New Amazon Coins and Bitcoins Taking Over the World?
If Amazon.com were a country, its revenue would make it about the 80th biggest GDP in the world, and now it has its own currency. Recently, owners of a Kindle Fire got a free deposit of 500 Amazon Coins to get their dual citizenship kick started. Are Amazon Coins a Virtual Currency Like Bitcoin?
Will people ditch the US dollar in favor of the legal tender of the United States of Amazon? No the roll out of Amazon Coins is so for “thousands of Kindle Fire apps, games and in-app items at Amazon.com or on your Kindle Fire” – not books or movies. And while purchased coins never expire, promotional coins received for free or as part of another offer only last for a year. Meanwhile, the average lifespan of an electronic device these days is shorter than Napoleon ducking under a pygmy goat. For now anyway, if you ditch the Fire for an iPad, Amazon gets to keep your coins in its jar.
Unlike Bitcoin, the preferred method of anonymous transactions for drug deals and rare earth magnets frowned upon by the Consumer Product Safety Commission, there’s no open exchange market for Amazon Coins. In fact, Amazon says, “Coins cannot be resold, transferred for value, redeemed for cash or applied to any other account, except to the extent required by law”. Even Second Life Linden Dollars can be exchanged for Bitcoins, and then traded back into cash on one of several Bitcoin exchanges.
Amazon is selling their coins at a discount – 500 coins for $4.80 up to 10,000 coins for $90.00 – and that seems like a good deal. At up to a 10% discount, it’s like avoiding the Internet sales tax that may be implemented in the future if Congress gets its way. Contrast this with Microsoft who also uses a point system on the Xbox Marketplace, but gives only 80 points per dollar. If you’re Microsoft, you give or sell points to buy apps and games, plus increase consumer wallet-share of other products such as Skype calling on which the points can be spent.
It’s All About the App Google and Apple and Microsoft all have their own app distribution systems, and Amazon has their hardware platform Kindle already so why not? Amazon wants to expand its share of the tablet market while pushing e-books, games merchandise, but needs more apps developed, so just like Microsoft’s Xbox Marketplace point system, Amazon Coins serve to incent developers to offer Fire versions and share the revenue, soften the sticker shock of purchases, plus get consumers hooked into other offerings such as the rumored Amazon set-top box. Said one reviewer on Amazon: “I can’t see this coin thing being good AT ALL.
Not only does it hide the true cost of any content or items being sold, but it neglects to protect the balance on the account if an unauthorized user gets hold of any portable device with 1-click enabled”. 1-click, by the way, is the only way to purchase Amazon Coins. There’s no add-to-cart-and-think-about-it option, and the coins are nonrefundable. As far as hiding the true cost, it’s true. 10,000 points is easier to spend than $90.00US, because it’s not real money, right? In that case, I’d like to share my Amazon Wish List with you, because I have a birthday coming up, and it’s just points after all.