Facebook Inc (FB), Amazon.com, Inc. (AMZN): Here’s Why Bitcoin’s a Horrible Investment Idea

And even when a currency has a juggernaut like Facebook Inc (NASDAQ:FB) behind it, it can fail to meet expectations. Facebook Inc (NASDAQ:FB) launched its Credits in 2011, but in 2012 announced that it would alter its system. In a post describing the changes, the company stated that “most games on Facebook Inc (NASDAQ:FB) have implemented their own virtual currencies, reducing the need for a platformwide virtual currency.” Its ambitions for a lucrative application currency exchange failed, and many pointed to the difficulty of capturing users’ credit cards and complicated exchange system between cash and credits, and credits and in-game currencies like those in FarmVille.

Amazon.com, Inc. (NASDAQ:AMZN), however, has plenty of credit cards stored. And as it’s much easier for users to spend branded coins, both psychologically and technologically, Amazon.com, Inc. (NASDAQ:AMZN) Coins will help fuel purchases in Amazon.com, Inc. (NASDAQ:AMZN)’s Kindle ecosystem. Additionally, in stride with Amazon’s usual low-margin, high-volume strategy, it plans to give away “tens of millions dollars’ worth” of coins to customers in May.

A poor investment idea
Bitcoin might be fun to gamble on, but as a long-term investment, its current reliance on the largest bitcoin exchange makes it iffy at best. One of the important aspects of bitcoin is its distributed nature, but in its infancy, it has yet to fully realize that value due to a lack of trusted exchanges.

The article Why Bitcoin Is a Horrible Investment Idea originally appeared on Fool.com and is written by Dan Newman.

Fool contributor Dan Newman has no position in any stocks mentioned, but does own 5 bitcoins purchased back in 2011. The Motley Fool recommends Amazon.com and Facebook. The Motley Fool owns shares of Amazon.com and Facebook.

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