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Thread: Amazon Coins: a virtual currency for Kindle Fire

  1. #1

    Amazon Coins: a virtual currency for Kindle Fire
    A new breed of virtual currencies are starting to emerge —

    and some of the giants of the web industry such as Inc. AMZN +4.16% are edging into the market.

    Gresham’s law famously stated that bad money would drive out the good. In the 21st century, it is now possible the law might be turned on it head. Good money might drive out the bad. If so, that matters to investors — for the simple reason that investing in the right currency makes a lot more difference to the kind of returns you can expect than what you actually put your money into.

    But Gresham’s law applied to the age when it was formulated — Tudor England, where money consisted of the physical metal in the coins. If someone started minting coins with less gold or silver in them, they inevitably squeezed out the coins that had been properly made. But today’s world, dominated by paper currencies controlled by central banks, operates very differently. The money we use has no intrinsic value — so bad money could be driven out by the good.

    We are starting to see a flurry of new currencies.

    Amazon Coins: a virtual currency for Kindle Fire.

    This month, Amazon launched its own coins — a virtual currency that can be used to buy stuff for your Kindle tablet. It is a very tentative move to start with: more like loyalty points on a reward card than actual cash. But every river needs to start with a spring — and with the web’s mightiest retailer behind it the coins could grow into something significant.

    If so, Amazon coins will be far from alone. The virtual web currency BitCoin has already attracted a huge amount of publicity — and is steadily gaining in both circulation and value. After a crash last year — regrettably virtual currencies are just as prone to booms and busts as the real sort — it has steadied at around $25 and has gained acceptance.

    There are virtual currencies swapped on games such as Second Life and Farmville that may one day escape into the real world. At the time of the launch of the iPhone 5, there was speculation that Apple AAPL -0.19% would include a banking function, and perhaps even a currency — an iCoin would, of course, be much the same as everyone else’s money except twice as expensive and really cool to look at.

    We might be reaching the point where virtual currencies start to pose a real challenge to the existing ones: the dollar DXY +0.02% , euro EURUSD -0.01% , yen USDJPY +0.06% and pound GBPUSD -0.02% . Indeed, at the end of last year, the ECB put out a paper warning about the competition from these new currencies. Although still small, the paper suggested they might undermine the credibility of national currencies.

    It is not hard to see why central bankers are worried.

    'We endorse the idea of voluntarism; self-responsibility: Family, friends, and churches to solve problems, rather than saying that some monolithic government is going to make you take care of yourself and be a better person. It's a preposterous notion: It never worked, it never will. The government can't make you a better person; it can't make you follow good habits.' - Ron Paul 1988

    Awareness is the Root of Liberation Revolution is Action upon Revelation

    'Resistance and Disobedience in Economic Activity is the Most Moral Human Action Possible' - SEK3

    Flectere si nequeo superos, Acheronta movebo.

    ...the familiar ritual of institutional self-absolution...
    ...for protecting them, by mock trial, from punishment...

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  3. #2
    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 dollar pegged gift cards.
    My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right, tend to be unwilling or unable to accept blame )

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