Hi Craig,
> Here's an example of a message found on the message boards. I think it
> illustrates well how requiring gaming companies to have 'public' balances
> can be misunderstood. It seems to me that the most rational use of the money
> would be to remove it from e-gold and put it in some sort of secure
> investment.
>
> > "EMutualFun is taking money!!! On monday they had US$79,000 worth of gold,
> > today they have about US$42,000 left!! Visit this site and see that
> > emutualfun is using people's investments for their own selfish use. "
The public account balance option is a technical capability that
is there in support of the public balance *sheet* feature. The
intention of this feature is that the entire list of liabilities
and assets, combined into sub totals so as not to reveal information
on individual users, is published. So, as funds are swept into
interest bearing or liability-denominated debt instruments, these
also should be displayed in real time. I guess that this is not
implemented by EMutualfun, but maybe they are planning to.
By publishing the balance sheet, a custodian of others' funds
reduces errors as members of the public are enlisted as unpaid
auditors. Especially, users of the system, who have a vested
interest in seeing their funds secure, will be more keen to
keep an eye on the balance sheet than an uninterested professional
auditor who only has his fee or reputation to worry about.
It doesn't, for example, eliminate the possibility of fraud. But, by
having a public balance sheet, it is very clear that if there is a
discrepancy between the public balance sheet and the real balance,
sheet, then fraud is probably the cause. By providing the audited
information up front, it becomes much harder for the frauder to hide
their transactions.
Whether this works is moot point. It's only a strategy, and it's only
really been possible in net times, due to the cost of producing paper
audits. We do it on DigiGold, where combined with the public account
balance options in both Ricardo and the e-gold system, we can present
a live balance sheet. At least in principle, so far the page doesn't
do anything much except present the figures:
http://www.webfunds.org/ricardo/contracts/digigold/
(Actually, it's only one element of a governance strategy...)
I've heard some reasonable arguments against this method. One states
that when the system gets really big, as the public balances are out
there, they will make a more quantifiable (read: attractive) target
for various extortion strategies. Beyond scope of current post.
Gosh, that was long... Back to work...
iang
PS: Hmm, spot the deliberate error :)
PPS: News from the sunny Caribbean - it's raining. And still sunny.
A hoard of people are descending on our little island for FC00, and
I haven't started on my paper yet :(
