Amazon, the e-commerce giant, has launched Amazon Coins, a virtual currency for use within Amazon's Appstore, and to encourage its use, the company is giving every Kindle Fire user 500 coins, worth $5, in their Amazon accounts. Amazon announced the currency in February.
Those coins can be redeemed for applications, games and digital items within applications and games. The company is also offering an escalating discount of up to 10 percent on Amazon Coins when customers buy coins in $5, $10, $25, $50 and $100 blocks.
"We will continue to add more ways to earn and spend Coins on a wider range of content and activities-today is Day One for Coins," Mike George, vice president of apps and games at Amazon, said in a written statement.
But day one for Amazons Coins has also had its detractors. Lee Hutchinson, writing for Ars Technica, explains the virtual currency, and others like it, locks user money into an ecosystem where they may not have shopped otherwise by selling coins it a block format. If a user purchases a $5 block of coins for a $0.99 application, they'll still have $4.01 locked up in Amazon Coins.
"From Amazon's perspective this is fabulous," Hutchinson writes. "Every unused Amazon Coin in your account is a little interest-free loan you've been kind enough to extend to Amazon."
Amazon has since said the company doesn't plan to mandate the use of Amazon Coins in its Appstore, saying the virtual currency will remain an optional method of payment.
Virtual currencies aren't new, nor rare. Microsoft's virtual currency, Microsoft Points, for use on its Xbox 360 video game console, a practice quickly emulated by other console manufacturers. The result of these virtual currencies have been mixed at best, according to The Verge.
More recently the Bitcoin, a liquid virtual currency capable of being used for a variety of purposes, has made headlines for its fluctuating value and black market associations. That currency, however, isn't locked to any one particular e-commerce environment.
Kindle Fire developers don't have to worry about a cut in profits on Amazon's Appstore, however. The company said developers will still receive their 70 percent cut when users make purchases with Amazon Coins.
