Litecoin (LTC)–Amazon is quickly becoming one of the world’s largest employers. At last count in October 2017, the company employed over 500,000 workers across the United States, not including the addition of Whole Foods employees in the most recent acquisition. From their widespread distribution centers, to hired delivery drivers, Amazon has a massive and growing base of personnel that is only going to extend into the future. More pertinently, Amazon has a growing collection of digital contracted workers, whether through sellers on their website, associates in their affiliate program, or remote workers through Mechanical Turk. All of these people share one thing in common: they require a seamless payment structure from Amazon.
Litecoin, in addition to the LitePay payment processor, provides an opportunity for Amazon to improve the efficiency of their digital payment system while also taking a step forward in technological innovation with the improvements of cryptocurrency.
Why Cryptocurrency Benefits Amazon
Amazon is in need of an easy to use, secure, global payment network. In addition, with the growing presence of online work, a fully digital payment platform becomes a paramount feature as the company grows into the looming age of automation and remote production. Mechanical Turk may just be a low-wage paying outlet for menial tasks, but it’s also a forward thinking platform for global employment integration. Workers across the globe fulfill contracts that don’t require the level of expertise or education that serves as a barrier for most forms of employment. Instead, workers are paid based upon their efficiency and ability to quickly triage tasks that provide the most benefit. Likewise, Amazon’s Associate program–a platform that combines affiliate marketing, online product sellers and kindle books publishers–is another vastly growing outlet that could serve as a model for future employment. But more so than the rest, the massive Amazon Cloud Computing space and server renting could herald automation in computing that could create a buy/sell market just like the one currently in existence for traditional product commerce.
All of these outlets would benefit from a uniform payment system that can transcend international borders. Amazon would have to contend with the issue of taxes and other government regulations inherent with paying wages (particularly in the U.S.), but that is not a limitation of the form of payment and could largely be handled pre-currency selection. Litecoin presents a fully digital form of payment that also has added security. In addition, Litecoin is a cryptocurrency with a long history on the market, giving it more credibility as the payment form of choice.
It could also be used as a broader program by Amazon in an attempt to capitalize on the growing cryptocurrency market and consumer base. Payments made to Amazon in Litecoin, through their new cryptopay portal (picture their typical payment tab but instead related to crypto wallets and addresses), could provide the liquidity and capital for distributing to workers. This could create a positive feedback loop for Amazon’s cryptocurrency efforts, as paying workers in LTC and accepting Litecoin provides incentive and a portal to spending the currency (similar to how Amazon provides contracted workers outside of the U.S. the opportunity to redeem their earnings in Amazon gift cards). Rather than having a currency tied solely to Amazon, a la their current gift card program, LTC is a currency that can be spent broadly or cashed out on exchanges, and has the potential for even greater usability if the LitePay debit card becomes a reality.
Some will cry foul to Amazon over the volatility of the currency, but they are only looking at one side of the equation. Yes, paying someone in a cryptocurrency that could lose half of its value in a month, as opposed to the less-volatile fiat currency, could seem disingenuous and risky to the worker. But we are imagining this as a far-reaching solution beyond the borders of Western countries. Inflation-prone currency is a regular way of life for many countries, particularly those of Africa and South America. As Amazon grows into both a global distribution enterprise and source of employment, the need for a uniform currency to link their internal network becomes a rising issue. Litecoin provides workers with a digital payment–which fits with the digital-based work they are producing–that could then be used at their discretion. This goes hand in hand with the creation of portals to exchange for their fiat currency, which are quickly becoming ubiquitous across the globe, or at least accessible through the internet. It also gives these workers the opportunity for appreciation, which could turn a low-wage paying job into a more lucrative offer given the investment opportunity (again, a contentious point for someone who needs the moneyto pay bills now, but a feature that potential workers could find enticing). It also suits the growing gig economy, where workers can tap in and out of Amazon, as they would a ride sharing service like Lyft and Uber, to make cash when it is convenient.
Cryptocurrency is the first fully digital payment system the world has known to this degree, while also offering the most security through blockchain–a completely novel feature to those who have only ever used government issued fiat. Given a quick, basic understanding of cryptocurrency, workers paid in Litecoin have a secure wallet and address (or as many wallets as they wish to generate) that is infinitely portable in any amount and only accessible to them. The benefit of a currency that is deflationary, secure and portable is a feature lost on most Westerners, but immensely valuable in many countries around the globe. If Amazon is looking to become a beacon of international progress, particularly in terms of employment and a progressive working experience, Litecoin is the perfect move for their digital services.
How this Benefits Litecoin
Admittedly, the partnership is significantly beneficial to the growth of Litecoin and recognition of cryptocurrencies as legitimate payment platforms:
Increases the need for LitePay. LitePay development, while looking like a substantial feature of LTC, has stalled indefinitely. With the advent of a global company paying employees in LTC, the need for LitePay and the LitePay debit card becomes essential and could even receive development backing from Amazon pre-launch of their cryptocurrency machinations.
Provides greater liquidity for the LTC market. LTC, and all cryptocurrencies, are stagnate markets built upon the bedrock of exchange speculation. That means few people are actually spending and sending the currencies in exchange for goods and services. It would be as if everyone paid in their government fiat did not use it for groceries, gas and commodities, but instead immediately put it to use on a FOREX marketplace. You can imagine the worldwide economic crisis that would ensue. Litecoin needs an outlet for greater currency movement and to shift the focus away from asset appreciation to legitimate currency usability. Amazon accepting Litecoin on their marketplace would be a large step forward in adoption, but substantial growth could come from people being paid in the currency. This increases the incentive for spending Litecoin and using it as a transacting currency–which cryptos inherently are supposed to achieve–as a way of avoiding the annoyance of cashing out to fiat. The overwhelming majority of people want to spend in the currency they are paid with. If it’s US Dollars, they want to shop in USD. If it’s Litecoin, they would likewise be looking to spend their LTC. The dominos to exponential adoption will start to fall when the incentives for widespread spending are in place. Paying people in Litecoin is as beneficial to accepting Litecoin for payment; a feature more small business owners and employers could look to emulate if searching for ways to help the industry of cryptocurrency.
Giving legitimacy to the currency. The wave of FUD coming from the media and general public as the cryptomarkets enter their third month of price depression is going to be unreal, and difficult for the average investor to weather. Cryptocurrency is in desperate need of outlets to legitimize its existence. There are detractors who point to this process–creating a technology and then finding the need to fill–as evidence to the vacuum of cryptocurrency. But they miss the underlying purpose to the technology. The internet was a thing that people had to find uses for. It became overwhelmingly popular in part because of what the technology accomplished–connecting people across the world in shared digital spaces–but also in the creations that overlaid the technology. Thus far, cryptocurrency has failed in creating the latter; a fact that has been obscured for some time given the obsession over price and profit. As more developers enter the space, and the tools for creation become simpler, the overlying use for crypto will become more evident. Let’s not forget the internet went through a very similar dot.com bubble, where investors flooded money into the space before serious usability had been established.
A Side Note on Charlie Lee
Lee, founder of Litecoin and general figuredhead for the currency, is in the perfect position of any cryptocurrency founder to establish such a partnership with Amazon. Many, many investors were dismayed by Lee selling his entire holding of LTC at the peak of Litecoin valuation last December. However, as we argued, this had the long-term effect of positioning Litecoin and the Litecoin Foundation as a scrupulous currency in an industry of lenient and manipulative practices. Charlie Lee has no financial incentive in Litecoin, which makes him an agreeable candidate for working out a partnership.
As much as we, in the industry of cryptocurrency, would love to see partnerships with Amazon, Uber, Starbucks, etc., we cannot forget the immense risk such a deal would pose to these companies. Much of the general public, particularly those of older generations, see crypto as a scam or technology based in illegal and immoral behavior. By partnering with cryptocurrency, Amazon is tapping into a growing industry that will likely hold a future on the digital stage, but also signaling to the world that they are endorsing, and potentially contributing to, the madness and bubble conditions of crypto. If it all pops and goes to hell, Amazon is the one holding the tab and poor media press. Which is why it makes sense to not only do business with a well-established currency like Litecoin, but also a conscientious founder in Charlie Lee that will be immune to media attacks of ponzi scheme and self-interest. Lee has long been featured on popular shows like CNBC’s Fast Money and has a large presence through social media. He would be the perfect figure to channel the partnership through and help spread knowledge about cryptocurrency while also speaking out against misconceptions. It may be difficult to appreciate the importance of Charlie at this moment in time, but, assuming he retains a position with Litecoin and the industry of crypto, his presence is going to grow even more valuable as the world begins to adopt cryptocurrency for legitimate practices.