Bitcoin Forum

I've mentioned this in a minor post on another thread but thought it deserved it's own thread.

There's discussion of alt coins success devaluing BTC because it shows that anyone* can just take the Bitcoin protocol, tweak it a bit and create their own blockchain.

The defence is that Bitcoin has first mover advantage because of the network effect.

However when I say *anyone, that's not quite true unless you offer something over and above BTC but I can think of some entities that could easily outpower Bitcoin if they move quickly and push it to the public.

If I was Amazon, right now I would be developing my own block chain in their cloud with the first blocks being offering for free to customers with the promise that the 'codes' can be used for purchases of goods later or given as gift vouchers.

With Amazon's audience that would take off pretty quickly among people who've never heard of Bitcoin. Once that takes off open up a simple market place and people could buy and sell the 'vouchers' by sending the address, a la Instawallet. Bang, Amazon and all their merchants accept 'Customer Loyalty Coin' as payment.

The general public would trust them way more than an anonymous crypto currency that the news has told them is made by hackers and used by drug dealers.

Repeat for Apple, Ebay, Google Play and Bitcoin is relegated back to the black market. Still a big market but now easily outlawed.

If they aren't doing this then someone who knows the code should be offering this as a customer loyalty service to any consumer website using their own alt coin.

I'm tempted to do it myself but I haven't done any C++ for years and don't have the time. If this idea makes anyone rich please donate a few BTC to 1zL3V6FCwqudH4LeNU8fSKXnp7KwFAoej

 ;D

I'm going to bump this again because nobody has given a good answer as to what is to stop Amazon (or eBay) creating their own alt currency and it becoming a serious rival to BTC in the role of online payment mechanism to everyday purchases?

Nothing is stopping them, and cause they are big with reputation, they could easily create their coin with millions and billions of dollars to back it up and get it up and running and then everyone would flock to them.

Nothing would stop them apart from the fact that if it is entirely mined by them it is essentially a centralised e-currency (and if you are going to have that then why bother with the mining at all as it is much cheaper just to "print your own" tokens).

I was thinking they could open it up once it was established, maybe partnering with other retailers and tracking what people are buying. They'd then get the seigniorage of being first adopters as well as the legitimacy of it being open and tradable and accepted by other retailers.The government would probably might even assist them.

I'm just saying that this would greatly affect the value of Bitcoin if they did it right.

You understand Amazon already tried their own coin:
https://developer.amazon.com/post/Tx2EZGRG23VNQ0K/Introducing-Amazon-Coins-A-New-Virtual-Currency-for-Kindle-Fire.html

People did not "flock" to it.
I know this is not a decentralized secure currency so doesn't really compare to bitcoin, but as someone else pointed out it if is entirely mined by Amazon then non of that really matters.

Interesting. Didn't know they were already trying. I agree that this will fail because it's too restrictive. Maybe they'll learn to not be so controlling and greedy and try again.

+1.  The biggest thing stopping them is miners--they don't have any. The entire BTC economy works because (many independent) entrepreneurs and tinkerers are busy mining away, keeping the network alive and essentially creating the value that bitcoins have.

Normal computer users most likely won't (can't?) get into mining, which would make an Amazon system one-sided (as stated!).

I guess the only company that could maybe do it would be Apple, by introducing a super user-friendly mining app downloadable from iTunes and somehow getting the average mac user interested in mining. But that also seems like a tough PR push (and I can't imagine anyone buying "apple coins"--if mac users want to buy hardware from apple they will just spend USD, and if they want to invest in something they'll download a stock trading app from iTunes!).

I agree that the proof of work is the barrier that they'd have to get through. That's what I meant by opening it up, allowing anybody to mine them just the same as Bitcoin once it got established and the difficulty was sufficient. At the same time I can see the PR trouble that would cause so yeah, another perceived threat to Bitcoin bites the dust.