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Is Decentralization a Threat to Amazon?

Courtesy of ZeroHedge. View original post here.

Amazon is a world dominator and has slowly transformed into a multi-industry overlord since its 1994 inception as a

used book marketplace. CEO Jeff Bezos wields his influence in many areas, and entire US states compete for his company’s

next warehouse location by offering tax credit deals. Even established industry giants fearfully anticipate his next acquisition.

Recently, the company took control of Whole Foods, and the entire retail grocery market suffered prolonged stock value declines.

Amazon is truly a force of centralization, and its leader is a champion of modern capitalism. Recently, however, 

blockchain technology proved that it had the ability to support complicated user networks, digital libraries and business flow on

a decentralized system. Its successes thus far fly in the face of the traditional paradigm, in which Amazon has proven itself time and again.

One question remains: are they scared?

Can Amazon Feel the Heat?

 Realistically, no, Amazon is not currently scared of decentralization. It stands to reason that a company which

demonstrates such a willingness to pivot into new circumstances, could also simply develop their own decentralized solution that 

preserves their vast stake in the status quo. However, assuming they don’t have a blockchain solution ready to release tomorrow, or that

they won’t just acquire competitive companies in the space, decentralization is indeed a threat to the way Amazon currently operates.


 

One of the tenets of Amazon’s business is its AWS service, a storage and hosting solution for those who need to keep their online assets

(like websites, applications, and more) running. Users from around the world log in to AWS servers, which are kept in a central location, to access their data.

Unfortunately, blockchain hosting solutions threaten this model in many ways. They’re better in terms of security, speed, and pricing.

The Power of Decentralization

Decentralized networks are not susceptible to the same attacks that can take down an AWS server.

DDoS attacks target a single source of data and flood it with so many requests that it shuts down, taking every website it hosts along with it.

 Decentralized solutions host the network’s assets on all nodes simultaneously, so affecting one (or many) will make no difference to users.

 Viewers of a website hosted on a decentralized server will also enjoy a faster connection because their computer will be communicating with local nodes rather than a faraway server.

Another large part of Amazon’s business is advertising. Not running ads, but rather selling key user data to companies who use it to target audiences better.

Users of Amazon’s centralized platforms and applications have no choice in the matter – they surrender their data the moment they start using Prime, Amazon.com, or AWS.

Decentralization tears down this notion to its very foundation, and then tears that down too.

 Thanks to encryption standards, blockchain solutions like Streamr naturally protect user identities and therefore give them control over their data.

This is because data is worthless without an identity, demographic, or person to attach it to. Streamr, for example, allows people to share as much or as little of their data as they like.

 Golem is another, allowing remote network nodes to access supercomputer power through the blockchain.

Individuals, companies, and even machines have a system to automatically exchange their live data for cryptocurrency, which is ideal for the IoT (internet of things) industry especially.

This largely removes the high degree of control that Amazon and others exercise over data collection and dissemination.

Companies such as Tesla, who rely on streamed data in their autonomous vehicle systems, will be able to acquire the data necessary from sources other than Amazon.

Demolishing the Old Ways

Amazon’s profits come largely from centralization, and when centralization goes away, so do their profits.

 They make their money from buying vertically and horizontally through industries, and people love them because they can make being a customer more convenient.

What these customers fail to recognize is that they’re giving up a large degree of control for this privilege.

This is the impetus behind the trend of mergers and acquisitions that one may have noticed in the last few decades.

Currently, power and wealth come from the ownership of concentrated user data, but decentralization unlocks this power for everyone individually.

All that’s left is for people to populate platforms like those from Streamr, Golem, Datum and others, and the tables will quickly turn.


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