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Is Amazon Coin A Cryptocurrency? Everything You Need To Know

Amazon Coin is for all intents and purposes a Cryptocurrency — and to be more specific, a Stablecoin, because it's valued against the United States Dollar. However, there's one fundamental difference between Amazon Coin and Bitcoin: the former isn't hosted on the Blockchain. And, it's for that reason that in the real world, it isn't classified as a Cryptocurrency; it's regulated and can be shut down by one entity.

Developed by Amazon in 2013, Amazon Coin is used exclusively on the Amazon App Store. It was developed to allow Android and Kindle owners to hold a digital balance that can be spent on applications, books, movies, and other software — eliminating the need to debit their credit card whenever they wanted to download something new. The service later evolved to allow customers to send Amazon Coins to other users.

Just like most Stablecoins, such as Tether (USDT) or USD Coin (USDC), Amazon Coin is backed by the US Dollar. Although, in Amazon's case the ratio is a bit different. While 1 USDT is equal to 1 USD, 100 Amazon Coins are equal to 1 USD. But the USD value isn't something the average user ought to consider or even pay attention to after they've accumulated an Amazon Coin balance, but it's still important to the end recipient.

Related: How To Mine Your First Bitcoin

To be clear, the end recipient isn't the person who holds the Amazon Coin balance, or the friend they're transferring funds to, but rather the developer who will ultimately be awarded the balance when someone eventually purchases their software. When a customer buys something with Amazon Coins, the developer is paid in fiat currency, like GBP or USD, so they need to work out how many Coins to offer their software for.

In a nutshell, if Amazon Coin wasn't regulated and was hosted on the Blockchain, it would be a Cryptocurrency — but it isn't. It's moderated from all angles. For example, currency can't be transferred off the platform, or exchanged back to USD (by standard users). To that end, the supply is unlimited; it's a simple exchange. You hand over $5 and Amazon gives you 500 Amazon Coins that can only be spent on specific things.

It's no different to buying tokens at an arcade.