There has been a lot of rumor and speculation circulating in the crypto and mainstream media recently regarding e-commerce giant Amazon moving into the crypto-space by accepting select cryptocurrencies as payment options. While it’s a virtual certainty Amazon will soon start doing that in some manner, Amazon’s crypto aspirations seem much bigger and could positively impact small-business owners in the near future.
To be clear, Amazon is already deep into the cryptocurrency space. Don’t believe me? A quick check of its website proves it.
Amazon is already experimenting with crypto.
Amazon Web Services (AWS) is the company’s global, cloud-based, infrastructure platform online. Thousands of companies pay Amazon billions each year to “rent” access to that network rather than building their own.
Amazon’s AWS is also the network backbone for a broad segment of the existing cryptocurrency universe. The blockchain descriptor page for Amazon shows that AWS currently supports “25 percent of all Ethereum workloads in the world.” Ethereum is the second-largest cryptocurrency by market capitalization directly behind Bitcoin. But Ethereum is more than digital money.
As of this writing, more than 2,400 decentralized applications–Dapps for short–are built on the Ethereum blockchain. These Dapps are kind of like apps on your mobile phone. They’re designed to touch and improve many aspects of life, including data security, insurance, physical property, social media, music, movies, health information, identity, marketplaces, finance, gaming, bill payment, as well as many others.
For instance, you likely know and have heard about non-fungible tokens (NFTs), but what you may not know is that nearly the entire NFT environment from concept-to-commerce runs on the Ethereum blockchain network. That network also has a digital currency called Ether, which has faster payment transactions than Bitcoin, and is moving to a more ecofriendly method of crypto-mining than Bitcoin.
This week Ethereum made several major programming upgrades to its network– known as the “London hard fork”– which will significantly lower transactions fees and make it a deflationary asset. These upgrades further increase the utility and value of Ethereum. Ethereum has a lot going for it, and Amazon AWS is currently the underlying bedrock of the Ethereum ecosystem.
DeFi: The future of small-business banking and finance.
One of the fastest areas of Ethereum growth is something called decentralized finance– DeFi for short. DeFi is an alternative to traditional banking and finance. DeFi is a system where blockchain-based software–smart contracts for short–allows direct peer-to-peer buying, selling, lending, and borrowing without bankers or brokers in the middle taking a piece.
Entrepreneurs and small-business owners around the world are taking advantage of DeFi benefits now. Those benefits include:
- lower transaction fees;
- lower closing and settlement costs;streamlined applications;
- loan approvals in hours, instead of weeks;
- flexible loan terms;ability to collateralize crypto assets;
- access to global funds;no “banking hours” or holidays, because DeFi markets are always open 24/7/365;
- andopportunity to earn higher interest rates on cryptocurrencies you loan.
Getting a DeFi loan for your small business is barely more challenging than placing a dinner order with GrubHub. Right now, the equivalent of $72 billion U.S. is locked into decentralized finance Dapps, and more than 93 percent of all those DeFi Dapps run on Ethereum.