|
Resources:
e-gold is a digital gold currency and online payment system
operated by e-gold Ltd. since 1996, which allows the transfer
of money between e-gold account holders, and is also a means
of investing in gold and precious metals. There are a little
under 2.4 million e-gold accounts in existence today.
The e-gold payment system offers a variety of currencies,
"e-metals", namely e-gold, e-silver, e-platinum
and e-palladium, representing a claim in gold, silver, platinum
and palladium respectively. Of these, e-gold is by far the
most popular e-metal in the system. The user may take physical
delivery of the precious metal upon payment of an additional
fee. However, most users permit the operator to retain possession
of the metal. e-gold transaction are completed electronically,
usually over the Internet, and they always settle by weight
of the metal even if denominated in some other way.
Even though e-gold does not advocate any particular political
agenda as, for example, Liberty Dollar does, e-gold could
be viewed as a libertarian system of money because it is not
subject to government policies in the same way as the Federal
Reserve alters the value of the dollar.
Convenience
credit
cards |
e-gold
is seen by proponents as an alternative to traditional forms
of payment, which in some cases (especially in online transactions)
may be less efficient or more costly. The e-gold system (as
well as other digital currencies) provides a system where
transactions clear instantly. This is in contrast to cheques
or credit card transactions which when used could take days
for funds to be deducted from an account. Also, unlike other
online payment systems such as PayPal, there are no distinctions
between merchant and non-merchant e-gold accounts. As such,
all e-gold accounts carry the same fees and have the same
capacity to receive and transmit e-gold account holdings.
Asset protection
Proponents of the e-gold system contend that e-gold assets
are protected against inflation, devaluation and other possible
economic risks inherent in fiat currencies. These risks include
what are perceived by e-gold proponents as harmful actions
by national governments and central banks that diminish the
value of assets held in fiat currencies. Also, many proponents
of the e-gold system believe that e-gold offers a truly international
and decentralized currency which is unattached to a central
bank of a particular country or territory.
There is also no way of having transactions reversed, even
in case of a legitimate error or an unauthorized spend (see
below). e-gold's Terms of Use stipulate that all spends are
final and e-gold cannot be held responsible for any spend.
In this respect, an e-gold spend is more akin to a cash transaction
while PayPal transfers, for example, could be considered more
similar to credit card transactions.
Inconvenience
Compared to other systems like PayPal, the process of buying
e-gold can be confusing to a person unfamiliar with the e-gold
system. Unlike some digital currency operators, e-gold Ltd.
does not sell digital currency directly to the user. Instead,
numerous third party exchange services sell e-metal in exchange
for a fiat currency, for a percentage transaction fee. Conversely,
these exchange providers will sell fiat currency in exchange
for an e-metal, also for a percentage transaction fee. In
this manner e-metals can be converted back and forth to a
variety of fiat currencies of different countries. The amount
of a particular fiat currency or e-metal necessary to complete
a transaction is determined by the then current spot price
of the metal in relation to the value of the fiat currency.
Financial Backing
e-gold
is, according to the e-gold website, "100% backed
by gold" |
There
is no way of knowing if e-gold Ltd. really has the gold to
back the currency in the e-gold system. e-gold does maintain
an "Examiner", a web page with updated statistics
on outstanding liabilities and the total amount of each precious
metal in its holding. While proponents generally consider
this assuring enough, critics remain sceptical.
Also, since all e-gold is backed by a physical commodity,
it's subject to price fluctuations that naturally occur around
that commodity. This can be a major problem if there's a sudden
increase in the supply of gold and you're holding e-gold currency,
the value of your currency just decreased; you've lost money.
This can, however, work both ways. Proponents of the e-gold
system would argue that the risk of significant price fluctuation
is small compared to the perceived risk of value fluctuations
among fiat currencies.
See also
* Digital gold currency
* Gold Standard
* PayPal
* Liberty Dollar
•
Gold
as Investment
• Gold
• EBTAccount.JPMorgan.com Login Account Access
This
article is licensed under the GNU
Free Documentation License.
It uses material from the Wikipedia
article "e-gold".
|
