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

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."

Comments

Not the Same

[SuperKendall]

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

Re:Not the Same

[msauve]

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

[Ralph Wiggam]

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:MS got rid of MS points

[king neckbeard]

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.

Muckraking and FUD, move along, nothing to see.

[DerekLyons]

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.

[AthanasiusKircher]

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.

BitCoin has complete record of transactions.

[140Mandak262Jamuna]

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.

[subreality]

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

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/... . 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:Do we care?

[bonehead]

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.