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Could Amazon's New Virtual Currency Rival Bitcoin?

J.P. Hicks | Blog Tips

Last week Amazon announced a new way for customers to buy and sell goods on its massive online retail platform: a virtual currency called Amazon Coins.
Coming in May, Amazon Coins is a new virtual currency for purchasing apps, games, and in-app items on Kindle Fire.

Amazon Coins is an easy way for Kindle Fire customers to spend money on developers’ apps in the Amazon Appstore, offering app and game developers another substantial opportunity to drive traffic, downloads and increase monetization even further.

Amazon will give customers tens of millions of dollars’ worth of Amazon Coins to use on developers’ apps in the Amazon Appstore—apps and games must be submitted and approved by April 25 to be ready when Amazon Coins arrive in customers’ accounts.

Amazon calls the Coins an important step to create the "most complete end-to-end ecosystem for building, monetizing and marketing their apps and games."

http://www.blogtips.com/2013/02/amazon-coins-virtual-currenc...

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Clearly you read some of my

Clearly you read some of my point incorrectly. I did not say value outside of "dollars" I said outside of currency. I'm not sure why you think it would make it special by being valued in dollars, yen, etc. They are all fiat currencies based on belief and not based on anything tangible. They do not have value out of being a currency. In other words, there is no other use for them except for exchange. Gold and Silver and thousands of industrial uses that make it very valuable outside of being a currency.

Secondly, I understand people are using bitcoin right now. But just like all things, new items come around to challenge products. If a better product comes along, bitcoins will be worthless as other switch to the other product.

Lastly, law makers condemning something that it used to break the law isn't exactly the bad story I was referring it. What I alluded too was a story such as bitcoins stolen, or erased, etc.

Again, I do not doubt bitcoin will have it's run, but I suspect it will fade away. Gold and Silver have been money for 5000 years and it's value won't collapse if people decide to use something else.

Commerce with all nations, alliance with none, should be our motto. - T. Jefferson rЭVO˩ution

"Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.” - BASTIAT

Hmm

Well, I certainly agree with you that Bitcoin is not the same as gold. Yes, gold is probably more durable as a store of value.

However, what I think you fail to understand is that neither I nor most other proponents of Bitcoin advise ditching gold/silver for Bitcoin. Rather, we advise using gold/silver for what they are best for, which is storing value, and use bitcoins for what they are best for which is exchanging value. People can use both. A big misconception is that Bitcoin is meant to be superior to everything on earth. That's not the goal at all. It has its own unique strengths.

As for Bitcoin only having "a run" and not being around hundreds or thousands of years from now that's possible and perfectly fine too. I don't think the dollar will be around much longer either, yet it has had a long run, which continues to this day. Are you saying you don't use dollars at all? Right now bitcoins can't be beat for what they are good at. That will probably continue for quite a while.

But you see, gold, can do

But you see, gold, can do then job of bitcoin and more. Gold very easily and effectively exchanges value and can divided and subdivided to accommodate any size purchase from everything from a stick of gum to a leer jet. It would be just as easy and much more dependable to simply has stored gold accounts for long distance trade. Then wealth could be retained and exchanged with a few mere clicks if need be. Bitcoins can clearly be beat, by a commodity money that actually have a value in and of themselves. Whether gold/silver/water/oil, etc.

Commerce with all nations, alliance with none, should be our motto. - T. Jefferson rЭVO˩ution

"Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.” - BASTIAT

Bitcoin's threat to central control turns brains into porridge

> There have been stories of Senator Charles Schumer condemning Bitcoin because it makes the drug site Silk Road possible.

lol .. yeh ..

and if i wanted to ban cars i could say pedophiles use cars to pick up children.

This question ...

... would only be posed by someone who doesn't understand Bitcoins. Regardless, the answer is flatly - no. Not at all; apples and oranges.

Digital fiat currency

Isn't worth the cost of the paper it isn't printed on.

If you let your 'money' be swallowed up by the 'cloud' you will rue that day.

When the people no longer have faith in 'paper cash', and that day is soon coming, they will, as always, make haste to gold and silver.

If we get EMP or other catastrophe that sends us back to the communications stone age, ONLY physical coins will be used as 'cash'.

In fact there are many other triggers that could ignite the 'flight to value' that comes when paper is rejected for general transactions.

Not saying that an entrepreneurial person can't make a fortune in fiats then convert it to coin, commodities or land before the next flight to value tho...in fact I wish I was one of those geniuses!

Amazon coins are not a currency

They aren't fungible, aren't transferable, aren't exchangeable, don't float. They aren't a currency.

They are a dollar pegged gift cards.

This misses the point of

This misses the point of bitcoin completely. Unlike bitcoin this is centralized and controlled exclusively by Amazon. There is nothing to keep Amazon away from runaway inflation, and it automatically converts to FRNs for developers...no, this is worthless, might as well use FRNs to begin with.

Michael Nystrom's picture

Interesting info Jefferson

There is a trend towards non-FRN currencies, which is definitely worth keeping an eye on. Very interesting development. Thanks for posting Jefferson.

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Michael

Please note Amazon's new virtual coins and other things like it are not technically currencies. The definition of currency:

The fact or quality of being generally accepted or in use.

It's unlikely Amazon's coins will ever become so widely accepted that you can go into any store or any marketplace and exchange them for goods and services, like you can with dollars or other traditional currencies.

The reason why is because they won't hold fairly consistent and widespread transferable value. The reason you can do this with dollars is dollars hold fairly consistent and widespread transferable value. Bitcoin doesn't have this yet, but in the future it may. The reason Bitcoin can gain that facet and other virtual currencies probably won't is because others are centrally controlled, but unlike being controlled by a central bank, which has the blessing and backing of government, they are controlled by private entities. You'll never get enough trust in valuing such a centralized non-government set up (what's to stop them counterfeiting/inflating?). Bitcoin, because it's decentralized, though, is different.

I will never support Amazon

or their "currency" in light of their anti gun pro homosexual agenda. Why anyone with any integrity would is beyond me. I guess some peoples souls can be sold on the cheap.

Jefferson's picture

I'm

still a little conflicted on the Amazon "Gun Buy Back" donation. I have no way of verifying that they indeed did do that. You would think that if they were TRULY committed to reducing guns on the street, they wouldn't be selling every gun accessory known to God or man on their website, including 100 round magazines. (now sold out) They probably rival any online retailer as far as gun stuff goes.

I agree

..their site is fantastic for helping me to find the best price around on almost any gun accesory I can think of.

I'd rather have a bottle in front o' me than a frontal lobotomy
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It is a legitimate currency,

It is a legitimate currency, I don't have a problem with it, but it's not the same kind of technology as bitcoin. For instance bitcoin allows for anonymous transactions, this won't, and this requires you to trust that amazon.com won't inflate their currency beyond what has actually been purchased.

I'm sure the exchanges will quickly facilitate it where you can buy amazon coins for bitcoins and the reverse too.

I'm making my own too

It's called "Methane Money" and I make it myself.

If anyone wants it.. just send a sealable mason jar to my house and I'll hook you all up.

Patriot Cell #345,168
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Jefferson's picture

Sign

me up for some of that!

I'm still trying to get my head around this "bitcoin" thing. What happens when the power goes out? Seems like the oldest store of wealth is still the way to go. I don't care much for the "cashless society" direction we are headed.

To answer your question about power going out..

nothing happens, unless power goes out globally. When power is back you can use Bitcoin again. In fact you can receive bitcoins without power, and with a smart phone and 3g you don't really need power either.

If however power goes out globally you'll have way bigger problems than little ol' Bitcoin /rolleyes.

Jefferson's picture

True

There is a certain privacy aspect of bitcoin that seems appealing from what little I know about them. IDK if anything is really private anymore with the NSA.
I saw an article a while back about people buying drugs online with their bitcoins and I thought that was kind of cool. Here it is.
http://www.forbes.com/sites/andygreenberg/2012/08/06/black-m...

Cashless society equals less control

in my mind and potential for Liberty to be to be infringed.

Patriot Cell #345,168
I don't respond to emails or pm's.
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Those who make peaceful revolution impossible will make violent revolution, inevitable.

What happens when the power goes out and your card doesn't work?

What happens when the power goes out and your credit card doesn't work?

Much as I enjoy the sound of clinking coins, I never use cash these days. And, behold, while at the store the other day, the power went out thanks to a snow-covered falling branch. ZAP! That was the end of my shopping experience. Left my basket of goodies on the conveyor belt and split.

So it is with any electronic money. Problem with bitcoin is that it is being subjected to strange manipulations and speculation. The relative value of the bitcoin to a dollar as wildly swung between what, $11 and $30, currently settled at $14, last I heard.

Proponents claim it is a finite resource that is infinitely divisible: That makes about as much sense as Steny Hoyer saying "We don't have a spending problem, we have a paying for problem."

Bottom line: Any commodity is subject to machinations of the gamers, and bitcoin is not exempt from this. Still, its bound to be better than Amazon's monopolistic corporate scheme, which probably backs its "coin" with "faith of the shareholders."

"Cowards & idiots can come along for the ride but they gotta sit in the back seat!"

"What happens when the power goes out and your credit card

doesn't work?" I pull out my emergency cash or write a check but you proved his point.. There is still a danger there either way which you can't overlook if you're honest.

"Problem with bitcoin is that it is being subjected to strange manipulations and speculation. The relative value of the bitcoin to a dollar as wildly swung between what, $11 and $30, currently settled at $14, last I heard."

True but there are more issues with it.

No intrinsic value. Gold and silver have other uses that make it more valuable and reliable. They're used in thousands of applications. unless we go back to the stone age, that's going to be the case for sometime to come and even IF we did.. it still would have ornamental value and could be formed into other tangible things and useful things.

Patriot Cell #345,168
I don't respond to emails or pm's.
http://www.youtube.com/watch?NR=1&feature=endscreen&v=qo8CmO...
Those who make peaceful revolution impossible will make violent revolution, inevitable.

Let's go back to the stone age, like on the isle of Yap!

Let's go back to the stone age, like on the isle of Yap! Those giant stone coins are worth a dozen canoes or three wives, showing how much energy is needed to hew one from solid rock.

Oddly enough, bitcoin proponents claim their currency's value is based on labor or energy. I still don't know what it means to mine a bitcoin, but a Facebook chum celebrated loudly when he'd mined his first, at an electrical cost of four times the bitcoin trading value. But that was when it was worth a few dollars.

He cheered when the price spiked to $30. Been dead silent since then -- just like a colleague who bought 3,000 shares of Facebook @ $37 on day one of the IPO.

"Cowards & idiots can come along for the ride but they gotta sit in the back seat!"

Hell I'm all for going back.. I'd be thrilled

to ride a horse for transportation.. Have no roads.. no taxes.. no laws other than Natural laws and so on and so on.

"Oddly enough, bitcoin proponents claim their currency's value is based on labor or energy. I still don't know what it means to mine a bitcoin, but a Facebook chum celebrated loudly when he'd mined his first, at an electrical cost of four times the bitcoin trading value. But that was when it was worth a few dollars."

Yeah, it's based on energy and "time" that the computer uses to do arbitrary mathematical tasks. Bogus logic really.

It's fiat-like in the sens that it's made out of thin air arbitrarily. It's just not mandated by the government and not set up by the government as far as I know anyway.

If however, they bought something substantial, sayyyy gold or silver to back the coins up with, I might be on board. :)

Patriot Cell #345,168
I don't respond to emails or pm's.
http://www.youtube.com/watch?NR=1&feature=endscreen&v=qo8CmO...
Those who make peaceful revolution impossible will make violent revolution, inevitable.