> I'm not 100% sure I even understand the original question, but I think he
> was referring to the InExchange/OutExchange spread, which may be considered
> a "startup cost" to get into the system. I'd like to present an anology.
I think you are close. The complaint I hear is "why should I pay 4+% to convert
my money?"
If a company is offering a widget for $100 and accepts either visa or e-gold,
there is no incentive in the mind of the consumer to "loose" 4% to use e-gold.
The cost of using visa is hidden on the back end, where the cost of using E-Gold
is up front.
Educating both consumers and merchants is something we have to do.
There is a prime market emerging for merchants that I don't think they see. As
a merchant I offer a widget for $1,000, it costs me 5% to take visa, I discount
5% for E-Gold. I have broke even.
Now the market makers need a steady supply of gold to fund new accounts, I now
watch the exchange rates on gold, it goes up $2 an oz, I now offer gold to the
market makers at 2%. My profit on the widget has just gone up and I have
enabled the market maker to offer E-Gold at a lower exchange rate.
The point is that early adopters don't have to take the bites crossing the
stream if they create an incentive for people to build a boat.
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