Walmart is following in Facebook’s footsteps by filing a patent for their own cryptocurrency. This isn’t surprising to most crypto-enthusiasts, we are expecting FAANG (Facebook, Apple, Amazon, Netflix, and Google) to all come out with their own cryptocurrency, eventually. After this, other businesses will begin to follow the trail paved by these techno-giants. It’s difficult to see how this all plays out. How many cryptocurrencies can there possibly be? Theoretically, you could have a crypto for every business and have it all managed by a single, intelligent wallet.
Potential Benefits and Use-Cases
When you shop at Walmart, your wallet will detect that you’re shopping at one of their stores. As you walk out with a curved 4K flat screen TV, the wallet will automatically deduct the proper amount of credits.
You could think of it as a hybrid between a gift card and a rewards system. Walmart will most likely incentivize people to load up on their crypto by giving them a discounted price. For example, $1 USD could get you $1.05 at Walmart if you buy their currency ahead of time. You will also have the option to convert on the fly. So, if you buy that 4K TV, and don’t have any Walmart tokens, your credit card will automatically be processed and transfer your USD to Walmart tokens at a 1:1 ratio.
There’s a lot you can do with your own cryptocurrency. Imagine you have 100 Walmart tokens in your wallet. These tokens could be time-oriented so they have more value during less busy times. This would decrease congestion in the store and give the consumer more purchasing power.
Since all of your purchases would be logged in Walmart’s blockchain, they would be able to accurately predict what your next purchases would be. They could then stock the shelves accordingly and discount these items, making a sale more likely.
Death of a Middleman
There’s a lot that you can do with blockchain technology to benefit both the consumer and business. This seems to be what happens when you remove the middleman (in this case, payment processors). The processors typically charge a 2% to 3% credit card processing fee. Walmart is probably an exception due to the amount of revenue they bring in. They probably pay in the 1% to 2% range. These fees are usually passed onto the consumer.
Walmart’s revenue in 2019 was around $514 billion. Let’s make a conservative guess and say they’re being charged 1%, that’s $5 billion bucks in one year. Walmart is looking to bring that down to zero, and most other businesses are too. Fortunately, that is possible today, but we will see a lot of push-back from the payment processors.
Interestingly, Walmart already tried to circumvent this by becoming their own bank. If they’re successful this time around, it could be the first of many dominoes to fall.
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