<aside> <img src="/icons/light-bulb_gray.svg" alt="/icons/light-bulb_gray.svg" width="40px" /> TL;DR This paper was part of “the Best Narrative Paper” competition at AWS, where it came in first amongst 50+ submissions. The paper highlights how Amazon can be at the forefront of the decentralised web space by creating a token based economy within the AWS ecosystem, that rewards businesses for using AWS.
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In the current landscape of the centralized web, large enterprises like Amazon are at a stalemate with the advent of blockchain and its most popular use case, cryptocurrencies. Although modern day e-commerce and internet thrives in a platform that makes use of conventional currency, there is scope for incorporating cryptocurrency into the Amazon ecosystem. However, this incorporation has to be a strategic one, providing a vantage point for Amazon and its various components to benefit from this movement towards a currency agnostic system.
Along other lines, AWS as an industry leader in cloud services is seemingly unassailable, but other cloud vendorsare always competing for new customers. Therefore, the need and method to incentivize new and current customers to use our cloud services is paramount in ensuring market leadership.
This opportunity, both timely and unique, provides the impetus to combine the above two requirements into a new model for creating value for customers.
The AWS infrastructure is a distributed one, with our infrastructure spanning the entire globe and growing. This distributed network is privatized with respect to our customer's resources. Therefore, there is already a global network of virtually independent parties that use compute resources for their own business needs. The physical infrastructure for a blockchain network use case is already in place, the only component left is a blockchain protocol. This protocol is an agreed upon set of behaviors and processes that will allow each participant node in the network to take part in a mining process along with the exchange of services via a token. This token is intrinsically associated with the network's integrity and each node in the network participates in upholding this integrity for their own needs. Thus, customers are further incentivized to use our cloud services by being given the optional benefit of participating in an implicit blockchain network.
The benefit to our customers would be that they would be the primary shareholders in this network and will have the ecosystem to use this token. This token is used for utility purposes or for other purposes such as a securities token.
The "ZonCoin" can be used to fuel an entire ecosystem for businesses, an ecosystem entrenched in Amazon’s credibility. The businesses can exchange the ZonCoin for services with other businesses or Amazon’s services. Examples of Amazon services are AWS compute credits, subscription to entertainment services, support services etc. An example of B2B services that can be conducted via the ZonCoin is the execution of ‘smart contracts’ between buyers and sellers.
An analogy to understand this would be “PayTM”. PayTM gives cashback as a way to engage their customers and promote longer use of their platform. Now, the PayTM app itself has many options for you to spend your money (buy plane tickets, pay bills, buy essentials etc). Similarly, the ZonCoin will be generated and distributed to the members of the network, who can then choose to use those ZonCoins for their AWS services or use these ZonCoins for buying items that are readily available in the Amazon catalogue (e-Commerce, foods, entertainment, devices, logistical services, etc.)
This infrastructure established through AWS and its integrity will be Amazon's entry way into cryptocurrency. So far, most companies that possess centralised databases of information and transactions are at a stalemate with cryptocurrency. However, with this approach Amazon has a seamless integration into cryptocurrencies by setting up its own token called the "ZonCoin".
Amazon’s long term goal has consistently been to onboard users en masse and engage them further to stretch the customer lifetime. This has been made possible by cross-leveraging market interests across distinct lines of business. For instance, ‘Whole Foods’ was acquired to channel Amazon’s entry into everyday essential products. Amazon’s presence in Foods is sustained by consistent predatory pricing of goods causing an overall loss, the cost of which is counterbalanced by the profits from its cloud platform “AWS”. Therefore, using AWS as the base infrastructure and platform to channel users to using an in house cryptocurrency aligns with the company’s long term strategy of securing customers for the long haul. These implementations are predominantly permission-less.
Large enterprises and conglomerates with comparable infrastructure and influence as compared to Amazon have predominantly gone in the direction of a closed/permissioned blockchain network. This variant implementation of blockchain involves only a trusted group of entities and its use cases are limited to business to business collaboration utilities (Supply Chain Management, Contracts and Legal utilities etc.). These large companies have not ventured into creating their own token for public speculation and use. All the current cryptocurrencies that are listed as having a significant share of the market cap come from the effort of blockchain based startups and open source projects.
So far, Amazon has not proclaimed its interest in blockchain and cryptocurrency as pioneering technologies. From a development front, there is very little global impacting work being carried out. From a business front, only recently (as of April 2019) has Amazon worked with crypto companies to facilitate e-Commerce payments through cryptocurrency.