Amazon has expanded support for its Amazon Coins crypto-currency from Kindle Fire tablets to Google Android mobile devices.
Customers can start using Coins (which are worth a penny; 100 Coins equal $1) by downloading Amazon’s app store to their device; existing currency balances will freely transfer between the Kindle Fire and an Android tablet or smartphone. Amazon will still pay developers 70 percent of revenues earned from sales of apps and games, whether the customers use Coins or “conventional” cash.
In its press release, Amazon positioned its crypto-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. “I balance every single purchase I make, so writing down a silly 99 cent purchase my kids make can be annoying,” the company quotes one anonymous customer as saying. “I buy $10 worth of Coins every few months and I save 50 cents and I also don’t have to write down little purchases, so this is a win, win for me.”
Expanding the currency’s reach is also a potential win for Amazon, which wants to create an end-to-end ecosystem for app developers. Between mobile ads, in-app purchasing, online merchandising APIs, and AWS offerings, Amazon now offers a fairly substantial toolkit for software builders—and if Amazon Coin takes off, it could help draw developers that much tighter into the company’s fold. In theory, expanding Coin support could also encourage Android users to download Amazon’s app store.
But Amazon Coins could alienate the 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. (Bitcoin relies on a decentralized P2P network to send payments, and it lacks a “central bank,” which can lead to other issues.)
Genuine crypto-currency can also 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. Contrast that with Amazon Coins, which is still limited to purchasing Amazon app store products. Indeed, Amazon Coins has more to do with a corporate “currency” like the now-defunct Microsoft Points than an actual crypto-currency like Bitcoin.