Forget Bitcoin: Kanye West-inspired digital payment set to launch in January as eBay files patent to roll out virtual 'gift tokens'

• Coinye West to launch on 11 January as a ‘cryptocurrency for the masses’
• It will rival Bitcoin, plus newer currencies such as Litecoin and Dogecoin
  
• Value of Bitcoin rose to $1000 (£613) last year and is now worth $850 (£520)
• Virtual currencies let people make payments anonymously
• eBay's PayPal has also filed a patent for a digital currency that would let people shop without setting up an account
  

By Ellie Zolfagharifard

Published: 11:06 EST, 3 January 2014 | Updated: 07:54 EST, 6 January 2014

Kanye West seems to be constantly comparing himself to god-like deities and kings.

It’s only fitting then, that the rap artist was the inspiration behind the latest virtual currency based on the increasingly-popular digital tender, Bitcoin.

Named ‘Coinye West’, the idea wasn't put forward by the rapper but instead was created by an anonymous group who want to launch a ‘cryptocurrency for the masses’.

Change: The currency was initially called Coinye West but was changed to just Coinye

The group is reported to have offered Kanye 100,000 Coinye if he makes contact before its 11th January launch.

Speaking to music site Noisey, one founder said: ‘I can picture a future where Coinye is used to buy concert tickets, with cryptographically verified virtual tickets, and other ideas I can't give away just yet.’

‘It will get people who are on the fence interested and help them to start using the currency, and we hope they'll share it with their friends, too.’

Earlier today the CoinYeWest.com website was taken down, prompting reports the currency may have been stopped in its tracks. However, it is now back online. 

Kanye West pictured with fiancee Kim Kardashian. The idea for Coinye West wasn't put forward by the rapper but instead was created by an anonymous group who want to launch a 'cryptocurrency for the masses'. The group is reported to have offered Kanye 100,000 Coinye if he makes contact before the currency's launch

A patent application by eBay, the parent of PayPal, suggests that the company is also making plans for its own digital currency

WHAT IS BITCOIN CURRENCY?

Bitcoin is a distributed peer-to-peer digital currency that functions without any central authority, such as the Bank of England.

The currency was launched in 2009 and is traded within a global network of computers.

Bitcoins can be bought with near anonymity, which supporters say lowers fraud risk and increases privacy.

But critics say that also makes Bitcoins a magnet for drug transactions, money-laundering and other illegal activities.

A Bitcoin investor, Norwegian Kristoffer Koch, recently made more than half a million pounds after he forgot he bought £17 of currency four years ago.

With a tagline of ‘we ain't minin', we pickin’, Coinye West will be the latest virtual currency to launch as a rival to Bitcoin.

The value of Bitcoin rose to over $1000 (£613) last year but is currently worth around $850 (£520).

Other alternatives to Bitcoin which have recently sprung up include Litecoin, Namecoin and PPCoin and Dogecoin.

Meanwhile a patent application by eBay's PayPal suggests the company is making plans for its own digital currency, according to a report in Bitcoin Magazine.

The patent, made in 2012, is for a something known as a ‘gift token’.

‘A gift can be given from a user of a payment provider to a gift recipient,’ according to U.S. patent application.

‘The recipient can be a member of the user’s family, a friend, or any other person or entity.

‘The recipient can use the token to purchase a product using a checkout through the payment provider.’

The group is hoping to use the idea of gift tokens alongside PayPal, which has been the company’s payment arm since it was acquired in 2002.

Interestingly, the application also suggests that the tokens may be used outside of PayPal to encourage wider adoption. 

The value of Bitcoin rose to over $1000 (£613) last year but is currently worth around $850 (£520)

According to the application: ‘The purchase can be made without requiring the user to create the user’s own payment provider account.’

PayPal president David Marcus is reported as saying Bitcoin is a part of 'the future of money', but he doesn’t think it is a currency yet because its price fluctuates too much.

If eBay introduces the virtual currency, it will follow its rival Amazon, which launched Amazon Coins a year ago.

One Bitcoin expert urged caution in investing in new virtual currencies that were, as yet, untested in public use.

Johnathan Turrall, chief technology officer at Metalair, a cryptocurrency start-up based at the University of Sussex described recent Bitcoin alternatives as ‘pump and dump’ operations.

‘In one case, the original developers launched on obscure websites, but when they took it mainstream, and the price spiked, they sold up and disappeared. Estimated earnings in one instance were $800,000,’ he told the BBC.

Silk Road, which allowed users to trade in illegal drugs, required transactions to be made using the virtual currency Bitcoin

Unlike traditional banking, Bitcoin and its rival virtual currencies, can be bought with near anonymity which supporters say lowers fraud risk and increases privacy.

But Bitcoin has also been linked to illegal purchases, and its value dropped last year following the creation of the clandestine Silk Road online marketplace.

Silk Road, which allowed users to trade in illegal drugs, required transactions to be made using the virtual currency.

It remains to be seen whether these alternative currencies will solve or exaggerate some of the problems facing Bitcoin.

But one thing is for certain, the popularity of the virtual currency has led to serious rivals thinking twice about their payment methods.