Amazon launches virtual currency

Amazon Coins, which allow customers to buy apps and games is part of the company's bid to expand sales of digital content.
Written by Kirsten Korosec, Contributor

Amazon launched its version of digital currency today by depositing 500 free "Coins" (which have a value of $5) to existing and new Kindle Fire customers in the U.S.

The so-called Amazon Coins can be used to purchase apps, games and in-app items in the company's Appstore and on Kindle Fire. The move aims to expand sales of Amazon's digital content--products which don't have to be warehoused or mailed, making them important generators of revenue.

Amazon is giving discounts of up to 10 percent for purchasing the virtual currency in bulk, the company said. Appstore developers will still earn their standard 70 percent revenue share when customers make purchases using the coins, said Amazon.

Virtual currency has garnered a lot of attention and investment dollars in the past year.

Bitcoin, a digital currency invented in 2009 which can be used to make untraceable payments over the Internet without involving a financial institution, has attracted a growing number of small merchants. Even Ebay is reportedly looking at ways to integrate Bitcoin into its PayPal payments network, reported WSJ.

Bitcoin startups, such as Coinbase, Coinsetter, OpenCoin and CoinLab have raised millions in capital from venture capital firms. Coinbase, an online platform that allows users to buy Bitcoin, announced last week it raised $5 million in real capital to help it cover operating costs and hire engineers, designers and business-support staff.


This post was originally published on Smartplanet.com

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