Amazon says no to Bitcoin

April 15, 2014 | 10:41

Tags: #cryptocurrency #currency #financial #satoshi-nakamoto #sha256

Companies: #amazon #bitcoin

Amazon has indicated that it's not going to join in the cryptocurrency revolution by adding support for Bitcoin to its payment system, even as increasing numbers of its competitors do exactly that.

Bitcoin, created by the pseudonymous Satoshi Nakamoto in 2008, is a distributed, decentralised cryptocurrency based on proof-of-work principles: set your computer generating SHA256 hashes for transaction validation and you'll get rewarded with Bitcoins of your very own, generated at an ever-decreasing rate by the algorithm itself. The cryptocurrency is free from governmental control, anonymous yet entirely traceable - until you attempt to convert Bitcoins into fiat currency or vice-versa, of course - and runs on a decentralised system of volunteer computers.

It sounds remarkable, but Bitcoin's meteoric rise from being worth fractions of a penny to a high of more than $1,000 per coin has been fraught with difficulties. Amateur coding errors in major Bitcoin exchanges like MT Gox - originally set up to be a trading site for Magic: The Gathering cards, hence the name - has led to the loss of millions of dollars in Bitcoins and a significant drop in their value on the open market. For every country like the US which is making its laws more Bitcoin-friendly, there are countries like China which have banned the use of the cryptocurrency outright.

In the UK and US, increasing numbers of retailers are accepting payment in Bitcoin - largely out of a hope that it will continue its rise in value, recover from the recent slump and make yesterday's £50 payment double in value or more. Amazon, however, has said it won't be joining the revolution. 'Obviously, it [Bitcoin] gets a lot of press and we have considered it,' Tom Taylor, head of Amazon's payments arm, told Re/code in a recent interview, 'but we're not hearing from customers that it's right for them and don't have any plans within Amazon to engage Bitcoin.'

At the time of writing, a single Bitcoin was valued at just shy of £300 - a significant dip from its high of more than £600 before the recent crash.
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