Amazon is not interested in embracing bitcoin, but it is looking into new digital payment services, possibly a service developed in house, a new report suggests.
Amazon payments head Tom Taylor told Re/code that the company did indeed consider bitcoin, but eventually decided that there was not enough interest in the technology for Amazon to benefit from adopting it.
“Obviously, it gets a lot of press and we have considered it, but we’re not hearing from customers that it’s right for them, and don’t have any plans within Amazon to engage bitcoin.”
Amazon’s revenue in 2013 was almost $75bn, while the market cap of all bitcoins ever created is roughly $5bn.
Amazon has more pressing issues
Taylor pointed out that Amazon has bigger goals at the moment than experimenting with digital currencies. For example, he noted that Amazon needs to deal with foreign exchange rates and other issues affecting sellers.
The Amazon exec admitted that a global currency has some advantages, and that credit card companies are not supplying enough information that could help merchants better understand customer behaviour.
When asked whether Amazon would ever launch a service that would compete against big brand credit cards, Taylor said Amazon would only if it felt confident that it could do a better job than American Express and Visa.
He added that the service would have to be “something much better” than what is already available.
Re/code’s Jason Del Ray cited industry sources who believe it is only a matter of time before Amazon launches its own payments service, but the company is not saying much for the time being.
Amazon’s payments history
Interestingly, Amazon started experimenting with its own digital coins last May.
Amazon Coins were handed out to buyers of Kindle Fire tablets and could be used to purchase apps and various virtual items on the company’s app store.
Of course, Amazon Coins were never envisioned as a currency or as an alternative payments system, they were basically a way of boosting customer loyalty and promoting the Amazon Appstore. Although Amazon’s tablets are Android-based, they run a tweaked version of Google’s mobile operating system and don’t feature access to the Google Play Store.
Amazon is rumoured to be working on one or more smartphones that should use the same approach as its Kindle Fire tablets, so the company has a good reason to promote its closed app ecosystem.
Bitcoin not seeing interest from big brands
Earlier this year, Overstock became the biggest US retailer to accept bitcoin, and two months later the company announced that its bitcoin sales had surpassed $1m. Overstock CEO Patrick Byrne said the biggest surge came on the first day of bitcoin sales, but the company also saw gradual growth in bitcoin sales on a week-by-week basis.
TigerDirect joined the bitcoin club a few weeks after Overstock. The results were similar, the tech retailer surpassed $1m in bitcoin sales in less than two months. TigerDirect director of marketing Steven Leeds told CoinDesk that the overwhelming response validated the company’s decision to embrace bitcoin.
Still, outside of these examples, and a handful of rumours, merchant adoption has not seen the traction some predicted at the start of the year.
Amazon’s arch rival eBay is staying away from bitcoin, too, but at least it is allowing users to sell their bitcoins and bitcoin-related merchandise through its classifieds.
Walmart Ends Gyft’s Walmart Gift Cards; Fellow E-Commerce Giant Amazon Also Shuns Bitcoin
3 weeks ago, I had the pleasure of writing an article I’d dreamed of writing for months and months on end. Gyft Adds Walmart Gift Cards!! Alas, all good things are not meant to last. For the last 3 weeks, Bitcoiners around the country have had the pleasure of buying Walmart gift cards with Bitcoin, receiving 3% back in the form of Gyft points, and in essence spending Bitcoin at Walmart on gas and groceries. Making Bitcoin a cheaper option to buy gas has been a long standing dream of the Bitcoin community, this was the first step towards realizing that dream and said step has now been reversed. Despite the loss of Walmart, Gyft is geared to provide more to smaller businesses with the launch of Gyft Cloud.
Gyft informed customers via email that “due to reasons outside of Gyft’s control” they are unable to stock Walmart gift cards any longer. The Bitcoin community knows full well that Vinny at Gyft would not unlist Walmart Gift cards from Gyft’s impressive registry unless he was forced to. There is no doubt in my mind that the initial decision that has culminated in today’s end of Gyft’s support of Walmart was originally made in Arkansas at Walmart HQ.
Walmart Gift cards are no longer available for Bitcoin
Amazon isn’t alone in this stance among big e-commerce sites. EBay, Walmart.com, Target.com and other big names have shown no signs of moving toward acceptance. Probably the most well-known online seller to accept the digital currency is Overstock.com, which sells furniture online and has a comparatively modest market cap of $413 million.
Compared to Overstock and Tigerdirect, Amazon and Walmart are much much larger. It seems that they have both dismissed Bitcoin as an annoying fly, not worthy of real attention. Amazon’s Payment Team head Tom Taylor also told Recode that:
“…we’re not hearing from customers that it’s right for them and don’t have any plans within Amazon to engage bitcoin.”
As revealed by industry sources close to Amazon and hinted at by Amazon’s Payment Team, Amazon may be stepping into the financial sphere soon to contend with Visa/Mastercard/AMEX/Paypal, as opposed to just paying their usurious fees. Some readers will remember that Amazon previously released Amazoncoins as part of a QE program to stimulate app development for their Kindles. Amazon seems to have turned their back on Bitcoin; however, they are clearly still open to the concept of “Digital Currency.” Facebook just might be the same way.
Marc Andreessen is a Facebook board member. He is also a firm believer in Bitcoin. He might be one of the reasons why Facebook will add Bitcoin payments in the future.
The price of Bitcoin is soaring today. We already have some theories about this being discussed here. Among some positive messages, something else was made public today. Something involving Facebook and e-money services, according to the Financial Times. Don’t start packing for the moon just yet, there is no guarantee Facebook is thinking about accepting Bitcoin. There are some reasons why it might be, though.
Facebook and the Bank of Ireland
Facebook has become one of the biggest enterprises in the world since Zuckerberg invented it in his Harvard dorm room. What started out as a ‘simple’ social media website, has now expanded into a vast place where many things are possible. Facebook has acquired several promising startups, making sure it is always a step ahead. Zuckerberg has a clear view on what Facebook is now and what it should become in the future. The near future clearly consists of optimal mobile integration. The buying of Whatsapp and Instagram indicate this, as well as his own words. He said the mobile industry is the most important aspect of Facebook’s plans. Recently, the social network also bought Oculus VR, a promising virtual reality enterprise.
Right now, it seems like Facebook is getting ready for another new technology. The company is readying itself to provide financial services in the form of remittances and electronic money. It seems the website is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process.
So, Ireland… Several people already asked the question why it would be important to ask authorisation in Ireland. It seems the Central Bank of Ireland can authorize Facebook to become an “e-money” institution. This would allow them to issue units of stored monetary value that represent a claim against the company. This e-money would be valid throughout Europe via a process known as “passporting“.
To further state their interest in electronic money services, Facebook has also discussed partnerships with at least three London startups that offer international money transfer services. These startups are TransferWise, Moni Technologies and Azimo.
Who trusts Facebook?
All of this sounds very exciting, but it does not come without question marks. The first question Facebook should consider is: how many people are willing to put currency on Facebook? Whether true or not, Facebook is regarded by many people as a puppet of the NSA. There’s already so much of our data publicly available, adding financial information would be like putting out the final secrets of your life for every authority to know. Recent developments have shown that secrets do not exist anymore, especially on the internet. Facebook will have some serious convincing to do if it wants people to believe their money is safe with them.
A second question, perhaps the most important one for the cryptocurrency world. Facebook talks about e-money, not about Bitcoin. Some people think Facebook has a different strategy in mind. Maybe more like Mpesa, the mobile-phone based money transfer and microfinancing service for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania. Or Facebook might launch its own cryptocurrency? That’s doubtful, since Bitcoin is the major one. Something like Facebook coin does not sound very promising but who knows…
On top of that, the companies Facebook has allegedly closed partnerships with, have little to do with virtual money. They simply offer transfer services for fiat currencies. That does not mean anything because Facebook would allow all kinds of money. The company would never go for the addition of Bitcoin and nothing more. Still, there was no cryptocurrency enterprise present in this list.
On the other hand, Zuckerberg has always been interested in what the Winklevoss twins were up to. It is not secret that these entrepreneurs have heavily invested in Bitcoin. That will have sparked Zuckerberg’s interest. He will have thought about the concept already, and he may be waiting for the right moment to implement it.
Perhaps the most important reason Facebook would consider Bitcoin integration is the presence of one Marc Andreessen. This entrepreneur is a Facebook board member and an investor in Coinbase through his firm Andreessen Horowitz. Andreessen is known to have some serious influence in Silicon Valley. He is a respected authority in the field of technology, and he may just be the person Zuckerberg is willing to listen to.
In any case, this move by Facebook leaves room for much speculation. Nothing is certain yet, but there seem to be some strong indications toward Bitcoin adoption. It may not happen straight away, but if it does (and I believe, at some point, it might), this will be a giant leap for Bitcoin. Keep an eye on this one, Marc might surprise us this year…
Do you think Facebook will integrate Bitcoin at some point? Let us know your thoughts here.
BTC-e was down briefly on Sunday, following a powerful distributed denial of service (DDoS) attack against its servers.
DDoS attacks against bitcoin exchanges have gained notoriety since the ‘massive and concerted’ attack which targeted multiple organisations earlier this year.
However, in the current climate of uncertainty even a harmless attack can be misinterpreted, with speculation spreading like wildfire on social media. Luckily BTC-e was quick to confirm the attack and dismiss fears – it was just another DDoS attack, now all too common in the world of bitcoin.
At press time BTC-e was back up and running with more than 4,000 users online. The exchange told CoinDesk that DDoS attacks happen periodically and that there is nothing special about the latest one.
“Our networking team responded quickly and it is fixing the problem,” BTC-e said, adding:
“We don’t consider it as an important problem, as there is a workaround to fix it quickly.”
This was apparently a minor outage, with no security breach.
Non-DDoS technical issues
BTC-e has faced its fair share of technical issues not related to malicious activity. Back in December, the exchange suffered from lengthy processing delays which also led to concerns. BTC-e is operated by an anonymous team of Eastern European developers, hence many users were suspicious that some foul play was involved.
However, at the time the exchange told CoinDesk that the problems were the result of a sudden surge in the number of users. BTC-e has since hired more staff to cope with the extra workload and the exchange claims it has not face any more serious problems – aside from the occasional DDoS attack, of course.
The BTC-e team still insists on anonymity. However, judging by its market share, most users don’t seem to mind at all.
Facebook wants to be more than a social network — it is planning to facilitate financial services in the form of electronic money and remittances, the Financial Times reports (as spotted first by Benedict Evans).
The report cites sources as saying that Facebook is weeks away from getting regulatory approval in Ireland for a service that lets users store money on Facebook and use it to pay others — what’s known as “e-money”. This means that Facebook will be able to issue units of stored monetary value that represent a claim against the company, and the e-money can be used throughout Europe in a process known as “passporting”.
Facebook is also said to have had talks with at least three London startups offering international money transfer services online and via mobile: TransferWise, Moni Technologies and Azimo.
A Facebook spokesperson tells TNW that it is “not commenting on rumor or speculation.”
E-money and remittances would help Facebook be more relevant in emerging markets and build up its momentum to push into these markets. Last week, for example, Facebook passed 100 million users in India. Already, Chinese Internet giants including Alibaba and Tencent have rolled out mobile payment initiativesas they seek to tap on e-commerce by replacing traditional payment methods to ease the friction of paying without bank-issued credit cards.
This week on CCN, we learned about the massive Heartbleed bug, the potential future of Bitcoin with sidechains, SecondMarket’s new bitcoin investment fund, exciting new Bitcoin services, and more. Check out some of our top stories this week (7 April – 13 April) on this CCN Week in Review
Hacker Exploits Heartbleed Bug in BTCJam Heist
A programming error in OpenSSL versions 1.0.1 – 1.0.1f is causing panic across the Internet.
Heartbleed is a very serious vulnerability in the OpenSSL cryptographic library. OpenSSL is used practically everywhere on the web by major companies including Facebook, Google, twitter, and others. Due to a simple programming mistake in OpenSSL version 1.01 through 1.01f, a hacker can steal information that would usually be encrypted, such as login credentials, emails, instant messages, and more. Most big-name companies have patched the vulnerability by now, and recommend users to change passwords. However, the popular bitcoin lending network BTCJam was hacked before the company could patch the Heartbleed bug. Twelve accounts were compromised and had about 42 bitcoins stolen. According to BTCJam’s official statement, Heartbleed was indeed used in this heist, and BTCJam has updated their SSL certificate to patch the exploit. Furthermore, all accounts have been compensated to their original states and no user has lost bitcoins as a result of this.
Sidechains Are the Future of Bitcoin
Bitcoin sidechains could be used to replace that hundreds of altcoins and “Bitcoin 2.0″ platforms that have popped up over the past few years.
There are literally hundreds and hundreds of altcoins. Although some are quite innovative, such as Mastercoin and Zerocoin, most altcoins offer little to no benefit over Bitcoin (my personal opinion). Bitcoin developer Adam Back and entrepreneur Austin Hill believe that there’s no reason to create new altcoins when we already have Bitcoin. Instead, they believe that all the cool features of altcoins can be combined into one ecosystem inside the Bitcoin network through the use of sidechains. Sidechains would allow more innovation within the Bitcoin network. Bitcoin doesn’t get very many new features on a regular basis because one small bug can collapse the entire system. However, sidechains would allow for new features without putting the entire system at risk. As CCN writer Kyle Torpey states, “If something goes wrong on one of the sidechains, only the bitcoins in that sidechain are lost, and the entire Bitcoin network can continue to flourish.” Sidechains would provide a solution more elegant than creating a new altcoin for every new innovation. Because of this, sidechains might just be the real Bitcoin 2.0.
SecondMarket Plans to Launch New Bitcoin Investment Fund
Wall Street is ready to pounce on bitcoin.
The New York-based trading platform SecondMarket already launched a bitcoin fund for wealthy investors last year. But now, SecondMarket has announced that it intends to launch another bitcoin investment fund this year for ordinary, less sophisticated investors. The new Bitcoin Investment Trust (BIT) will trade on OTCQX and OTC Markets. Some bitcoiners might ask the question, why invest in a fund when one can simply buy real bitcoins? CCN’s PJ Delaney offers this response:
“Few reasons, (1) many people familiar with investments and shares have no knowledge of bitcoins and want to get on board the bitcoin express, This is a simple way to benefit from future growth without having to set up brokerage accounts, looking into mining, etc., People want in and they want that in to be simple.
(2) After Mt Gox, people don’t trust many of the exchanges, a mainline fund will give a greater level of security to new investors with the assurance given by ivesting in your own country rather than one in a different continent…. that you can’t sue.”
Essentially, investing in bitcoins through a credible investment company would minimise quite a lot of risk for investors. And with the current low price,
“make no mistake, Wall Street is waiting to pounce, and they didn’t get to where they are by buying at too high price, so let’s not sell up just yet.”
Bitinvest Launches Prepaid Bitcoin Debit Card
Coincard is a prepaid debit card you can charge with bitcoins.
This week on CCN, we covered two very interesting new bitcoin services, the first of which isCoincard. Brazilian bitcoin exchange Bitinvest recently announced Coincard – a prepaid MasterCard debit card that can be loaded with BTC. Using Coincard is incredibly simple. Cardholders deposit bitcoins into a unique bitcoin address and Bitinvest converts the coins to Brazilian Reais. If users want to withdraw unused funds, Bitinvest can convert Reais back to BTC. The only catch is that Coincard is exclusively available in Brazil. However, that’s still nearly 200 million people who can now use bitcoin practically anywhere in their country. Furthermore, Brazil will see an increase in tourism this summer with FIFA 2014, which will allow international bitcoin users to spend their coins in Brazil.
Bitcoin Insanity: Buy Bitcoins with Credit Card and PayPal
Bitcoin Insanity offers BTC for credit card and PayPal
It’s uncommon to see services letting users purchase bitcoins with credit card and/or PayPal. This is simply due to chargebacks. Buyers can claim some sort of breach of contract, and banks can reverse payments made to sellers’ accounts as they typically side with the buyer. However, bitcoin transactions are inherently irreversible, which leaves sellers at risk for fraud since they have no way to disprove buyers’ allegations. As a result, bitcoin-for-credit-card services are rare, and any company offering such a service might just seem…insane.
“Bitcoin Insanity manually process payments after they pass through the PayPal or Mijirehcheckout, leveraging their fraud detection routines and financial partnerships to minimize their risk. At this time, purchases are also limited to one per customer per day. ”
Bitcoin Insanity’s convenience and fraud protection does come at a cost, however. Prices are higher than the current exchange rate. For instance, at the time of this post, 0.018 BTC = $7.32 USD, but on Bitcoin Insanity, 0.018 BTC costs $10.00. The markup isn’t too bad, and it’s necessary to offset the occasional loss to fraud.
Mark Karpeles Faces Immediate Arrest in the United States
If he would set foot on American soil, Mt. Gox CEO Mark Karpeles would likely face an immediate arrest.
“I assume he would be arrested as a person of interest…The FBI would likely want to question Karpeles about alleged fraud at MtGox, which collapsed in February, or about connections he may have to that other notorious online marketplace, Silk Road.”
-Roger Townsend of Breskin Johnson & Townsend PLLC