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Amazon Coins and How the Definition of 'Crypto-Currency' Is Getting Too Loose

samzenpus posted about 2 months ago | from the call-it-money dept.

The Almighty Buck 115

Nerval's Lobster writes "Amazon has expanded support for its Amazon Coins from Kindle Fire tablets to Google Android mobile devices.In its press release, Amazon positioned its e-currency as the ultimate in convenience for customers who don't want their credit-card statements riddled with lots of micro-purchases from Amazon's App Store. Expanding the currency's reach is also a potential win for Amazon, which wants to create an end-to-end ecosystem for app developers. But Amazon Coins' existence could alienate the same demographic that made Bitcoin and other crypto-currencies such a hit. The company tethers the Coins to a user identity, and likely keeps significant records on its crypto-currency ecosystem: who buys what when. That concept is anathema to those online denizens who embraced Bitcoin as a way to make purchases without needing to reveal a real-world identity, or deal with a currency tethered to a central repository; genuine crypto-currency can be used to purchase pretty much anything from a purveyor willing to take it, including—in the case of Silk Road and other online bazaars—drugs and weapons. Indeed, Amazon Coins has more to do with a corporate 'currency' like the now-defunct Microsoft Points than an actual crypto-currency like Bitcoin. But that hasn't stopped some people from getting confused about it."

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115 comments

Not the Same (5, Insightful)

SuperKendall (25149) | about 2 months ago | (#46291837)

A virtual gift card is not the same thing a a virtual currency.

Re:Not the Same (2, Funny)

Anonymous Coward | about 2 months ago | (#46291881)

"But that hasn't stopped some people from getting confused about it."

Indeed.

Re:Not the Same (2)

cheater512 (783349) | about 2 months ago | (#46291945)

Yeah. What exactly is 'crypto' about this 'currency'? It is just a prepaid balance.

Re:Not the Same (4, Insightful)

msauve (701917) | about 2 months ago | (#46292037)

I think they meant "cryptic," not "crypto." You and the GP are right, this is more proprietary gift card/scrip than anything else.

Re:Not the Same (1)

Anonymous Coward | about 2 months ago | (#46292095)

I want a real crypto-currency. Not one that is something that the first-ins get all the coins while the latecomers have to move all the value in, but a Chaumian currency that is -truly- anonymous, and has a set limit of coins. Heck, these could be like bank scrip where trusted exchanges can have their own currency for exchanges, and with a Chaumian currency, nobody knows, not even the exchange place who has what.

Do it right... but I have a feeling that BitCoin was created so a couple people (or government) hiding behind a mask could reap some tidy profits in this shitty economy.

Re:Not the Same (0)

Anonymous Coward | about 2 months ago | (#46292359)

How do you propose to fairly distribute those coins?

Re:Not the Same (4, Insightful)

Ralph Wiggam (22354) | about 2 months ago | (#46292689)

So write some code. That doesn't sound difficult to implement securely. Oh wait...it sounds virtually impossible.

"Satoshi Nakamoto", the person or people who created bitcoin, are believed to have about a million bitcoins from early mining. That stash was worth a billion dollars at one point recently. Not a single transaction has occurred with the coins since Satoshi disappeared in 2011.

Nobody really knows why the bitcoin protocol was created. But evidence does not support the theory that they did it to make money.

Re:Not the Same (1)

geekoid (135745) | about 2 months ago | (#46295049)

The fiction known a Satoshi Makamoto as disappeared. There is no way to know if the group/person behind that fiction has cashed his coins.

Re:Not the Same (0)

Anonymous Coward | about 2 months ago | (#46295195)

Short answer: It can be knowable if they have not, it cannot be knowable if they have.

Long answer: It can be assumed that Satoshi Makamoto owned the first 50 BCs. Given that knowledge and the block chain, you know one wallet belonging to that entity. Reading the block chain will tell you how many coins are still in that first wallet. Therefore you can know the minimum amount of BCs owned by that entity. Then again, it may be zero, I don't know, I haven't bothered to check.

Re:Not the Same (0)

Anonymous Coward | about 2 months ago | (#46296117)

The private key could have been passed off to another person. You would need a very high trust of the selling party not to transfer the coins to another wallet, but it's not impossible that this happened. And the block chain has mechanisms to clip out records of old transactions.

Re:Not the Same (0)

Anonymous Coward | about 2 months ago | (#46295275)

Even though the evidence that they did it to make money is not apparent, it doesn't mean that they didn't do it to make money.

There are many possibilities. One is that he literally died, and therefore the means to access the initial crypto currency has been lost.

Another is hardware failure and insufficient backups. Even if he wanted to make a mint, the physical destruction of the bitcoins would prevent it.

Also, he could be leaking his bitcoins into the market slowly, to deter the market crash that would occur if he wanted to dissolve himself of a billion dollars in bitcoin. Such an action would not be easily detectable, even without all the crypto protections.

So basically, we have no evidence that he did it to make money; however, we also lack the means to collect such evidence unless Satoshi wanted to be so brash and obvious that he wants us to see such an intention.

Re:Not the Same (0)

Anonymous Coward | about 2 months ago | (#46297687)

I am Satoshi Nakamoto.

Here is my public key:
-----BEGIN PGP PUBLIC KEY BLOCK-----
Version: GnuPG v1.4.9 (Darwin)

mQGiBEy8srURBADlAamWM3TkgAKyVBVftUsg5aZ3zOA5UAlg+yI/6bzfTkYLtspA
LQ6typamac9re+lqnWdDMa4qVwSmaOMxLOlGhCWWfmA38QprU+ZfuesnxWrVAMG8

Re:Not the Same (0)

Anonymous Coward | about 2 months ago | (#46295907)

Not one that is something that the first-ins get all the coins while the latecomers have to move all the value in [...] has a set limit of coins.

Those things are mutually exclusive. As you approach the limit, everyone who has bought in so far will profit from deflation.

I want a real crypto-currency [...] a Chaumian currency that is -truly- anonymous

You should check out Open-Transactions. It uses Chaumian anonymous cash, but reduces the security risk of trusting a single server by "locking" the funds in a multisignature bitcoin transaction, requiring a signature from 51% of the multiple servers you've selected. Still very beta, though.

If you want BOTH complete decentralization AND complete anonymity, you'll have to wait for Zerocoin.

Re:Not the Same (1)

complete loony (663508) | about 2 months ago | (#46292125)

It's not impossible for them to be the same though. You could implement a gift card / store credit system using a crypto transaction model almost identical to bitcoin. Though you might want to eliminate the "mining" of new coins, and only allow your trusted server to produce blocks. You could still use the same publicly verifiable block chain validation process.

Re:Not the Same (0)

Anonymous Coward | about 2 months ago | (#46292363)

Indeed.

Also, we already have a word for "corporate currency", it's called Scrip. (wikipedia.org/wiki/Scrip)

Re:Not the Same (0)

Anonymous Coward | about 2 months ago | (#46295167)

Who's even calling it a "crypto-currency"? Author of TFA is clearly an idiot, which is probably why he gives a fuck about crypto-currencies in the first place.

Re:Not the Same (1)

CCarrot (1562079) | about 2 months ago | (#46296233)

A virtual gift card is not the same thing a a virtual currency.

Precisely. A currency can be exchanged for other forms of currency, whereas the value on a gift card can only be exchanged for specific goods and/or services.

Amazon Coins are not convertible to cash [amazon.com], therefore they're not a currency.

Too loose (-1)

Anonymous Coward | about 2 months ago | (#46291847)

samzenpus's mom is getting too loose.

Re:Too loose (0)

Anonymous Coward | about 2 months ago | (#46292331)

Nah, I nailed her last night. She's still good.....

Ok (-1, Offtopic)

oldhack (1037484) | about 2 months ago | (#46291875)

Fuck beta.

I'm guessing it's their way to force people to log in.

But then, even without the beta, slashdot was scraping the bottom anyways.

Re:Ok (1)

bonehead (6382) | about 2 months ago | (#46292355)

But then, even without the beta, slashdot was scraping the bottom anyways.

Forget beta. Slashdot loses its credibility simply for the fact that "https://slashdot.org" doesn't work, and brings me back to the regular http site.

Yes, yes, I know... SSL is broken by design and offers no security against the NSA and their foreign counterparts. Still kinda handy for skirting corporate monitoring crap, though.....

Re:Ok (1)

Sepodati (746220) | about 2 months ago | (#46293341)

Likely your corporate system is doing SSL proxy, too. I know ours is. Proxy acts as a man-in-the-middle and you get a generated cert from the proxy, not Slashdot.

Re:Ok (1)

dreamchaser (49529) | about 2 months ago | (#46293739)

No, slashdot just doesn't support SSL. It doesn't matter if you're behind a proxy or SSL interception mechanism or not.

Netcraft confirms it (-1)

Anonymous Coward | about 2 months ago | (#46291891)

It is official; Netcraft now confirms: *BSD is dying
One more crippling bombshell hit the already beleaguered *BSD community when IDC confirmed that *BSD market share has dropped yet again, now down to less than a fraction of 1 percent of all servers. Coming close on the heels of a recent Netcraft survey which plainly states that *BSD has lost more market share, this news serves to reinforce what we've known all along. *BSD is collapsing in complete disarray, as fittingly exemplified by failing dead last in the recent Sys Admin comprehensive networking test.

You don't need to be a Kreskin to predict *BSD's future. The hand writing is on the wall: *BSD faces a bleak future. In fact there won't be any future at all for *BSD because *BSD is dying. Things are looking very bad for *BSD. As many of us are already aware, *BSD continues to lose market share. Red ink flows like a river of blood.

FreeBSD is the most endangered of them all, having lost 93% of its core developers. The sudden and unpleasant departures of long time FreeBSD developers Jordan Hubbard and Mike Smith only serve to underscore the point more clearly. There can no longer be any doubt: FreeBSD is dying.

Let's keep to the facts and look at the numbers.

OpenBSD leader Theo states that there are 7000 users of OpenBSD. How many users of NetBSD are there? Let's see. The number of OpenBSD versus NetBSD posts on Usenet is roughly in ratio of 5 to 1. Therefore there are about 7000/5 = 1400 NetBSD users. BSD/OS posts on Usenet are about half of the volume of NetBSD posts. Therefore there are about 700 users of BSD/OS. A recent article put FreeBSD at about 80 percent of the *BSD market. Therefore there are (7000+1400+700)*4 = 36400 FreeBSD users. This is consistent with the number of FreeBSD Usenet posts.

Due to the troubles of Walnut Creek, abysmal sales and so on, FreeBSD went out of business and was taken over by BSDI who sell another troubled OS. Now BSDI is also dead, its corpse turned over to yet another charnel house.

All major surveys show that *BSD has steadily declined in market share. *BSD is very sick and its long term survival prospects are very dim. If *BSD is to survive at all it will be among OS dilettante dabblers. *BSD continues to decay. Nothing short of a cockeyed miracle could save *BSD from its fate at this point in time. For all practical purposes, *BSD is dead.

MS got rid of MS points (2, Insightful)

Anonymous Coward | about 2 months ago | (#46291915)

Surely Microsoft had a good reason for moving away from MS Points. I don't think reducing the number of credit card transactions actually benefits the consumer since the consumer isn't paying a per transaction fee

Re:MS got rid of MS points (4, Interesting)

king neckbeard (1801738) | about 2 months ago | (#46292015)

The effect transaction fees have on vendors is pretty important, as it lowers the price floor, making smaller transactions more reasonable. Whether or not that's good or not is a different manner, but it's the key behind all this microtransaction stuff.

Re:MS got rid of MS points (3, Informative)

wiredlogic (135348) | about 2 months ago | (#46292347)

I don't think reducing the number of credit card transactions actually benefits the consumer since the consumer isn't paying a per transaction fee

You pay it indirectly through higher prices on goods and services. For a business as large as Amazon's or any other major retailer, the fees on small transactions add up to a significant amount that can either be passed back to the consumer with lower prices or kept as more profit.

Re:MS got rid of MS points (1)

datavirtue (1104259) | about 2 months ago | (#46296021)

Yes they are. Total costs are always figured into pricing....even if you reach a floor, the floor includes the transaction fees. Same with taxes.

Do we care? (3, Insightful)

Alwin Henseler (640539) | about 2 months ago | (#46291947)

In my experience, 'classic' electronic currencies follow this general pattern: 1) you obtain them from a bank, 2) you pass it to another user, and 3) that other user brings it back to the bank.

At best, the bank can't see where the receiving party's money came from. But still, every 'coin' in circulation goes from bank -> user -> another user -> back to the bank.

The big difference with cash is this: using cash, money can pass from #1 user to a 2nd user -> 3rd user -> 4th user -> back to the bank. With the bank having no way to figure out what happened in between. Transfers from 1 -> 2, 2 -> 3, and 3 -> 4 need not involve a bank at all.

To me, anything that fits the 2nd definition is interesting. Anything that fits the 1st definition, is just electronic payments in the classical sense that eg. governments might be monitoring every single transaction. Regardless of implementation. So if in this case, Amazon = 'the bank', do we even care, if that currency clearly isn't 'electronic cash' ?

Re:Do we care? (1)

profplump (309017) | about 2 months ago | (#46292173)

In my experience, 'classic' paper currencies follow this general pattern: 1) you obtain them from a bank, 2) you pass it to another user, and 3) that other user brings it back to the bank.

Certainly you can use cash in other ways, but but you *can* use gift cards in other ways. Or you can barter with stamps and rocks. There isn't anything special about paper money that lets it be pass more anonymously than other valuable goods (or electronic records of value) -- it's just more efficient because it's more liquid.

Re:Do we care? (4, Insightful)

bonehead (6382) | about 2 months ago | (#46292405)

There isn't anything special about paper money

If you truly believe that, then you really haven't thought this through.

A couple of hours ago I stopped at a convenience store and purchased a 12-pack of beer and a pack of smokes. I paid with one of my credit cards. I take it for granted that multiple entities can see that I made a purchase. I also take it for granted that most of them can take the total, subtract the sales tax, and then fairly easily determine which combination of items would have added up to that amount. Hell, that's pretty simple stuff, and I assume that "they" can do hard stuff, too.

Now, if I had thrown a $20 bill down on the counter instead of the credit card? "They" wouldn't get any info at all.

So why do I use credit cards? Honestly, I don't give a shit if "they" know I bought a 12-pack of shitty beer and a pack of smokes tonight.

But if I was making a purchase that I did want to keep to myself? Hell yeah, cash would be the only way to go.

At present, paper money is the one and only way to make a purchase and be assured of anonymity. To think that there isn't anything special about paper money is simply delusional.

Re:Do we care? (0)

Anonymous Coward | about 2 months ago | (#46292981)

If you used an ATM to get that $20 bill, there's a good chance someone knows it went to you. Of course, they have no way of knowing how many hands it went through between you and the store (or the bank where it eventually got deposited).

Re:Do we care? (0)

Anonymous Coward | about 2 months ago | (#46295867)

You should consider using cash to pay for alcohol. Credit card companies may view you as a credit risk, and lower your rating if they decide you're spending "too much" on alcohol. I haven't read anything about cigarettes, but I'd use cash for that, too. A high credit rating not only helps you get low interest loans, it also affects your ability to buy insurance, and even prospective employers make judgements about a potential hire's reliability based on the credit score.

Never use zero or infinite probabilities (0)

Anonymous Coward | about 2 months ago | (#46296061)

You can only be assured of dollar anonymity if you're sure you weren't on camera at the ATM, weren't on camera on the street, and weren't on camera at the convenience store. And that the convenience store owner isn't using "Where's George?"

It's impossible to be 100.000% assured of anonymity.

Re:Do we care? (2, Insightful)

Wycliffe (116160) | about 2 months ago | (#46292233)

Transfers from 1 -> 2, 2 -> 3, and 3 -> 4 need not involve a bank at all.

In theory this might be true but in practice cash is very tracable. US currency has serial numbers.
You get your money from the bank. You buy food at a restaurant. The restaurant deposits it in the bank.
There might be an extra hop or two if you're lucky but the number of hops without passing a bank is
minimal. If you don't believe me, try to pass off a counterfit bill. The secret service is extremely good
at tracing backwards the route it took to get to the bank and can usually do it in only a couple hops.
Smaller bills might get passed back and forth a bit more but even a place like walmart rarely gives back
$20 bills as change except for a tiny bit of cashback but the majority goes straight back to the bank.

Re:Do we care? (1)

CCarrot (1562079) | about 2 months ago | (#46296137)

Transfers from 1 -> 2, 2 -> 3, and 3 -> 4 need not involve a bank at all.

In theory this might be true but in practice cash is very tracable. US currency has serial numbers.
You get your money from the bank. You buy food at a restaurant. The restaurant deposits it in the bank.
There might be an extra hop or two if you're lucky but the number of hops without passing a bank is
minimal. If you don't believe me, try to pass off a counterfit bill. The secret service is extremely good
at tracing backwards the route it took to get to the bank and can usually do it in only a couple hops.
Smaller bills might get passed back and forth a bit more but even a place like walmart rarely gives back
$20 bills as change except for a tiny bit of cashback but the majority goes straight back to the bank.

No. Just...don't.

Trust me, "But it was for science!" doesn't hold a lot of water in the back rooms...

Re:Do we care? (0)

Anonymous Coward | about 2 months ago | (#46296291)

Walmart actually operates thier own bank.

Confusion over currency is not a new thing... (2)

TheNarrator (200498) | about 2 months ago | (#46291961)

People getting confused about currency and money is something that is a very very old phenomenon. This article is no exception.

All the perplexities, confusions, and distresses in America arise, not from defects in their constitution or confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation.
- Letter to Thomas Jefferson (23 August 1787), The Works of John Adams

Re:Confusion over currency is not a new thing... (2)

bonehead (6382) | about 2 months ago | (#46292473)

The quote you included doesn't really back up your point very well, but you do make a good point anyway.

The entire concept of money is 100% dependent on general trust and perception. If you want my boat, and I agree to sell it to you for $10,000, I'm not agreeing to it because those dollars have any particular value to me. I agree to it because I have confidence that I can trade them for something that does have value to me.

In other words, "money" has value because, and only because, we all agree it does. It's simply a proxy. We only accept it because we believe that someone else down the road will accept it as well.

If that system of confidence ever breaks down (and someday it will), we're probably all screwed.

Different Solutions to Different Problems (3, Insightful)

grapes911 (646574) | about 2 months ago | (#46292001)

Amazon Coins and Bitcoin solve two different problems. The average Amazon customer probably heard of Bitcoin but doesn't know exactly what it is. They probably understand that Amazon Coins are just gift cards though. I don't see the problem.

Re:Different Solutions to Different Problems (1)

TubeSteak (669689) | about 2 months ago | (#46292227)

They probably understand that Amazon Coins are just gift cards though. I don't see the problem.

They're intentionally mooching off the lite/doge/bitcoin name recognition.
Someone in marketing: People have heard about this coin stuff, so let's roll out something with "coin" in the name!

Re:Different Solutions to Different Problems (1)

grapes911 (646574) | about 2 months ago | (#46292309)

"Coin" is such a generic term relating to currency that I can't fault Amazon for using it. Nintendo has Play Coins. Next you are going to tell me someone is going to try to trademark "candy" before others start mooching off that.

Re:Different Solutions to Different Problems (1)

bonehead (6382) | about 2 months ago | (#46292493)

They're intentionally mooching off the lite/doge/bitcoin name recognition.

No, I'm sure Amazon can afford much, much smarter marketing people than that.

When did bitcoin get big enough to have "name recognition"? Outside of geek circles the only people who have even heard of it have gotten their info from news articles about silkroad, and thus equate it to drug smuggling, gun running, human trafficking, etc....

I'm not a marketing guy, but if I was, and was looking for a good brand to leach off of, it sure as fuck wouldn't be "bitcoin".

Re:Different Solutions to Different Problems (0)

Anonymous Coward | about 2 months ago | (#46292555)

The doge 'name recognition'? Are you retarded?

Re:Different Solutions to Different Problems (1)

Mike Buddha (10734) | about 2 months ago | (#46292611)

Yeah, like all those quarters, nickels, dimes, and pennies out there. They claim to be "coin", too! They're not crypto currency,either! What a scam!

Re:Different Solutions to Different Problems (1)

Ralph Wiggam (22354) | about 2 months ago | (#46292707)

The nice thing about Amazon Coins is that when you wake up in the morning, they're worth the same amount as when you went to bed.

Re:Different Solutions to Different Problems (1)

Squash (2258) | about 2 months ago | (#46293405)

Being fully tied to a cash value is one of the reasons it can't be a currency. If by some magic the Euro was nailed to equivalence to the USD, would there still be a reason for both to exist?

Re:Different Solutions to Different Problems (0)

Anonymous Coward | about 2 months ago | (#46296367)

Bitcoins and Amazon coins both actually solve the microtransaction problem. That is how can I reduce transfer fees on a large number of small payments. Amazon coin lets you just pay fees going into or out of the anazon marketplace. Bitcoins gives you very low absolute fees and any transaction, and many transactions are free if you are willing to wait a little bit longer, and the transaction data is very small.

Muckraking and FUD, move along, nothing to see. (5, Informative)

DerekLyons (302214) | about 2 months ago | (#46292039)

Amazon Coins are nothing but 'points' or 'credits' or 'tokens', and those have been around for a very long time.
 
The blog author is... pretty much clueless. Nobody but him is confusing Bitcoins and Amazon Coins, or referring to the latter as crypto-currency. Nobody but him is confused about the difference between the two.

Re:Muckraking and FUD, move along, nothing to see. (3, Interesting)

Animats (122034) | about 2 months ago | (#46292073)

Yes, there's a whole prepaid purchase industry out there, and whole racks of their cards at most retail outlets. This is just another one.

Burger King had the most honest description: "Pay now so you can eat later".

Re:Muckraking and FUD, move along, nothing to see. (2)

rsborg (111459) | about 2 months ago | (#46292891)

Yes, there's a whole prepaid purchase industry out there, and whole racks of their cards at most retail outlets. This is just another one.

Burger King had the most honest description: "Pay now so you can eat later".

It's honest, but a bit naive. Prepaid cards serve a lot of purposes.

1) It's a great way to give a gift that's not as impersonal as money (just a step above, but hey).
2) Great way to buy stuff in one country with cash from another (eBay has a thriving prepaid card market). A really valid use-case for this is buying music from countries you don't have credit cards which is made difficult in the first place by the media industry and it's market segmentation (region coding, etc).
3) You can launder money this way - safer than cash. See Tide economy [1].

[1] http://reason.com/archives/201... [reason.com]

Re:Muckraking and FUD, move along, nothing to see. (4, Interesting)

AthanasiusKircher (1333179) | about 2 months ago | (#46292091)

The blog author is... pretty much clueless. Nobody but him is confusing Bitcoins and Amazon Coins, or referring to the latter as crypto-currency.

Indeed. This is all nonsense. The summary says: "But Amazon Coins' existence could alienate the same demographic that made Bitcoin and other crypto-currencies such a hit." Yeah... and?

The people who use Amazon coins are generally tethered to a locked-down Amazon product (like a Kindle) and want the convenience of buying something for $1 without having to run through a credit card authorization or whatever every time. (Plus, Amazon apparently gives out bonus "coins" in various scenarios.)

Cryptocurrency users want to... well, use a currency to make financial transactions in the real world (not fake internal Amazon transactions). And some of the biggest advocates are people who want to avoid tracking and such. I sincerely doubt they are going to confuse Bitcoin with an internal bookkeeping token on a locked-down device or something. The fact that Amazon is now offering it to other people who want to buy crap from their app store doesn't change the idea very much.

No one's being "alienated." The target audiences were and still are two mostly mutually exclusive sets of people. At a minimum, no one except the people who wrote and promoted this story seem confused about how these are for two completely different types of transactions.

Re:Muckraking and FUD, move along, nothing to see. (0)

Anonymous Coward | about 2 months ago | (#46295315)

The real news is that anything that resembles an account can now become news by calling it an electronic currency.

I can't wait till people bring out the headlines over wire transfers. "Electronic currency now transferable between registered banks!"

Re:Muckraking and FUD, move along, nothing to see. (1)

timholman (71886) | about 2 months ago | (#46292903)

The blog author is... pretty much clueless. Nobody but him is confusing Bitcoins and Amazon Coins, or referring to the latter as crypto-currency. Nobody but him is confused about the difference between the two.

I think there is a less obvious motive behind this article. It's not that BTC promoters think that Amazon Coins are confusing consumers; rather, to them any competing digital currency is a danger to Bitcoin. The only thing that makes a BTC "valuable" is its scarcity. Since only 21 million BTC will ever be mined, that makes every BTC unique and irreplaceable.

But being unique and irreplaceable does not necessarily equate to being valuable. As in all things digital, Bitcoin's own popularity will be its undoing. There are already dozens of competing crypto-currencies out there, many of them little more than BTC clones. If you have BTC, then it is in your best interests to attack the competition in order to preserve the uniqueness of your "investment". Although no one will be confused by the difference between BTC and Amazon Coins, the very use of the word "Coin" dilutes the BTC brand, so to speak.

In fact, I think we may be seeing the opening salvos of a brand recognition war between competing crypto-currencies. If you have BTC to sell, you do not want a potential buyer to consider an alternative currency. Similarly, if you have Dogecoins, Peercoins, or Litecoins, but not Bitcoins, then it will benefit the value of your own stash if you can promote it as a superior alternative to BTC.

It will be an interesting battle that will ultimately wipe out the speculative value of BTC (and all other crypto-currencies), as consumers realize that many, many different currencies exist that behave just like BTC. Ultimately the value of a BTC (or any other crypto-currency) will drop to a level that is more representative of the network processing costs to verify a transaction, rather than any intrinsic value of the coin itself. And when that happens, BTC may actually go more mainstream, as it will no longer be subject to huge day-to-day shifts in value, or market manipulations by get-rich-quick schemers.

Re:Muckraking and FUD, move along, nothing to see. (3, Informative)

Squash (2258) | about 2 months ago | (#46293493)

Well, let's correct a few things there.

First, while there is a maximum of 21 million BTC that can be mined, each BTC is divisible to the 8th decimal place. Think of the Bitcoin as a 1 million dollar bill, and you can still break it into pennies. The "maximum number" is hardly more relevant than the amount of trees in the world that can be milled into paper currency before they "run out".

Second, the suggestion that BTC users would feel threatened by something like Amazon Coin is quite a dubious claim. The only real similarity they have is the use of the word "coin" in the name. Calling it a "competing currency" is just false equivalence.

Likewise, the "altcoins" such as litecoin and dogecoin provide many (or all) of the same features as BTC, but are more complimentary than competitive. R&D being put into one can benefit the others, and markets exist to easy convert between them. The ecosystem makes it very easy to participate, hardly what you would get from groups of people "attacking" each other. Trying different takes on the cryptocurrency process, putting theories through their paces, will ultimately make for a stronger ecosystem.

Finally, speculative value. Accept that this is a reality, and pretty much universal. Fiat currencies are based on speculative value as much as bitcoin is, the difference is that the fiat is more widespread thus the value tends to shift much more slowly. You accept a $20 with the speculative assumption that you can trade it later for something of equal value. Because it tends to have a lower volatility, this is considered a low risk assumption. Ask a Russian over 35 or so how that isn't necessarily true. Similarly, the USD has shown its own volatility, which has been overall quite negative, losing 95% of its value in the last 100 years.

Re:Muckraking and FUD, move along, nothing to see. (0)

Anonymous Coward | about 2 months ago | (#46294045)

First, while there is a maximum of 21 million BTC that can be mined, each BTC is divisible to the 8th decimal place. Think of the Bitcoin as a 1 million dollar bill, and you can still break it into pennies.

Going with your analogy, there are 2.1e13 Bitcoin "dollars", or about $3000 for each person in the world, if the smallest indivisible unit is the penny. I suspect that the average person has more money than that, in which case Bitcoin can't quite replace all the world's currencies without sacrificing a bit off the bottom end of the dynamic range (i.e. increasing the value of the smallest indivisible unit).

Re:Muckraking and FUD, move along, nothing to see. (1)

strstr (539330) | about 2 months ago | (#46294941)

The point is the value of the bitcoin adjusts itself for market value..

So there is limited bitcoin amounts, but the bitcoins value can go to infinity in other currencies. 1 bit coin might end up being worth $1 billion for example, and a penny of bitoin would then be worth.. like 10 USD?

I do not think bitcoin needs to be broken down into smaller chunks because we can simply convert it to another currency for that when we need to, including other crypto-currency.

Bitcoin will simply be the gold standard of crypto-currency, having a limited amount just like gold and other commodities. Its so cool, because eventually we will not even be able to mine anymore gold or ore, just like bitcoin..

Re:Muckraking and FUD, move along, nothing to see. (0)

Anonymous Coward | about 2 months ago | (#46297709)

Bitcoin will simply be the gold standard of crypto-currency, having a limited amount just like gold and other commodities. Its so cool, because eventually we will not even be able to mine anymore gold or ore, just like bitcoin..

That's not cool. It's dumb. Who wants a currency that cannot be properly scaled to the size of the market?

And no, subdivision is not a good answer. Currencies function best as a medium of exchange when their value is stable. Relying on subdivision means you're planning on the currency deflating, which means people will want to hold them rather than spend them, which means the currency won't function as a currency.

Currencies are mediums of exchange, not appreciating repositories of value. This is the fundamental thinking error made by goldbugs and bitcoiners alike.

Re:Muckraking and FUD, move along, nothing to see. (0)

Anonymous Coward | about 2 months ago | (#46295353)

Except that you don't need a physical dollar bill to have a dollar, you just need a trusted entity who is willing to trade a dollar on their ledger for a paper bill when you demand it.

So the bitcoin limit is not "just like" the possible paper supply of the world, if we made our money out of paper, which we don't.

Paper currency is made of cloth, cloth and plastic weave, or of pure plastic. Real paper currency would quickly desinigrate when contacting water.

Considering you can't get the basics of what currency are made out of right, and you cannot get the concept of how currency is really tracked, and your analogy is broken, perhaps you should think of your position a bit more before you correct a few things here.

Thanks for mentioning it.... (0)

Anonymous Coward | about 2 months ago | (#46292045)

I was fine not knowing this existed... this article is part of the problem!

You think that's something? (0)

Anonymous Coward | about 2 months ago | (#46292049)

The definition of "3D printed" is also quite vague.... Was there a 3D printed in the other room? It wasn't even plugged or in working condition? Doesn't matter! It's 3D printed!

Direct you to World of Warcraft gold (1)

GoodNewsJimDotCom (2244874) | about 2 months ago | (#46292097)

What people accept for currency online doesn't need to have everything just right. It just needs to be in demand to a degree.

If you can buy stuff with it, people will want it.

What a stupid thing. (3, Interesting)

jtownatpunk.net (245670) | about 2 months ago | (#46292153)

Who gives half a shit how many line items are on their debit/credit statement? This has all the logic of putting money on a gift card.

I guess it could be used like an allowance for kids but it'd make more sense to give the kid a pre-paid Visa/Mastercard and drop a fixed amount on it every month. That way they can use it anywhere instead of just at the one or two places where some proprietary currency is accepted.

The whole thing smacks of Itchy and Scratchy Bucks.

Re:What a stupid thing. (1)

ArbitraryName (3391191) | about 2 months ago | (#46292213)

Who gives half a shit how many line items are on their debit/credit statement?

Amazon does. They don't want to pay processing fees running nickel and dime transactions. This isn't about any benefit to the end customer, Amazon just needs to spin it that way so people will use it.

Re:What a stupid thing. (2, Funny)

Anonymous Coward | about 2 months ago | (#46292257)

Would you like to buy some Itchy and Scratchy Money?
Homer: What's that?
Well, it's money that's made just for the park. It works just like regular money but it's, uh, "fun".

Credit card companies do (1)

swb (14022) | about 2 months ago | (#46293573)

They have to print and mail your paper statement. That costs real money, although I would imagine they have it covered up to quite a few pages.

BitCoin has complete record of transactions. (4, Interesting)

140Mandak262Jamuna (970587) | about 2 months ago | (#46292177)

This is my understanding of the validating process of the bit coins:

Bitcoin blocks are Sha checksums of transactions digitally signed. Blocks have the check sum of the previous block in the chain. Bitcoins contain complete transaction record going all the way back to the original bitcoin that started that chain of transactions. But if Alice buys drugs from Bob and given a bit coin forever there is a transaction recorded that Alice gave so many bitcoins to Bob. The transactions are between cyber entities and it is difficult to decode the block, find the cyber identity and then link it to a real identity. But all claims of anonymity is based on the level of difficulty in decoding the blocks to get the cyber accounts and linking them to real life. Not based on any notion of mathematical impossibility or secrecy.

Is it anywhere close to being right?

Re:BitCoin has complete record of transactions. (0)

Anonymous Coward | about 2 months ago | (#46292661)

Correct. The only way to make it anonymous is to use a coin-tumbler service.

Re:BitCoin has complete record of transactions. (1)

banda (206438) | about 2 months ago | (#46292705)

No, not really - The purpose of cryptography in crypto currencies is two-fold: 1) to make it massively impractical for any individual to falsify the record of their payment or receipt and 2) to regulate the money supply by algorithm in response to the activity of the currency's economy. The net effect of these two purposes is that value can be stored and transferred between accounts without a "trusted agent" in the middle such as a deposit bank or a central bank. So, you can say the point of crypto currency is not to make the account holders anonymous, it is to eliminate the "trusted middleman" from commerce. Of course once that trusted middleman is eliminated, there is no functional reason to record the identities of the account owners anywhere, because that information is no longer important for commerce. The cryptography doesn't conceal the identities of account holders - it makes their identities irrelevant.
The block chain is easy to read and verify, contains the entire transaction history of every "wallet" that ever transacted in bitcoin, and does not contain any personally identifiable information about bitcoin holders because it doesn't need to.

Re:BitCoin has complete record of transactions. (0)

Anonymous Coward | about 2 months ago | (#46292985)

The block chain is easy to read and verify, contains the entire transaction history of every "wallet" that ever transacted in bitcoin

Maybe someone can explain this to me, because I still don't get it... doesn't keeping a record of EVERY transaction eventually make the block chain so huge that is't unmanageable, and takes forever to sync?

Re:BitCoin has complete record of transactions. (1)

Goaway (82658) | about 2 months ago | (#46293531)

Yes. There are suggestions for how to deal with this but nobody has bothered to try and actually implement them yet.

Currently, it is a bit over 14 gigabytes in size.

Re:BitCoin has complete record of transactions. (1)

Squash (2258) | about 2 months ago | (#46293533)

Well, 2 notes to this.

First, Satoshi described a method for full validating nodes to purge old data, briefly described here: https://en.bitcoin.it/wiki/Sca... [bitcoin.it]
This allows most nodes to operate with a reduced data set, yet still fully participate.

Second, most users don't need to keep their own copy of the full blockchain, and can use a lightweight client such as Electrum instead. Initial sync time goes from hours to about a minute.

Before you balk too much on the size of the transaction history, consider how much data Visa is storing to achieve similar goals. Do you think they have ever deleted a transaction record?

Re:BitCoin has complete record of transactions. (1)

banda (206438) | about 2 months ago | (#46294267)

Perhaps - at the present, it is 14 GB (source: https://blockchain.info/charts... [blockchain.info])
BUT, to have a bitcoin wallet and participate in bitcoin commerce, it's not required to have a local copy of the blockchain.
Further, if you look at the original whitepaper ( https://bitcoin.org/bitcoin.pd... [bitcoin.org] ) you'll see section 7 has an explanation of how sufficiently old transactions COULD be removed from the blockchain without corrupting the hash of each bitcoin.

Re:BitCoin has complete record of transactions. (4, Informative)

subreality (157447) | about 2 months ago | (#46292917)

You're close. There's no difficulty decoding the blockchain. The transactions are a public ledger. Have a look: https://blockchain.info/tree/1... [blockchain.info]

It's not anonymous - it's pseudonymous. Your address is your pseudonym. It can be linked to you in many ways:

When you buy something the seller knows who you are (they have your mailing address, your IP address, etc), and they know your Bitcoin address (the transaction is public information). Anyone watching your address will also see the transaction. If the address you sent coins to is a known address the investigator can then go to that seller and request your identity (via subpoena, violence, bribery, etc).

When you transmit the transaction it's first received by a few network nodes. If the investigator is running one of those nodes they see your IP. They won't know for certain it's you (perhaps you were just relaying a transaction), but it's still a short list to check. If it's the NSA or anyone else who can monitor your internet connection directly, they can easily discover that the transaction originated from you because no one sent it to you first.

People use mixing services to help obscure the origin of their coins. It makes it harder, but it's still possible to perform statistical analysis. For a simple example: https://blockchain.info/taint/... [blockchain.info] . The investigator can find some addresses which correlate with yours. Even if they don't find YOU they might find someone you do business with, then coerce them into giving up your identity.

It's a lot like cash. You can pass it around freely, but every dollar bill has a serial number. You can spend it with relative anonymity, but it will be scanned whenever it passes through a bank. If someone is looking for certain serial numbers then they can easily find the bank your merchant uses; then stake out the merchant; then find you.

Re:BitCoin has complete record of transactions. (1)

drinkypoo (153816) | about 2 months ago | (#46293597)

It's a lot like cash. You can pass it around freely, but every dollar bill has a serial number.

It's worse than that. Your wallet has an ID, too. They don't just know which currency unit is traveling but also have some idea of where it's coming from and where it's going to. That's the benefit of paper money, less of that.

Re:BitCoin has complete record of transactions. (1)

140Mandak262Jamuna (970587) | about 2 months ago | (#46294485)

Thanks your post make it clear, and I will be able to explain bit coins to people who are even less tech savvy than I am.

Basically the way bitcoin does away with "trusted middle map" is by making the bank ledger public. Instead of one trusted bank validating the entries and confirming your bank balance, the entire ledger is public. Multiple entities check the ledger and confirm your bank balance. You don't need the trusted middle man any more. All this cryptography is to make sure the ledger is not forged or fraudulent entries are not added. The cryptography is not meant to protect the identity of the accounts nor to promise anonymity.

So bitcoins are totally transparent. If David the drug dealer accepted bit coins from Alice the drug user, there is a record of bit coins from Alice ending up in the wallet of David. This record exists and will exist for ever. Multiple agencies around the world will confirm, "yes Alice gave David bit coins, before this transaction and after that transaction". If this transaction has already happened, it is carved in stone and it can never be erased by any body.

But Alice and David are bit coin wallets, they only exist in the bit coin universe as unique entities. Who David and Alice are in real life is not known to the bit coin universe. But wherever the bit coin universe interfaces with real life these connections can be detected using standard police and forensic techniques.

Let us say David gets caught, his bit coin wallet is connected to David Actualperson, 1234, broadway, anytown, usa 23456. If David was dumb enough to maintain any kind of record like "bitcoin from Alice wallet - deliver drugs to Alice Actualwoman, apt 123, 4567, 8th street" Alice can be linked to that bitcoin wallet. (Remember David was dumb enough to choose drug dealing as a career, so he might actually be leaving behind lots of clues). As more and more Actualpersons get connected to bitcoin wallets the anonymity will completely breakdown.

Re:BitCoin has complete record of transactions. (0)

Anonymous Coward | about 2 months ago | (#46296595)

The record does not exist forever, eventually old transactions will be knocked of the blockchain after it become buried to a certain level. Something about a merkle tree. Anyways check out the original paper if you don't believe me. Now a third party could construct a full tree with active monitoring going foward, but they can't pull a full tree going back by looking at the block chain.

Re:BitCoin has complete record of transactions. (1)

140Mandak262Jamuna (970587) | about 2 months ago | (#46297589)

Anyways check out the original paper if you don't believe me

I believe you. I am just beginning to understand bitcoins.

Re:BitCoin has complete record of transactions. (0)

Anonymous Coward | about 2 months ago | (#46293221)

If Alice gives Bob a blowjob, then Bob will give Alice her fix for free. An easy, anonymous way to make payments in-person.

Re:BitCoin has complete record of transactions. (0)

Anonymous Coward | about 2 months ago | (#46295349)

There isn't really a way to 'have' a BC. Basically, BC is a 'block-chain' (ie. a public ledger). It has a publicly accessible record of all transactions that have occurred. All transactions are signed by the coin giver's private key, and all public keys are known. When 'receiving' a quantity of BC, what you do is check that the wallet giving it to you has validly signed it (ie. that they are actually the ones who own the wallet), and that the BC being given to you is currently in their possession (according to the public ledger).

Technically the only thing you can 'own' is a wallet, which you can easily create. The only reason you can 'own' BCs is because the public ledger says those coins are currently in your wallet.

What people refer to as BC mining is simply the act of validating the public ledger (which is made intentionally hard to prevent 'tinkering'), for which the validators are rewarded with BCs added to their wallet (as set quantity for each validation).

How is this any different than how MS ran XBL? (2)

ducomputergeek (595742) | about 2 months ago | (#46292179)

Microsoft used to sell "points" to buy stuff over Xbox Live. Interestingly enough last year they stopped and went to a currency based system. So instead of "rent a movie on demand for 600 points" it became "Rent Movie for $2.99" or whatever the real dollars equivalent were. And I much prefer the new system.

Need a shipping address (0)

Anonymous Coward | about 2 months ago | (#46292259)

To buy anything online with bitcoins, you will need to provide a shipping address, thus revealing quite a bit.

Re:Need a shipping address (0)

Anonymous Coward | about 2 months ago | (#46296845)

You could use dead drops as well.

Xtal's rule of money (3, Funny)

xtal (49134) | about 2 months ago | (#46292311)

Can you buy an ounce of blow with it?

If yes, it's currency.

If no, it ain't.

Pretty simple. It also sums up why governments have issue, and will inevitably crack down.

A crypto currency backed by a nation-state would be a very interesting thing indeed.

Author doesn't seem to understand anything (2)

antifoidulus (807088) | about 2 months ago | (#46292357)

From TFA:

"Expanding the currencyâ(TM)s reach is also a potential win for Amazon, which wants to create an end-to-end ecosystem for app developers."

Um, no, that's not the main reason Amazon created the coins, esp. since the app developers see the same amount of cash regardless of how the user paid. The reason Amazon likes the coins instead of making a bunch of 99 cent charges to a credit card is simple:
1. Charging $10 once to a credit card is cheaper to Amazon than charging $1 10 times.

2. Lock-in, this is the traditional "gift card" route, any money put into the Amazon coin ecosystem will eventually have to be used on an Amazon good/service. If you buy $100 in coins but only use $80, well tough. This has nothing to do with creating a huge ecosystem where the coins can be traded freely for goods and services that have nothing to do with Amazon.

more like (-1)

Anonymous Coward | about 2 months ago | (#46292407)

That concept is anathema to those online denizens who <strike>embraced Bitcoin as a way to make purchases without needing to reveal a real-world identity</strike> buy child pornography, drugs, weapons, and contract assassination.

It's basically just tokens (0)

Anonymous Coward | about 2 months ago | (#46292543)

*coin are just tokens like the ones you get at clubs, casinos etc. As long as governments have the monopoly on violence, people have no choice but to use government issued currencies (to pay wages and taxes). Like other goods, they can buy tokens with it, and people may accept tokens as payment, but tokens are not legal tender. It's just barter.

ZOMG! Bitcoin and Amazon Coins are differents!!!1! (1)

wonkey_monkey (2592601) | about 2 months ago | (#46293239)

ZOMG! Bitcoin and Amazon Coins are differents!!!1!

Yes, yes they are.

Amazon Coins and How the Definition of 'Crypto-Currency' Is Getting Too Loose

Is it? Who's calling Amazon Coins a crypto-currency? Is it "no-one"?

"Amazon coin" as broader currency? (2)

swb (14022) | about 2 months ago | (#46293631)

Could Amazon ever allow other merchants to accept its "coin", in effect creating a more fungible currency?

They're big enough in enough ways (size, computing capacity, etc) that they almost could create a stored value system and transaction processing ability that they might be able to induce other vendors to accept their coin that they would in turn redeem for the merchant as actual currency.

Smaller vendors would get access to a sophisticated payment system and perhaps gain customer confidence or customers wanting to spend/get rid of coins on items Amazon doesn't carry.

Amazon would gain the transaction info for their analytics as well as maybe more consumer acceptance of their coin.

I wonder how long until big e-commerce companies attempt to create a common currency-type payment system that allows them to bypass Visa/MC/banks and possibly even deal with national currency conversion costs.

Wait! what? Bitcoin is a hit!?!? (0)

Anonymous Coward | about 2 months ago | (#46294081)

When did this happen? I have never used it, do not know of anyone who have used it. Have never HEARD of anyone who has used it. Have not seen any convenient way to use it. Have not seen any secure way to keep a wallet.

"Hit" must be more than just being able to generate press and being used by criminals to buy drugs and kiddie porn.

Stop breaking the law (0)

Anonymous Coward | about 2 months ago | (#46294103)

Federal governments reserve the right to print currency for a damn good reason.

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