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My Amazon story and why alt-coins like Zilliqa have the potential to disrupt its space.
Statista 2021 released its latest report that they are currently 74 million unique Blockchain.com wallet users worldwide. Of course, not every crypto user has opened a wallet with it. And if figures are to be more precise with an estimation, then statistics from Triple-A would be a better call – with over 300 million users being estimated. This represents just ~4% of the world population, which tells us that we are just about entering into a space where adoption rates will climb higher and faster.
Triple-A estimates about 20,000 businesses accepting crypto as payment and being deployed across various industries like retail, luxury, remittance and gaming as part of the offering of their ecosystems (https://triple-a.io/crypto-ownership/)
For example in luxury, the application of the blockchain can help to weed out counterfeits since each product can be assigned a unique NFT code with a unique value that is worth a certain amount in crypto.
Remitting money to someone else across the globe is over 300 times faster. This is bound to disintermediate financial institutions.
Let’s just put it this way, I felt robbed and cheated of my money by the financial system set up by the banks, so give me this session to fill you in on the details.
I am an author of several books including those in investments.
My books are found on Amazon and while they are relatively new in the market, they are well received. I received my cheque just two weeks ago from Amazon (#AMZN). It took them two weeks to send me the cheque, which is issued from their bank, Wells Fargo. For it to come to me, I had to be taxed 30%, which is 23% more than what I get taxed in my country. They did not give me an option to be taxed here in my country for a book which I wrote in my country.
So of the $220 that I earned selling a number of copies, I received $145 for the hard work put into the publishing effort. Mind you, the $220 already takes into account the huge percentage that Amazon takes in the process!
As my bank is not a participating bank with Amazon, they had to send the cheque back to Amazon / Wells Fargo for clearance, of which middlemen – an agent bank will take a cut of $30 and my own bank another $20. There are also other transaction fees along the way. By the time I receive the money that comes to me, I will only be left with about $60 or less. Which amounts to only 27% of the amount that I put in for so many hours of effort in sharing knowledge with people.
The worst part of it all? It takes them 2 weeks to mail me the cheque, only to get it mailed back to the US again and verified by the bank and various agents, a process that will take another 4 to 6 WEEKS (??!!)
Why should all these fees of different kinds be imposed and borne by the one who works hardest? Well, I can only surmise that this is a very good space for disintermediation and disruption.
The cumbersome, bloated “tech” giant with lots of hubris
Has tech giant Amazon become too big for its own good, refusing to budge and change its practices?
A main question that I asked their support crew was – “Are you able to pay me in cryptocurrency like Bitcoin and Ethereum?” And of course, their answer was a flat no. Was it because they are unwilling to budge?
Only time will tell, because I will be pulling out my books from the platform shortly and placing it across to other platforms that do provide the opportunity for me to be paid properly. The point is simple – cut out the middleman and the ones who have the real value will be paid their worth.
Every one else having rent-seeking behaviour will lose their place.
Amazon belongs to the current definition of the “tech” company era. It came up in the 1990s and is still one of the biggest players in this space. It is very difficult in that sense, to compete with something so large due to the margins. It presses the margins down to make it seem the cheapest and best option to the consumer, but in actual fact, all it has done is to take from the source, the originator of the idea through which capitalism has given the opportunity to create and profit from the idea. And with the economies of scale, now it centralises EVERYTHING to itself and profits from EVERYONE else. In the name of convenience and cost. That was the name of the game in the early 2000s for the companies coming into that space as a tech company.
Now, notice the term “centralise” being used. Because tech companies are being set up to be the “winner takes all”, they have to occupy the space with their set up. It can be a SaaS (software as a service) or a platform that allows customers and providers of goods and services to “meet”. This centralisation is how the magic and money are both made.
From there, the “tech” company seeks out rent-seeking behaviour. Let’s think about a ride hailing company like Uber or Grab. When they raise prices, consumers have no choice but to bear the brunt of the “rising costs of operation” reason for the fare increase.
Crypto and the blockchain are on the way to reverse this. Let’s examine a hypothetical approach.
ENTER ZILLIQA
There are governance tokens that consumers can use for companies starting on a particular blockchain, like say, Zilliqa.
These tokens (gZil for Zilliqa’s case) can be used for voting for the direction of certain features they want to see.
(Watch this video to understand what gZil is -
For a participation of a ride-hailing service or even a supply chain service, consumers holding the governance tokens will be able to vote a fair amount that is paid out to those involved in providing real value to them. In the case of a ride-hailing service, the middlemen taking transactions can be removed to bring fees down. The algorithm that deals with fare-surges during peak periods can be voted down. The commission taken by the company can reduced to pay the driver more or have the consumer be charged lesser.
This smart contract is then written in and upon the end of the ride, the payment comes out from the consumer’s wallet and instantly, all parties involved are paid in #Zilliqa.
The company providing the service will have its balance sheet and annual reports audited accordingly with the blockchain in place, which allows consumers to see the real profits being taken and determine whether it is fair game. Yes, capitalism allows for profit taking. But after a certain point, the sucking up of money compounding with the elite is not the way to go.
Any thoughts?
Yours,
Chief Editor,
BBA Market Perspectives
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