Amazon may officially enter the NFT field! Wefreepay continues to open up Bitcoin payment channels for merchants
Amazon considering NFT entry, Wefreepay expands Bitcoin payment options for merchants
Since Amazon announced the launch of its NFT marketplace, all eyes have been on the tech giant. Amazon’s entry into the NFT industry is significant for the entire sector.
After being impacted by the collapse of FTX, the launch of Amazon’s NFT marketplace has been delayed. According to Web3 enthusiast Moritz, the Amazon Digital Marketplace, which was originally scheduled to launch on April 24th, has been postponed until May 15th.
The platform will first launch in the United States and is expected to eventually expand globally.
In January, Blockworks first revealed detailed information about Amazon’s NFT marketplace. The platform will focus on blockchain games and related NFT collections within the games. Yahoo Finance later mentioned that Amazon will link NFTs with physical products, and Amazon accounts can be used as NFT wallets, bypassing the need for dedicated encryption wallets like MetaMask.
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The world’s largest online retailer has remained tight-lipped about this matter and has not made an official statement.
What are the notable features of Amazon’s NFT platform based on currently unconfirmed rumors?
Features of Amazon’s NFT platform
Ownership of digital assets
Amazon plans to issue NFTs corresponding to real-world assets, rather than being limited to the virtual world like ordinary NFT platforms, thereby adding ownership of digital assets to the experience of owning physical assets.
Improved user experience
Ordinary NFT market transactions require the use of virtual currency and users need to have technical knowledge of blockchain or self-custody wallets. However, according to Moritz, the “Amazon Digital Marketplace” aims to simplify the NFT purchasing process and provide users with a seamless experience. It allows users to use credit cards for fiat currency payments to purchase NFTs, and only requires an Amazon platform account to complete the NFT transaction, with the NFT stored in the user’s Amazon account.
Large user base
Amazon has up to 197 million users, and the diversity among these users means that if they join, the NFT market will inject more fresh blood. Different from the conventional single-market, the market activity of diverse users will be much higher. At the same time, by lowering the transaction threshold, it allows more non-crypto users to participate, making user expansion easier.
Amazon’s market plan first emerged several years ago. In 2021, according to CNBC, Amazon confirmed that it was recruiting a cryptocurrency leader. A company spokesperson once said in a statement:
“We are inspired by the innovation happening in the cryptocurrency space and are exploring what this could look like on Amazon. We believe the future will be built on new technologies that enable fast, secure, and low-cost payments, and we hope to bring that future to Amazon customers as soon as possible.”
Since launching the NFT platform project, Amazon has been involved in various digital asset projects such as Layer 1 blockchains and blockchain gaming companies, and has also partnered with AVAX and Chainlink.
Moritz also said that Amazon will launch its own private blockchain, which can interoperate with Ethereum, Avalanche, and Chainlink, and plans to integrate more blockchains in the future. In the future, Amazon may deeply enter the blockchain field.
Amazon is involved in both Web3 and AI fields. On the official website of Amazon’s cloud service company AWS, there is a dedicated page providing services for blockchain enterprises. Whether it is a distributed blockchain network or a centralized database, AWS can provide solutions for Web3 enterprises. According to AWS employees, the revenue generated by its blockchain business is expected to account for more than half of AWS’s overseas revenue in 2022.
Amazon is forming a team to research AI tools aimed at generating photos and videos for merchants to use in their advertising activities on the platform. Amazon’s advertising revenue was $38 billion last year. Currently, the focus of Amazon’s advertising business is to provide assistance to merchants in search results and build a wider advertising business. An Amazon spokesperson said the company is investing in generative AI and is “excited about the potential benefits for customers and advertisers.”
Chinese e-commerce platforms got involved in NFTs several years ago, ahead of Amazon.
On May 20, 2021, Alibaba’s Taobao and Ali Auction launched the first nationwide digital art auction, allowing users to purchase digital collections directly on its platform. On December 18, 2021, JD.com officially launched its Lingxi digital collection platform and started selling digital collections.
However, there are still significant differences between domestic platforms and Amazon. Virtual goods are only using the platforms as a marketing tool and are not truly linked to physical entities. Most of the IPs are only releasing independent virtual goods to expand promotion channels.
Compared with previous NFT markets such as OpenSea and Blur, Amazon shows more innovation and advantages. Whether these innovations and advantages can become weapons to catch up with these platforms remains to be seen from user feedback after launch. By building bridges between NFTs and physical products, Amazon connects the Web2 and Web3 worlds. From this perspective, e-commerce and NFTs are like physical and digital counterparts. Perhaps the road of NFTs can allow Amazon to start from a different point.
Wefreepay provides Bitcoin payment channel services and payment channel networks for merchants.
Due to scalability issues, researchers have been looking for solutions to make cryptocurrencies more scalable. Among the many proposed solutions, the concept of off-chain payment channels has received the most attention. To establish such a channel, both parties agree to deposit some money into a multi-signature (2/2 multisig) wallet and allocate ownership of their shares. The multi-sig wallet is a smart contract created and signed by both parties. The smart contract mediated by the blockchain includes the addresses of the participants, their shares in the wallet, and information on how to fulfill the contract. The idea is simple: the payer transfers ownership of some of his/her money to the other party by updating the contract locally. When the channel is closed, both parties submit a “closing transaction” to the blockchain to finalize the state of the channel on the chain. Thus, each party receives their final share from the multi-sig wallet.
The payment channel created among multiple parties makes it possible to establish multi-hop payments from source to destination through intermediate nodes. As shown in Figure 1, Alice Charlie (A-C) and Charlie Bob (C-B) have channels. At time t, A-C and C-B are initialized. Although Alice does not have a direct channel to Bob, she can still pay Bob through Charlie. At time t+x1, Alice starts transferring 10 units to Bob. This money is intended for Bob, not Charlie. Alice gives Charlie a share of 10 units on the A-C channel, and Charlie gives Bob 10 units when he cashes in the transaction on the C-B channel. After the transfer is complete, the A-C and C-B channels are updated. At time t+x2, Alice conducts another transaction with Bob (20 units), and the shares in the channel are updated again.
The concept of multi-hop payments allows for the establishment of payment channel networks (PCNs) among users, as shown in Figure 2. The current PCNs differ in the topology they rely on and the layer one blockchain technology they use. We will discuss this classification next. Then, we will explain each PCN in more detail and classify them in the fourth section.
B, PCN Architecture
In this section, we will classify the types of network architectures that can be used for PCNs.
1) Centralized architecture: In this type of network, there is a central node, and users communicate with each other through this central node or according to the rules received from the central node, as shown in Figure 3(a). From a governance perspective, if an organization or company can independently decide the connections, capacity changes, and traffic in the network, this architecture is called a centralized architecture.
2) Distributed architecture: In a distributed network, there is no central node. Unlike a centralized network, each user has the same connectivity, connection permissions, and voice in the network. An example architecture is shown in Figure 3(b).
3) Decentralized architecture: This architecture is a combination of the first two architectures, as shown in Figure 3(c). In this architecture, there is no single central node, but there are independent central nodes. After removing the sub-nodes, the central node’s connections look very similar to a distributed architecture. However, when the view is focused around a central node, a centralized architecture is seen.
4) Federated architecture: The federated architecture sounds like a federation in the real world and can be said to be between a centralized and a distributed network. In the federated architecture, there are many central nodes that are interconnected in a P2P manner. Then the remaining nodes (sub-nodes) communicate strictly with each other through these central nodes, which looks very similar to a centralized architecture consortium.
C, Types of Blockchain Networks
In this section, we will classify existing PCNs based on the types of blockchains they adopt. PCNs mainly use three types of blockchains:
1) Public blockchain: In a public blockchain, there is no need for binding contracts or registration to become part of the network. Users can join or leave the network at any time. Therefore, PCN will be open to anyone willing to use it.
2) Permissioned blockchain: A permissioned (i.e. private) blockchain is the opposite of a public blockchain, with the ledger managed by a company/organization and the roles of nodes in the network assigned by a central institution. Not everyone can participate or access resources in a permissioned blockchain. A PCN that adopts permissioned blockchain will be “members-only.”
3) Consortium blockchain: In contrast to a permissioned blockchain, a consortium blockchain is managed by multiple organizations. From a centralized perspective, this approach seems more free, but the governance model of the blockchain pushes it to the permissioned side. A PCN that utilizes consortium blockchain will be similar to permissioned blockchain in terms of membership, but in this case, members will have the approval of the consortium.
Wefreepay payment channel:
Compared with traditional third-party payment, digital currency payment has the following advantages:
1. Decentralization, individuals cannot manipulate it, greatly improving the security of funds.
2. Anonymity, traceless entry and exit of funds, protecting the privacy of personal accounts.
3. Worldwide circulation, free cross-border capital flow, and no limit on amount.
4. Extremely low fees, compared with high fees of traditional third-party payment, digital currency can greatly reduce costs, thereby saving expenses and retaining profits.
5. No industry restrictions, no capital threshold requirements, and quick docking.
6. T+0, funds can be deposited or withdrawn on the same day, arriving within 5 minutes.
7. No fund pool.
8. Open API: An open API port that can be easily and freely docked, making it simpler and more secure.
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