Obi Nwosu is the CEO and co-founder of Coinfloor, the UK's longest-running Bitcoin exchange. He has over 20 years’ experience building online marketplaces and bringing virtual currencies to tens of millions of people. Obi writes The Road to Bitcoin Hegemony, a weekly recap of some of the most impactful developments in Bitcoin.
If we should never believe anything until it has been officially denied, then get ready to do your Christmas shopping in bitcoin.
Last week Amazon denied claims from an ‘insider’ that the company will accept bitcoin payments by the end of this year, and that it has been working on integrating cryptocurrency payments since 2019. Following Amazon’s denial, eagle-eyed observers spotted that the e-tail behemoth recently published a job advertisement for a cryptocurrency and blockchain lead, moving the rumor mill into overdrive.
As I wrote last week, it’s the duty of every bitcoiner to ask “what if?”. In that spirit, let’s examine the effect of just one major international online retailer — whether Amazon, Alibaba or any of the others — adopting Bitcoin.
First and most importantly, it would take the old argument that Bitcoin cannot scale to support day-to-day purchases and blow it out of the water. Although it has been possible to use bitcoin as a medium of exchange from the very beginning, it’s only since the development of layer two infrastructure like the Lightning Network in the last year that such transactions have been practical for mass retail.
So forget the question of when you’ll be able to buy a newspaper or a coffee with bitcoin: if Amazon or its ilk adopts, the list of items would instantly stretch to 12 million or more. And that would have an incalculable effect upon the retail industry. Overnight, every business from Kmart to corner shops would be compelled to follow in Amazon’s footsteps or risk irrelevance — just as they have for the last quarter of a century.
Secondly, retail adoption would represent another key milestone of the mind for existing and new bitcoiners. It’s not just the utility of buying with bitcoin itself that is so exciting, but the fact it will enable people to live increasingly “off grid” from the existing financial system. When people can freely choose not only how they save but how they spend, fiat money will slowly yet inevitably dwindle in importance.
Potential converts, meanwhile, will have even more impetus to get onboard. Bitcoin has been waiting for its Windows 95 moment, the event that brings it to the masses; adoption by a major retailer would certainly provide it.
Finally, widespread use of Bitcoin for online payments would banish — hopefully forever — the arguments that Bitcoin can only ever be used for speculation. Again, we already know that this is a flawed argument, but a persistent one among Bitcoin’s opponents in the legacy financial industry. (After all, it is difficult to get people to understand something when their salary depends on them not understanding it.)
When thousands or millions of people are buying goods and services with bitcoin via an e-tail conglomerate, it will be an instant corrective to the detractors. Bitcoiners will no longer need to counter arguments with theory, no matter how sound, that many are too impatient, entrenched, or stubborn to understand. Bitcoin will already be doing all the talking at the (virtual) tills.
Whether or not Amazon is truly planning to adopt Bitcoin (as its search for crypto specialists strongly suggests), what is clear from the market response is that there is significant demand for this outcome — and this will not go unnoticed. As Jeff Bezos reaches to touch the stars with Blue Origin, this single rumour has sent a rocket into the boardrooms of every e-commerce multinational in the world. Adding support for Bitcoin payments has just shot up on their list of priorities.