Amazon coins: A brilliant 1st stab at digital currency

Soon Kindle Fire owners will be able to purchase apps using virtual money.

By TheWeek.com Feb 6, 2013 9:52AM
Amazon.com logo Spencer Platt Getty ImagesMeet the Amazon coin.

You won't be able to throw it in a piggy bank, but Amazon (AMZN) hopes its newly minted digital currency will be a hit with users.

Essentially, the coin is the online retailer's first whack at proprietary digital currency. Come April 25, Kindle Fire users will be able to spend Amazon coins on games, apps and other in-app incentives.  

To jump-start the initiative, the company plans to give "tens of millions" of these virtual coins away for free in May so that people can buy real, fully functioning apps from the Amazon Appstore. Customers will still be able to use their credit cards for purchases, if they like. And app developers will still be paid the same 70% revenue share they're entitled to.

Why do it? Amazon vaguely states that the coins are "another opportunity to drive traffic, downloads, and increase monetization."

Or think of it this way: Amazon coins are smart because they work as another incentive to keep hard-fought users locked into the Kindle Fire's ecosystem.

If you have a bunch of coins left to spend, for example, you're less likely to jump ship to an iPad Mini or a Nexus 7 the next time you have to upgrade your hardware. Remember, the company already takes a financial hit (at VentureBeat) with every Kindle Fire it sells -- so Jeff Bezos has no qualms about losing a few bucks to keep consumers locked in for the long-term. (Via CNET, Los Angeles Times)

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8Comments
Feb 6, 2013 1:15PM
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Bravo to Dell for getting out of the Market!!!!!!!!  It's about time that a major company decides that Wall Street's daily bull-crap is too much!  The bull on Monday with the Europe stuff was so ridiculous and totally not needed.  If there ever was an institution that was corrupt it is the Stock Market in general. The government wants to find people to investigate well maybe they should take a harder look at Wall Street. If it sounds that I don't like all the crap that Wall Street uses to get people to buy and sell stock then bingo, you hit the nail on the head!  Once again, bravo to Dell for having the balls to get out of Wall Street.
Feb 6, 2013 12:08PM
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it not currency if limited what you can buy with it. it is a point system. 
Feb 6, 2013 1:47PM
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I prefer real fake money rather than fake fake money. Then again the fake fake money may be more real than the real fake money. Let me know when they start giving out real gold coins. They way B likes to throw around money, it may happen.
Feb 6, 2013 12:47PM
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Bit coin has been hacked in the past.  Smart to create their own model as opposed to something that is flawed.
Feb 6, 2013 2:03PM
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That's just what we need Amazon, Google and WalMart currencies and exchange rates.
Feb 6, 2013 12:20PM
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Wonder why they didn't go with BitCoin? BitCoin is the most popular virtual currency with 200 million dollars worth in circulation. Seems Amazon has an open door they failed to use...
Feb 6, 2013 12:53PM
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Enlighten customers should avoid these kind of promos. Free, no down payment all that gets you into something you may regret tomorrow.

 

This is the way we are losing our economic, political and social freedom. It is a bait and not really help. Once you are in their fist, you can scream but it is hard to turn clock back.

 

There should be law that conditions should not be onerous and customer should have freedom to walk away at ay time without penalty at their own choosing.

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