Quick Facts:

Amazon files a Proof of Work (PoW) system patent.

Amazon is not launching it's own crypto.

Online retail giant Amazon has reportedly filed a patent in the United States for a proof of work system that leverages cryptography.

The patent, revealed on May 14, can be found on the United States Patent and Trademark Office website here. The patent was filed all the way back on December 23, 2016, although it has just been made public this past week.

The patent document lists the patent assignee as Amazon Technologies, Inc. in Seattle, Washington. The patent is titled, “Generation of Merkle Trees as Proof-of-Work”.

Here’s how the document sums up the patent:

“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.”

The patent goes on to explain how that ‘challenge’ works:

“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 may be generated as of generating the solution.”

This is essentially just a detailed way to describe an ordinary transaction on a system secured by proof of work. In order for the transaction to take place, one party must ‘prove’ they did the computational ‘work’.

Amazon’s proof-of-work system patent goes into great technical detail about how the proposed system works, including a detailed explanation of Merkle Trees. There are 21 pages in total describing the nuances of Amazon’s proof-of-work system.

How Do Merkle Trees Work?

In cryptography, a Merkle Tree is a tree where each leaf node is labeled with the hash of a data block and every non-leaf node is labeled with a cryptographic hash of the labels relating to its child nodes. It’s a type of ‘hash tree’ designed to allow secure and efficient verification of the content within large data structures.

Today, bitcoin and Ethereum use Merkle Trees on their peer-to-peer networks. Amazon’s patent describes a similar system – although it’s important to note the patent doesn’t discuss blockchain or cryptocurrencies whatsoever.

Amazon Could Be Using the System to Prevent Denial of Service Attacks

Proof-of-work systems pre-date bitcoin by about 15 years. In the 1990s, researchers proposed using proof-of-work systems to prevent email spam. Anyone who wanted to send an email would have to perform a little bit of processing work to send that email. It would not be practical for spammers to send thousands of emails because they would need to perform an enormous amount of work.

Some believe Amazon’s proof-of-work system will work in a similar way.

Amazon could be using the proof-of-work system to prevent denial of service attacks on its network. These attacks involve thousands of computers demanding data from a server simultaneously, causing the server to crash.

A proof-of-work system could mitigate denial of service attacks, forcing users’ CPUs to perform work before accessing a website.

BREAKING: Amazon has filed a patent in the US for a proof-of-work system that leverages cryptography. There’s not a large company in the world who isn’t going to join the revolution. THE VIRUS IS SPREADING 🔥 — Pomp 🌪 (@APompliano) May 16, 2019

Is Amazon Launching Its Own Cryptocurrency?

Amazon’s proof-of-work system patent mentions nothing about cryptocurrency or blockchain technology.

However, that hasn’t stopped some eager crypto users from theorizing that Amazon is preparing to launch its own cryptocurrency – an Amazon Coin, if you will.

This isn’t the first time Amazon has been linked to blockchain in the past month. On April 30, the e-commerce giant announced that its Amazon Web Services would launch a managed blockchain service to all of its users, allowing AWS users to setup their own blockchain networks within their organizations.

Meanwhile, Amazon subsidiary Whole Foods just announced that it was accepting crypto payments at all stores immediately, including payments in BTC, ETH, GUSD, and BCH.

Amazon hasn’t given any indication that they want to break into the cryptocurrency space. However, this latest patent certainly shows that Amazon is interested in the benefits of proof-of-work systems.