—again. “Most likely the answer is that Tesla would resume accepting bitcoin,” Musk said at the B Word conference.
Jack Dorsey, CEO of Twitter and Square, also reiterated his support of bitcoin at the conference. As of February, his payments company, Square, held over $200 million worth of bitcoin.
But Square’s holdings pale in comparison with Tesla, which held $2.48 billion worth of bitcoin as of March 31. The automaker has had an on-again, off-again relationship with the cryptocurrency. After announcing earlier this year that Tesla would accept bitcoin, Musk said in mid-May that the company would halt the practice. Musk had grown concerned about the cryptocurrency’s environmental impact after reading reports about its carbon footprint, including one on Ars about a power plant that was revived to mine bitcoin.
“Tesla’s mission is accelerating the advent of sustainable energy. We can’t be the company that does that and also not do appropriate diligence on the energy usage of bitcoin,” Musk said at the conference last week. Yet apparently, he thinks that the trend is changing. “Now, it looks like bitcoin is shifting a lot more to renewables,” he added.
Musk has said in the past that he has had conversations with bitcoin miners about moving to renewable power. Still, it’s not clear whether miners have been making the change or that they will follow through with their plans. Most estimates of bitcoin’s use of renewable power come from self-reported data, which is hard to verify.
What seems to have changed is bitcoin’s overall power consumption, which appears to have dropped in the past couple of months. That development would have the effect of lowering the network’s carbon footprint. Two widely cited models that estimate bitcoin’s energy consumption have come to slightly different conclusions. One model, run by Cambridge University, says that annualized energy usage for the blockchain network is down by almost half since mid-May. Another, run by a Dutch data scientist, says annualized energy consumption is up 17 percent over the same timeframe, though the study acknowledges that its estimate of the minimum power required by the network has dropped by 40 percent.
The drop likely reflects the aftereffects of the Chinese Communist Party’s broader crackdown on bitcoin. Earlier this year, the regional government in the country’s Inner Mongolia Province, a part of China known for its cheap coal power, announced it would ban crypto mining starting in April. In mid-May, China’s financial regulators warned banks and other financial institutions not to process cryptocurrency transactions or offer related services. Then, less than two weeks later, the Financial Stability and Development Committee of the State Council offered a more definitive statement, saying it would “crack down on bitcoin mining and trading behavior and resolutely prevent the transfer of individual risks to the society.”
Since then, bitcoin’s hash rate, a proxy for the number of miners working on the blockchain, has plummeted, dropping by almost half.
Despite the drop, bitcoin remains the largest cryptocurrency by market cap, but that doesn’t mean it’s Amazon’s only option. It’s entirely possible that Amazon could accept a lesser-known cryptocurrency or develop its own. Of all companies, Amazon is in a strong position to do so. The company's market cap of $1.87 trillion is more than double the estimates of bitcoin’s total value, giving Amazon significant financial firepower. The company also has around 40 percent market share in e-commerce, giving it a broad base of potential users.
But just because Amazon could make its own digital currency doesn’t mean it would. And the job posting isn’t definitive evidence that it ultimately will do anything with cryptocurrencies.
Amazon is not the only trillion-dollar company to be dipping its toes in the blockchain waters. Both Google and Microsoft employ engineers who focus on blockchain technologies, mostly for their cloud services. Apple, too, is exploring blockchain and alternative methods for payment, including cryptocurrencies, according to a job posting from May.
Yes, the companies may be serious about accepting crypto payments, but it’s more likely that they’re hedging their bets. If crypto payments catch on, Big Tech will be well-positioned to capitalize on the move. One product manager’s salary will barely make a dent in Amazon's earnings, and hiring someone to keep an eye on the space seems like a smart and relatively inexpensive insurance policy.
Update 7:45pm EDT: An Amazon spokesperson contacted Ars, saying, "We’re inspired by the innovation happening in the cryptocurrency space and are exploring what this could look like on Amazon. 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." Regarding other reports that Amazon was focusing on bitcoin, the spokesperson said that "the speculation that has ensued around our specific plans for cryptocurrencies is not true. We remain focused on exploring what this could look like for customers shopping on Amazon."