Douglas Jackson
Wed, 23 Feb 2000 07:10:18 -0800
-----Original Message----- >From: e$@vmeng.com [mailto:e$@vmeng.com] On Behalf Of James A. Donald >Sent: Monday, February 21, 2000 11:32 PM >To: R. A. Hettinga; Digital BearerSettlement List; e$@vmeng.com >Subject: Re: e-gold: Frozen accounts, returned funds, a few of my favorite things... >>1) E-gold sez "We don't want crooks or anarchists - they make us look >>bad, and might break bring down the ugly hand of government to crush us." >This of course, is the same attitude as lead to the death of digicash. "Oh, no, if our stuff was actually cash-like >pornographers might be paid in digicash!". >If a medium of exchange is to succeed with conservative and respectable people, it has to be cashlike. ********************* e-gold Ltd has been slow to publish new e-gold Account Agreement. Part of this is due to chronic lack of resources - no one has time to definitively finish the project, but also it has taken some trial and error to abstract the principles that will form the basis of the policy. User Agreement will come out soon, as in, weeks. A point that I'd like to emphasize is that e-gold, though it affords immediate settlement, is not otherwise designed or intended to be cash-like. It will continue to implement new interfaces and features but it is not intended to be the definitive user-to-user, retail, financial, POS or other end user payments system. It is the (non-fiduciary) monetary base. [In the following example the numbers are not meant to be precise targets but just as an illustration of principles.] In the long run, I envison maybe half of all e-gold sitting in DigiGold's e-gold account. Maybe another 25% would be in the e-gold accounts of other financial institutions. e-gold would be available to any and all, but most end user payments would involve higher layer systems. The role of e-gold is to be an available non-fiduciary remote payments system, that anyone can resort to if they are willing to bear the agio... a feedback mechanism that will quickly expose any higher level fiduciary forms of AUG that are unable to circulate at gram-for-gram parity. DigiGold's AUG is also highly specialized. DigiGold is designed as a private counterpart to a central bank [this has been discussed some on the e-gold list]. It will make even less attempt to be all things to all people. DigiGold has no plans, for instance, for it to ever circulate sans client wallet. I expect great majority of DigiGold's AUG to sit in the (WebFunds) wallets of: a) financial institutions and other debt-security[AUG-denominated, of course]-issuing debtors, who use it as their primary reserve asset, that their liabilities are contractually payable in, and, b) in the wallets of traders, who use it as a currency for trading [debt and equity] Ricardian instruments on the market server that Systemics will shortly (hopefully) unveil. The payments systems that end up being used for most end user stuff will all be free of transaction fees. Some will be browser based, some mobile, some on tamper-resistant hardware tokens. Our goal is that all of them embody AUG, AGG, PTG, and PDG, payable in e-metal [which for practical purposes will be satisfied by payment in DigiGold's financial currency, whose balance sheet is designed to assure it never falls to a discount relative to e-metal.] The really juicy prize in all of this is to be the firstest-with-the-mostest bank of issue that issues the AUG liabilities embraced by major market segments, since they will be able to hold reserves that are costless [except for opportunity cost of not being fully invested], and will be able to finance their asset portfolio interest free. I apologize if this hasn't all been obvious for the past year. We apparently aren't very effective as corporate communicators.