In 2006, Amazon (NASDAQ:AMZN) launched a side project with very little ballyhoo. Today that business unit, Amazon Web Services (AWS), is three times the size of its closest competitor.
When asked about plans for adding blockchain technology to the platform in November 2017, AWS CEO Andy Jassy responded that the company had no immediate plans to offer any blockchain-based services.
While AWS was “interested in the ways blockchain could benefit their customers,” he stated the technology had limited uses “beyond the distributed ledger.”
AWS “doesn’t build technology because we think it is cool,” he quipped.
Yet less than a week into December, AWS announced a partnership with R3, a blockchain research and development company that works with more than 70 of the world’s biggest financial institutions.
Since then, AWS has formally launched the AWS Blockchain Partners Portal, a blockchain-as-a-service platform. The AWS portal integrates blockchain applications developed by partners into the AWS ecosystem.
According to the AWS website:
“AWS provides the broadest and deepest capabilities and the largest global infrastructure for building end-to-end blockchain platforms, cost efficiently and at scale.”
Parters include Sawtooth, a one click solution for developing and running apps on distributed ledgers; PokitDok, which focuses on healthcare solutions; Samsung’s Nexledger blockchain; and Quorum’s Etherum-based distributed ledger protocol for the financial services industry. Coinbase, Deloitte, and many others have also joined.
Healthcare disruption may be on the horizon
AWS is particularly interested in forming blockchain partnerships in the fields of healthcare, life sciences, financial services, supply chain management, security, and compliance.
It may be no coincidence that parent company Amazon is in the process of forming a new entity with partners JPMorgan Chase and Berkshire Hathaway. Their goal is to lower health care costs for their employees. With blockchain technology and ample cash, its conceivable that the alliance could change how healthcare works across the country.
While companies like Eastman Kodak (KODK), Long Blockchain (LBCC), and Marathon Patent Group (MARA) have made their pivots into the blockchain business as publicity-filled as possible in an effort to rescue falling stock prices, AWS managed to build out a blockchain ecosystem quietly, and launched with a whisper.
Will Amazon Launch a Cryptocurrency?
Around the same time as their blockchain denial, rumors were also flying around that Amazon had purchased $450 million worth of cryptocurrency related hardware from a company called Digital Power Corporation (DPW). DPW immediately rose 41%…before squashing the rumors with an official statement, causing them to close the day at -24%.
Nevertheless, the rumors of an impending launch for Amazon’s own cryptocurrency haven’t gone away.
A recent survey of Amazon customers indicated that over half would be interested in using an Amazon cryptocurrency, and there’s speculation that they’ll announce a crypto-strategy sometime this year.
45% of Amazon Prime users even say they’re open to using Amazon as their primary bank account, and you can be sure the company is making a note of that.
A cryptocurrency play could make sense, especially since Amazon is no stranger to having their own currency.
“Amazon Coin” has existed since 2013. It’s not a cryptocurrency, it’s simply a token system that can only be used to purchase apps on their store, much like a gift card. Amazon Coins were merely a way to encourage customers to purchase more paid apps, but it’s clearly an idea they’ve been playing around with for a while.
The rumors have been bolstered by the fact that Amazon registered three crypto-based domain names in November 2017, amazonethereum.com, amazoncryptocurrency.com, and amazoncryptocurrencies.com.
It’s possible that Amazon registered these domains simply to protect its brand. Or there could be other plans afoot. Some speculate that Amazon might be planning to release their own cryptocurrency solution, built upon a private Amazon blockchain, and integrated with a cryptocurrency exchange.
This is conjecture of course. But if a company could make cryptocurrencies mainstream, and used by everyday consumers rather than speculators, it’s Amazon.
We’ll wait to see what happens.
In the meantime…
As relative strength investors, we don’t invest in what might be. We look at the facts, at what is happening in the market today:
Even though Amazon has taken a beating from President Trump and Wall Street, a long-term upward trend remains. Today AMZN stock remains #4 by RS in our universe of blockchain-related companies.
Find out more about blockchain-related investments and Rowe Wealth Management’s Blockchain Boom model. Click the button below to schedule a consultation, or contact us through this site.
Get Our FREE Guide
How to Find the Best Advisor for You
Learn how to choose an advisor that has your best interests in mind. You'll also be subscribed to ADAPT, Avalon’s free newsletter with updates on our strongest performing investment models and market insights from a responsible money management perspective.