Introducing Ripple currency: AMZ - DISCONTINUED AS OF 05-03-2013

[bitaccumulation]

I'd like to test out Ripple with Amazon gift cards.  So, to make this so - the AMZ is born...

1 AMZ is equivalent to 1 $10 Amazon gift card.

I, bitaccumulation () will provide 1 service for AMZ:

1)  I will send 1 $10 Amazon gift card for every 1 AMZ sent to me (free US Shipping).  Alternatively, I can scratch off the card and email you the code (faster).

I will NOT be accepting Amazon gift cards through the mail in return for AMZ at this time.  An acquaintance has 100 $10 gift cards and he has given me 20 of them in return for the first issuance of 20 AMZ's so that this test could take place.  I'm not comfortable taking gift cards from strangers since I don't know how to make sure they are real.   So for now there will be just these 20 AMZ's issued by me and I will not be accepting gift cards via mail.  This is just a test for now.

Notes:

I am not going to make a market in AMZ.  Trust me only for delivery of Amazon $10 gift cards or email delivery of the code. There may or may not be a market for AMZ by other parties.

* In order to handle official bitaccumulation AMZ in ripple, you must trust the address () for an amount of AMZ that you are willing to hold.

* Your trust in bitaccumulation means:
1) You trust me to make sure the Amazon gift cards I receive are real and have the balance stated.
2) You trust me to properly ship the gift cards.

* delivery details: 1 $10 Amazon gift card will allow you to purchase $10 worth of goods from Amazon.com.  NOTE:  These gift cards only work in the USA based AMAZON.com and will not work on other Amazon sites.   For this reason, I will only be shipping the cards to US residents.  Amazon cards do not expire and do not have fees for non-use.    No redemptions will be made for amounts under 1 AMZ.  All redemptions must be done in 1 AMZ increments - I have no current way to redeem fractions of a $10 Amazon gift card.   PM me if this becomes an issue, but I suggest you try to keep any trading you do (if there is a market) in whole units of AMZ for now.

* How to redeem your AMZ: Simply PM me BEFORE YOU SEND THE AMZ TO ME something like the following - "I want to redeem an amount of AMZ, will be coming from address r....., Please send the physical Amazon $10 gift cards to Bob Smith, 123 Maple Street, anytown USA. or alternatively - please email me the code to <email address>"  When I see the AMZ come in, I'll ship them out right away at my expense (or email them to you once I see your message). Think of AMZ as a warehouse receipt for a $10 Amazon gift card. The supply of AMZ decreases with a redemption.

* I have issued 20 AMZ to a 3rd party as the first trade.  A market currently exists in the USD/AMZ(bitaccumulation) and AMZ(bitaccumulation)/XRP  in ripple.

* I am not buying or selling Amazon gift cards.  So please don't ask.

current inventory, 20 $10 Amazon gift cards.

I'd like to acknowledge TTBIT for coming up with the DYM currency and inspiring me to give this a try and also for the format (and much of the content) of this post.  I'm not that creative and it helped a lot to have a template to make sure I didn't miss anything.

[dchapes]

1 AMZ is equivalent to 1 $10 Amazon gift card.

I see why you're doing it that way, setting the divisibility to 1, and I'm not recommending you change it at this point. But, for anyone else considering doing something like this I'd recommend having a "1 XYZ = 1USD of xyz" exchange (or CAD or EUR or whatever) for items that have a face value on them. In otherwords I'd have recommened using 10 AMZ = 1* $10 gift card. So that x*AMZ ~= x*USD and you'd have a redeemption divisibility of 10 for now. That way if in the future if you were to support $5, $10, $25, and $50 gift cards it would be straight forward how to interchange them and the only thing that would have to change is your divisibility on redeemption. All just my opinion of course, maybe others find the 1 => $10 thing easier.

1)  I will send 1 $10 Amazon gift card for every 1 AMZ sent to me (free US Shipping)

Excuse my ignorance, but do Amazon gift cards have a code or something on them that can be used for online purchases? If so is it possible for someone to just ask for you to PM/e-mail them the code and save you the cost/effort of shipping? And also being able to use the code right away without waiting for snail mail.

A market currently exists in the AMZ (bitaccumulation) / XRP  in ripple.

To those interested, there is also (as I write this) an offer SELLing AMZ-bitaccumulation for USD-Bitstamp (as one might have expected). Type AMZ/USD into Ripple's trading interface and enter the appropriate issuers to see the order book and add offers.

Finally, not to steal your thunder, but for non-US people, I'd like to point out Ripple Union's Amazon.ca giftcard exchange and proxy buying services for those that can't make use of US Amazon cards. It apears the limits/fees they charge have changed since I last looked however so for US people bitaccumulation's offer looks to be a better deal. (You can purchase Amazon.ca codes internationally and use them to fund your Ripple account in CAD-RippleUnion and then trade for USD-Bitstamp if you so desired.) Disclaimer: although I'm not affiliated with RippleUnion, I know the operator(s) and have held/traded CAD-RippleUnion in the past. (And again, I don't mean to derail this topic, if anyone has comments/questions about RippleUnion the operator(s) read and post on the Ripple.com forums so I'd point people there instead of derailing bitaccumulation's topic).

[bitaccumulation]

1 AMZ is equivalent to 1 $10 Amazon gift card.

I see why you're doing it that way, setting the divisibility to 1, and I'm not recommending you change it at this point. But, for anyone else considering doing something like this I'd recommend having a "1 XYZ = 1USD of xyz" exchange (or CAD or EUR or whatever) for items that have a face value on them. In otherwords I'd have recommened using 10 AMZ = 1* $10 gift card. So that x*AMZ ~= x*USD and you'd have a redeemption divisibility of 10 for now. That way if in the future if you were to support $5, $10, $25, and $50 gift cards it would be straight forward how to interchange them and the only thing that would have to change is your divisibility on redeemption. All just my opinion of course, maybe others find the 1 => $10 thing easier.

I couldn't decide whether to do 1 to 1 or this way.  The only reason I decided to go this way is that I didn't want people sending me 3 AMZ and me having to tell them they need at least 10 AMZ to redeem (since the cards I have are in $10 units).

However, I see your point as far as looking to the future.  As it stands, I'm pretty sure that the person I issued the 20 AMZ to still has them.  I could have them cancel all their orders in the order book and change the rate of an AMZ if that would work better for the future.  Should I do that?

1)  I will send 1 $10 Amazon gift card for every 1 AMZ sent to me (free US Shipping)

Excuse my ignorance, but do Amazon gift cards have a code or something on them that can be used for online purchases? If so is it possible for someone to just ask for you to PM/e-mail them the code and save you the cost/effort of shipping? And also being able to use the code right away without waiting for snail mail.

This is a good point.  The acquaintance gave me packaged $10 cards so I didn't even think of emailing the codes.  However, I imagine I could open the package scratch it off and just email the code to someone, yes?   If that's the case I'll change the OP to reflect this so that redemption can be quicker.

[dchapes]

I could have them cancel all their orders in the order book and change the rate of an AMZ if that would work better for the future.  Should I do that?

You can do whatever you want   Personally, I think it would be a lot of bother and just confuse things to make changes now so I'd leave it as it is. I was only commenting with my opinion more for any future things you (or others) might issue. And I might be wrong anyway, people may find it easier to deal with it the way you have it (or it might be one of those 6 of one or half dozen of the other things).

[bitaccumulation]

You can do whatever you want   Personally, I think it would be a lot of bother and just confuse things to make changes now so I'd leave it as it is. I was only commenting with my opinion more for any future things you (or others) might issue. And I might be wrong anyway, people may find it easier to deal with it the way you have it (or it might be one of those 6 of one or half dozen of the other things).

Well the issue of divisibility with gift cards in general, might be an issue, no?   If I made 1 AMZ = 1 USD,   then what happens when someone does a trade where they get .37 AMZ?  They can't redeem that, so that would be a problem.  Same goes if they have 3 AMZ (if the rate is 1 to 1).     How can the redeeming issue be resolved in these cases?

[dchapes]

Well the issue of divisibility with gift cards in general, might be an issue, no?   If I made 1 AMZ = 1 USD,   then what happens when someone does a trade where they get .37 AMZ?

The same problem occurs no matter what rate (1 to $10 or 1 to $1) with how Ripple currently works. It also occurs with other currencies, you can owe me 0.00000003 USD in Ripple with no way redeem it; of course with these currencies people just agree to let the sub-cent leftovers float around unredeemed until someone gets >= 0.01 (which, by the way I prefer to places like bitstamp that round their fees up to the nearest cent).

I wonder if custom currencies (true custom currencies, not just using 3 letter codes like now) will support a specified divisibility. On multiswap.net for example I can say something like "I'm trading bushels of apples" and that the smallest unit of that that makes sense is 0.5 (or whatever).

They can't redeem that, so that would be a problem.  Same goes if they have 3 AMZ (if the rate is 1 to 1).     How can the redeeming issue be resolved in these cases?

The simple thing is to do what you and TTBit have said; you'll only redeem unit amounts. As long as you're clear upfront that only multiples of 1.00 or 10.00 or whatever are redeemable then there should be no surprises. If someone gets some left over they can make a trade offer to sell it or buy up to a redeemable unit (because if I have .3 someone else has .7; or several other people have fractions).

If someone is being malicious they could buy up 0.1 from lots of different people and cause some grief.

The Ripple server has a tfFillOrKill flag (see Ripple wiki) that makes sure an order is only fully filled and prevents any partial trades. The client has no way to set this currently, but this might be another way to prevent useless fractions from being traded. However, the flag currently only helps if I buy or sell in 1.0 units; if I try to sell 3.00 and I'd be happy with 1.0, 2.0, or 3.0 (but not 1.5) the flag will only let me sell 0 or 3.

[bitaccumulation]

So it looks like there is a very small market in AMZ/USD in Ripple.  There is at least 1 AMZ for $10/USD-Bitstamp available.  So no premium to exchange whatever you'd like for an AMZ.  Not a bad deal.

The first person to redeem one from me will receive a 500 xrp bonus.   I'm looking forward to seeing how everything works.

NOTE: You can send AMZ to yourself and Ripple will let you know what paths are available (it will allow you to pay with BTC, XRP and whatever paths are available.

[bitaccumulation]

I've discontinued this experiment.  The 20 AMZ's have been returned to me and I returned the cards to the original owner.   The person who took the AMZ's put a few into the market but there were no takers.   I am happy it turned out this way, since someone pointed out that the legality of this (at least in the US) is doubtful - according to a recent FINCEN guidance (see http://cryptome.org/2013/03/fincen-bitcoin.htm), people who "create" virtual currencies and redeem them are considered "administrators" and administrators are money transmitters.  Money transmitters must be licensed.

Here are the relevant parts:

"An administrator is a person engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency."

"An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person.10 FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means."11

            The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies. Accepting and transmitting anything of value that substitutes for currency makes a person a money transmitter under the regulations implementing the BSA.12 FinCEN has reviewed different activities involving virtual currency and has made determinations regarding the appropriate regulatory treatment of administrators and exchangers under three scenarios: brokers and dealers of e-currencies and e-precious metals; centralized convertible virtual currencies; and de-centralized convertible virtual currencies."


This brings up some big questions regarding Ripple.   Anyone in the USA who creates a virtual currency they redeem (even IOUS to your friends) is considered an administrator by FINCEN.   Am I missing something or would this put a serious damper on Ripple?

[markm]

Don't they have some amount of value per year below which you don't have to register?

Its a little strange even that they say "for any reason" instead of something like "as a business".

Get your parents in trouble by having them mail for you a gift certificate to granny!

-MarkM-

[bitaccumulation]

Its a little strange even that they say "for any reason" instead of something like "as a business".

In all fairness, the definition of an "Administrator" is defined as a " ...a person engaged as a business ..."  but how will "engaged in business" be determined?   If you collect a fee every time an IOU is moved in Ripple, I'd imagine they would consider that as "engaged in business."  

These regulatory agencies don't like loose ends.  They want everything under their thumb and I'm interested in how Ripple will be able to stay out from under that thumb.    It would be nice if these new technologies could  keep the barrier to entry for the average guy -  LOW.