While rumors about Amazon’s foray into crypto territory have been swirling around in the past, nothing concrete has come out of all the talk until a Proof-of-Work (PoW) patent was granted by the U.S. Patent and Trademark Office (USPTO) to the online retail company early this year.
This well may be a sign of things to come. With the close association of such a system with blockchain technology and cryptocurrency, Amazon might finally take the leap — issue its own cryptocurrency, a move that is deemed inevitable says Binance CEO, Changpeng Zhao. “For any internet (non-physical) based business, I don’t understand why anyone would not accept crypto for payments,” Zhao said in an interview with Cointelegraph.
Apart from the patent, other developments at Amazon seem to support Zhao’s prediction. Amazon consumers can now make Bitcoin payments via a Lightning-enabled wallet. While there is no direct merchant integration yet (crypto payment processing will be handled by a third party, in Amazon’s case, processing will be handled by Moon), it is a promising start.
It is in blockchain tech, however, that the e-commerce giant shows more evident interest. Its cloud computing division, Amazon Web Services, for example, just launched a managed blockchain service for its customers. This service will eventually support Ethereum, an integration that the division intends to be available before 2019 ends.
With the patent, Amazon has full control over specific ways of building a PoW cryptographic system. This gives the tech company two major benefits: First, Merkle trees can be generated as a solution to a PoW problem or challenge. This way, data transfer between peer-to-peer computers can be confirmed and blocks will be close to impossible to falsify. Second, the PoW protects Amazon from Denial-of-Service (Dos) attack or a much deadlier Distributed-Denial-of-Service (DDoS) attack.
The concept of PoW already existed way before the Bitcoin came to be but it was Bitcoin creator Satoshi Nakamoto who showed the world how to use the cryptographic system to its full potential. Basically, PoW is a complex algorithm that works like a verifier of sorts. By solving problems generated by the PoW system, computers can verify that transactions are legitimate and can be trusted.
One thing a PoW system can do is to block a DoS attack. This attack intends to shut down networks, usually high profile sites, through flooding services or crashing services. When successful, legitimate users cannot use the services of said networks hence the term Denial-of-Service.
One DoS attack can already be deadly for a machine or a network. This is why a DDoS attack is even worse. DDoS or Distributed-Denial-of-Service is a unified attack of a single machine or network by multiple systems from different locations.
As Amazon flexes its blockchain muscles, it also understands the threat of double spending, fraud, and other external threats such as DoS and DDoS attacks. With a patented PoW cryptographic system locked in, not only does Amazon provide itself viable protection, but it also opens doors for a cryptocurrency future.
And that is something to look forward to.
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