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Tech-Averse Warren Buffett’s Company Wolfs $900 Million in AMZN Stock

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By CCN: By the end of Wednesday’s trading, Warren Buffett’s company Berkshire Hathaway had a stake in Amazon’s stock worth $904 million, an SEC disclosure reveals.

To get a sense of scale for how big Amazon.com is, the $900 million stake in Amazon’s stock only puts Berkshire Hathaway in control of 0.1% of the e-commerce giant’s retail empire.

Warren Buffett disclosed the mammoth Amazon stock acquisition to CNBC earlier in the month but didn’t disclose the amount.

The Oracle of Omaha did make sure to let everyone know it wasn’t he who finally put some Amazon stock on Berkshire Hathaway’s books but one of the company’s major asset managers:

“One of the fellows in the office that manage money… bought some Amazon so it will show up in the 13F.”

Amazon Stock Purchase a Value Investment?

Responding to a shareholder question about whether the high-stakes purchase of an innovative technology company is a value investment, Warren Buffett assured attendees at Berkshire Hathaway’s annual shareholding meeting that the two asset managers who made the purchase are value investors:

“It’s interesting that the term ‘value investing’ came up because I can assure you both managers — and one of them bought some Amazon stock in the last quarter — he is a value investor.”

Amazon stock chart

AMZN shares have been on a tear in 2019. | Source: Yahoo Finance

Buffett was referring to Berkshire Hathaway’s Todd Combs and Ted Weschler, two asset managers with $13 billion of Berkshire’s $173 billion portfolio on their books.

He added:

“The two people that, one of whom made the investment in Amazon, they are looking at hundreds of securities. Because they are managing less money in their universe, they are looking for things that they feel they understand what will be developed by that business between now and judgment day.”

Buffett Calls Himself an ‘Idiot for Not Buying’

Buffett stated:

“I’ve been a fan, and I’ve been an idiot for not buying. But I want you to know it’s no personality changes taking place”

Though the legendary value investor has long admired Amazon, he has waited decades – as he famously did with Apple Computer – to invest after its IPO.

Buffett has suggested before that what’s kept him away from Amazon’s stock for so long is the sting of regret he’d feel from buying the company’s shares at such a high price when he absolutely saw its world-changing potential. Last year in an interview with CNBC, Warren Buffett said:

“It’ll probably be tough. I’ve probably got so many psychological problems with the fact that I didn’t do it that it’s very hard to do it.”

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Amazon-Backed Crypto On A Horizon? Tech Giant Files Suspicious Patent

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Amazon Files Proof Of Work Patent


A patent that has begun to circulate, published Tuesday, reveals that Amazon may be looking into crypto-related systems, like Proof of Work and Merkle Trees. The document, filed under the jurisdiction describes a system that has a “first party” complete computational work to gain access to a computing resource. The document’s abstract also mentions hash trees, which are also referred to as Merkle Trees

Sound familiar? Well, that’s because Bitcoin, Ethereum, and other blockchains use a very similar system. Funnily enough, however, the patent did not mention “cryptocurrency”, “blockchain”, or “Bitcoin” at all, and instead described the Proof of Work system in immense detail, specifically touching on how it could be used to mitigate DOS (denial of service) attacks from bad actors. Indeed, Proof of Work was once proposed as a way to ensure emails aren’t spam.

Despite the lack of cryptocurrency or digital asset-related discussion, the patent mentioned SHA-256, which, as you well know, is the hashing algorithm that Bitcoin and related crypto assets use.

Some have interestingly taken this news as a sign that Amazon, which is valued at a cool $940 billion on the open stock market, is joining the cryptocurrency revolution. As Morgan Creek’s Anthony Pomp wrote on Twitter, “there’s not a large company in the world who isn’t going to join the revolution.”

An Amazon representative might confirm, or at least not deny, the hearsay that their firm may get into cryptocurrency or blockchain. According to Decrypt Media, Amazon Web Services General Manager Rahul Pathak told reporters at Consensus that if digital assets are something that “matters to customers”, his firm would try to get a “point of view of it” that makes sense to them. Of course, that statement is very nebulous in and of itself, but at least Pathak didn’t deny the potential of an AmazonCoin or something of a similar nature.

Big Corps Launching Crypto Assets

While it is still unclear whether or not Amazon will launch its own cryptocurrency, other reports indicate that other technology giants have concrete plans in the same vein, making it not out of the realm of possibility that AmazonCoin will become a reality.

As Ethereum World News has reported previously on multiple occasions, Facebook is currently working on securing up to $1 billion in funding from financial services giants, namely Visa and Mastercard, and crypto pundits and funds. Just the other day, Digital Currency Group’s Barry Silbert just divulged he signed an NDA with Facebook for… something. The financing is purportedly for a cryptocurrency and a broader payment network — dubbed “Project Libra.”

The digital asset is purported to be a stablecoin tied to the U.S. dollar and will act as the backbone of the payments system, which is said to be focused on eliminating credit card fees, thus aiding merchants and consumers alike. Interestingly, the cryptocurrency may also become an integral part of an upcoming upgrade to Facebook’s ad system, which may reward users for viewing ads and purchasing goods. This contradicts previous reports stating that Facebook’s project was going to be centered around providing remittances for WhatsApp users in nations like India.

In a similar string of news, Samsung, one of the largest technology firms on Planet Earth, is building an Ethereum-based blockchain. The blockchain, which is still in an “internal experimental” stage, may host its own cryptocurrency, the fittingly named “Samsung Coin.” It isn’t clear what use this asset would hold, but the source suggests that blockchain could be brought to Samsung Pay, the tech giant’s fintech application. After this news propagated, Ledger was revealed to have received a $2.9 million cheque from the South Korean corporation.

Photo by Christian Wiediger on Unsplash

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Amazon Patent Casts Light on Plans to Create Proof-of-Work Blockchain Analog

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Retail behemoth Amazon has received a patent for generating Merkle trees as a solution to the proof-of-work (PoW) algorithm, a document confirmed on May 14.

Amazon, which has taken an increasing interest in blockchain technology in recent times, now appears to be targeting development of a specific variation of the instrument.

Specifically, the patent targets Merkle trees — a data verification tool — to constitute the work required in a PoW setup.

PoW is the algorithm used in bitcoin (BTC) and some other major cryptocurrencies such as litecoin (LTC), dogecoin (DOGE) and monero (XMR).

“This document describes techniques for using the generation of Merkle Trees as a solution to a proof-of-work challenge,” the patent reads.

The exact nature of Amazon’s plans remains unclear. The patent document does not reference specific uses within a cryptocurrency or blockchain, continuing uncertainty over the company’s stance on the wider cryptocurrency phenomenon.

As Cointelegraph reported, rumors Amazon was preparing to take a direct interest in bitcoin, for example, have repeatedly sparked a frenzy within the crypto community, each time culminating in nothing.

At the same time, others consider it only a matter of time before an integration occurs. In February, Changpeng Zhao, CEO of exchange Binance, claimed Amazon would ultimately have no choice but to issue some form of cryptocurrency.

“For any internet (non-physical) based business, I don’t understand why anyone would not accept crypto for payments,” he said.

Late last month, Amazon Web Services publicly launched its enterprise blockchain setup network, based on Ethereum (ETH) and Hyperledger technology.

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Amazon Wins Patent for Proof-of-Work Cryptographic System

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Tech giant Amazon has been granted a patent for various techniques to build a proof-of-work (PoW) cryptographic system similar to those used by blockchains such as bitcoin.

First filed in December 2016 and awarded Tuesday by the U.S. Patent and Trademark Office (USPTO), the patent outlines how Merkle trees can be generated as a solution to a proof-of-work challenge, among other benefits.

A Merkle tree structure allows for verification of data sent between computers, and on peer-to-peer networks such as blockchains is used to ensure blocks are not falsified. The concept dates back to 1979.

PoW, on the other hand, is an algorithm that is used to protect networks by asking a service participant to do “work” – often involving using computer processing power to solve complex mathematical puzzles. The bitcoin blockchain network, for instance, uses a PoW algorithm with the work done by miners.

In this case, Amazon says, the Merkle tree creation is the work demanded by the algorithm.

The patent explains:

“A proof-of-work system where a first party (e.g., a client computer system) may request access to a computing resource. A second party (e.g., a service provider) may determine a challenge that may be provided to the first party. A valid solution to the challenge may be generated and provided for the request to be fulfilled.”

“The challenge may include a message and a seed, such that the seed may be used at least in part to cryptographically derive information that may be used to generate a solution to the challenge. A hash tree [or Merkle tree] may be generated as of generating the solution,” it adds.

PoW could also help prevent denial-of-service (DoS) and distributed denial-of-service (DDoS) attacks that frequently hit computer networks, Amazon says, explaining:

“Requiring a valid proof-of-work may mitigate a DOS or DDOS attack by causing the participants of the DOS or DDOS attack to generate a valid proof-of-work solution, which may require the use of computational resources on the attacking systems and dramatically reduce the rate at which entities participating in the attack may send requests.”

Elsewhere, the patent also mentions “cryptographic key,” “digital signature” and “public signing key,” among other concepts related to blockchain and cryptocurrencies. The patent does not directly discuss blockchains or cryptocurrencies, however.

While a much talked about Amazon cryptocurrency has so far remained elusive, the e-commerce giant has been moving further into the blockchain space. Earlier this month, its cloud computing arm, Amazon Web Services (AWS), launched its Managed Blockchain service for wider use among enterprise clients. The service currently supports open-source framework Hyperledger Fabric, while the support for the ethereum network is still in the works and is expected to be made available later this year.

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Amazon Crypto Patent Ignites Desperate Rumors of Bitcoin Integration

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By CCN: For whatever reason, people believe that Amazon’s acceptance of Bitcoin or lack thereof will be a significant milestone for cryptocurrency. The company has never accepted it, which has given rise to several business models, including Purse.io and Moon’s recent browser extension.

Amazon Finally Seeing the Light for DDoS Prevention

Amazon has reportedly filed for a patent involving cryptographic proof-of-work, the system that underpins Bitcoin and most major cryptocurrencies. Proof-of-work is a concept invented by Adam Back as part of hashcash, primarily as a means to make it very expensive to conduct denial-of-service attacks.

Amazon mentions this in the earlier paragraphs of its patent application:

“Computer networks have evolved to provide sophisticated functionality in a large variety of contexts. Providing such functionality, however, often involves complex systems that malicious entities may try to exploit. One such attack involves denial-of-service attacks, which can be disruptive to computer systems on a network. In a distributed denial-of-service attack, for instance, large numbers of requests are sent to a computer system to attempt to overload the computer system. One way to mitigate against such attacks is to configure a service such that requests to the service incur some sort of expense, thereby providing disincentive to participating in the attack. One such expense involves imposing a condition that a client submitting a request expend more computational resources (e.g., CPU cycles) to cause the request to be fulfilled.”

The revelation of the patent has sparked the usual fervor, although blockchain-related patents from major companies is nothing new. Bank of America and several other traditional financial companies have filed for and own numerous patents. Amazon’s patent has special relevance for certain sectors of the crypto supporter zone, it seems.

No, This Doesn’t Mean Amazon Wants Your Crypto

Nowhere does the patent mention cryptocurrency. The patent is purely for a proof-of-work system, presumably to play a role in Amazon’s web services division, which is one of its biggest money makers. We can speculate on what type of products they may intend to offer as a result, but the fact is we don’t know.

Will Amazon create a radical alternative to CloudFlare, for example?

Proof-of-work has previously been used as a method to verify users and even allow them to pay for things. However, most browsers have banned in-browser mining scripts, as the services which provided them were primarily used by scammers and unsavory webmasters.

Amazon interacts with cryptocurrencies like bitcoin in a number of ways currently. Its marketplace contains numerous crypto-related products, including hardware wallets and even a gumball machine that accepts cryptocurrency.

We must stress that this patent application does nothing to expand Amazon’s crypto presence, although they are apparently integrating Ethereum in their blockchain services package soon.

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Amazon Files Proof-Of-Work Patent Using Cryptography

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Amazon this week filed a US patent for a Proof-of-Work system which uses cryptography to generate Merkle trees. The Bitcoin and Ethereum networks use such ‘hash trees’ to verify the content of large data structures.


Proof-of-Work as a Tool Against DoS Attacks

A Merkle tree is a fundamental component of a blockchain, whereby each non-leaf node is a hash of its respective child nodes. In Amazon’s patent, the generation of a Merkle tree could fulfill a challenge, allowing access to a computing resource. From the abstract:

The challenge may include a message and a seed, such that the seed may be used at least in part to cryptographically derive information that may be used to generate a solution to the challenge.

Thus, the expense of resources in creating a valid solution could deter malicious entities from attempting denial-of-service (DoS) or other attacks.

Proof-of-work Patent

Amazon Continues To Push Crypto Without The Currency

Amazon, in the guise of its Amazon Web Services arm, has been rather active in the blockchain space. It claims to be simply responding to demand from its existing customers. However, thus far it has stopped short of cryptocurrency integration into its core business. From this, we can draw the conclusion that it is prioritizing the demands of corporate customers rather than end users.

Towards the end of last year, it revealed two interoperable blockchain-inspired products, aimed at healthcare, supply chain, and other industries.

The first, Amazon Quantum Ledger Database (QLDB), is:

A fully managed ledger database that provides a transparent, immutable, and cryptographically verifiable transaction log ‎owned by a central trusted authority.

Whilst the other product, the Amazon Managed Blockchain, allows users to set up their own organizational blockchain using open source frameworks. It can also replicate the user’s blockchain activity into the QLDB.

Which Is Better, Bitcoin Or Amazon?

That’s like asking whether cash is better than a pub. They would ideally go very well together… although not if the pub told law enforcement exactly what I’d spent there.

bitcoin price chart BTC

In terms of return on investment, BTC has beaten AMZN stock in 5 of the past 8 years. And of course, given recent BTC form, Amazon will need a miracle for it not to become 6 out of 9.

Which I calculate, means that Bitcoin is exactly twice as good as Amazon.

And you can quote me on that.

Is Amazon working on its own Bitcoin-like currency? Share your thoughts below!


Images via Shutterstock

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