----- Original Message -----
From: Tristan Petersen <[EMAIL PROTECTED]>
To: e-gold Discussion <[EMAIL PROTECTED]>
Sent: Friday, May 11, 2001 12:01 PM
Subject: [e-gold-list] Re: Public Announcement regarding OSGold links
> >E-gold's silly move will only hasten their demise as the dominant gold
> >economy site, directory site and gold currency. Surely it does nothing
good
> >for building good-will with market makers, whose obvious economies of
scope
> >demand they service multiple currencies. Market makers will look after
> >themselves and their customers.
> >
> >David Hillary
>
> Could you elaborate on what exactly "E-gold's silly move" means? Since
> it's so obvious to you, I'd like to hear it. Because plainly, and I am
> sure I'm not alone here, I'm just not getting it. Is not e-gold a private
> company, formed by the action of individuals who voluntarily associated
> to provide us (customers, no doubt!) with a means to live a bit more free
> in our lives? Do not us customers voluntarily associate with e-gold? If
> that is not the case, then simply withdraw all your gold, and go cry to
> the governm--er enslavers you love so much. Oh, and while you're at it
> you might as well not pay your taxes. Then, a year (or much less-it's the
> IRS after all!) later, see who comes after you with the guns and
> coercion. See who leaves you alone and who doesn't.
>
> The very simple fact of the matter is that e-gold is a private company.
> Do not tell them what to do. They don't tell you what to do with your
> life. Not listing a MM on THEIR website is their damn right; love it or
> leave it, but don't try to force someone else to your opinion. That is
> the nature of government; you disagree with me, therefore you are wrong!
> Huh? Opinions aren't wrong. Trying to force others as a result of your
> opinions is.
>
> You can't be free if you don't want freedom for others.
>
> Tristan
Tristan you are jumping to conclusions here.
I refered to 'e-gold's silly move' by which I mean their attempt to reduce
their customer's access to market makers (who they do not endorse anyway)
who exchange currencies for OSGold as well as e-gold. By calling it 'silly'
I am not claiming what they have done is illegal, fraudulent or that the
government should punish them, or anyone, rather that it is against their
own interest, in particular it will speed up the erosion of e-gold's market
power in the gold economy.
The reason I see the economics/strategy of the matter in this way is as
follows:
1. market makers have economies of scope regarding exchange services for
electronic gold currencies, and in fact any 'hard' electronic money, thus
find it profitable to offer exchange services for many different electronic
currencies.
2. customers give little weight to the fact that a market maker provides an
exchange service for a particular currency when assessing the soundness of
the currency. The reputation of the market maker is to do with reliability
and speed and cost of funding, not the soundness of currencies funded.
3. the delisting of market makers who provide exchanges services for OSGold
from the e-gold list is an exercise of market power of a) the e-gold list
and b) the e-gold currency. While holders of market power, in my view, have
the right to exercise their market power (I'm not a fan of anti-trust law or
monopoly regulation), I don't think this exersize was strategically optimal
for e-gold, for reasons outlined below.
4. The market response to this move will be to a) erode the market power of
the e-gold list as a directory and b) in turn erode the market power of
e-gold as the currency with the largest network of market makers. This is
effected partly by undermining market maker goodwill towards e-gold, partly
by strengthening efforts for market maker association, hence the development
of alternative directories with their own market power greater than the
e-gold page list. The non- e-gold aligned association of market makers and
list of market makers will become the new hub of the gold economy, putting
e-gold and other currencies in critical evaluation for customers and
providing the best source of information about market makers.
5. the e-gold action will ultimately backfire because the economies of scale
in the market maker industry are large and the market power of e-gold is
already eroding fast and is now insufficiently strong to take this action
profitably.
By the way I don't trust OSGold myself (well not yet anyway) and perfer to
use e-gold and SR and metalsavings (haven't checked them out recently but if
they are still going fine I'll use them more in the future). But my list of
gold currencies seems to get longer all the time. There are: e-gold, SR
gold, GoldMoney, 3PGold, digigold, OSGold, ecoin EGLD, and a few more. The
development of the market maker industry, electronic currency banks, value
added services also hastens the demise of the e-gold market power. The way
financial cryptography is going it won't be long before you can use shares
in company XYZ as EFTPOS and ATM accessible money!
David Hillary
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