I'm not quite sure regarding claims that a particular currency is backed by 100% gold...
If John Smith buys a bar of Gold in e-gold or any other 100% gold currency, then his account is backed by 100% gold. If I come along and purchase $15 worth of e-gold. What, then, is my holding backed by? Does e-gold buy $15 worth of gold dust or a gold coin on my behalf and put it in the vault? Or does the e-gold system actually contain (when audited) 1 bar of gold, plus $15 fiat currency? I think it is the latter. Regards, Ragnar PS. Regarding the ownership discussion: (Beware - Pedantic, legal rambling, and analysis) Ownership, historically, is not so much defined as it is measured. Ownership is not black and white. It is often expressed as a "bundle of sticks" or rights. Included in those rights is the right to control, to transfer, to exlude others, etc. In the case of digital currencies, the question is not whether one owns a particular thing, but rather what it is one owns or controls and how. Exclusive title (such as fee simple or direct possession) is irrelevant if one is a hermit and lives alone and apart from society. It is not even an issue because noone infringes on your property rights in such a situation. But property rights become relevant where one interacts in society and depends on laws and other societal structures to safeguard one's rights to property. It is the latter context where the bundle of sticks or rights start to become relevant. The government is, in many cases, and through regulations, laws and the courts, in charge of determining one's bundle of sticks. The government may take away one or two of the individual sticks. There are also public bundle of sticks or rights that affect one's own rights to one's property. And just because government takes away certain rights or adds certain public rights does not necessarily mean that one's property has been reduced in value. For example, electrical, sewer, water, etc. systems generally enhance property values. I possess a vehicle, but I cannot talk on my cell phone in it, drink alcohol in it (hell, I can't even have a closed container of alcohol in the passenger seat). I must have safety features installed, I must wear a safety belt, I must pay insurance (at least in most states, with Tennessee, Wisconsin and New Hamshire as exceptions). I must pay to have it inspected; I must obtain a license to use it, pay an annual tax on it, etc., etc., etc. Is it my vehicle? Do I own it? I have a piece of paper saying that I own it, but more and more, I have my doubts. Perhaps I am leasing it from the government? Or perhaps I merely have a license to use it? I paid money when I bought it, but I fear I only paid for a choice of a particular make or model, and not the vehicle itself (at least not completely). This is where confusion abounds with digital currencies and rights or claims or titles to actual, physical gold. No, you do not have possession of the gold, but is that a bad thing? Go ahead and obtain a physical bar of gold and transact business with it. Would you like fries with that? So our bundle of sticks, our rights to get at the gold, is somewhat limited, but that does not necessarily devalue our gold holding in our digital accounts. There are third parties involved, but they are there to enhance the stability of a particular digital currency system. I believe these third parties are needed to help preserve our bundle of sticks. Do I own the gold? Do I own my car? I submit that I have more bundle of rights in the gold in the e-gold system than I have in my car or other property that I may possess or hold title in. Ever "owned" a rent-controlled building? So, do we own, lease or license the gold? I believe that until a substantial body of law emerges, no one can say for certain, not even the owners of Goldmoney, who claim to have invented digital gold currencies, or Al Gore, who claims to have invented the internet itself. Gold in the vaults is claimed to be common property, managed by third parties for the benefit of all, not unlike a public park or public drinking fountain or a condo or a co-op business or apartment. Do you want to own a co-op apartment? Well, look at the user agreement and then decide if it's for you. You will get a contract or title or license (similar to getting a digital currency account), but your rights to the actual property (apartment or gold) are subject to agreement and are limited, as well they should be to preserve the system itself, to make it work and function in an imperfect society. I believe that users have a license (or contractual agreement) to access the system (via their online account) and lease an agreed to quantity of gold (not any particular gold bar or coin) and dispose of their rights in the common gold as they see fit within the bounds of the contractual agreement. The key is the safeguarding of the gold and the smooth operation of the system. Call it ownership, call it a lease, call it a license. It may be all, and it may be neither. ===== Liberty Impact! Check out this free, hard-hitting weekly newsletter about privacy, liberty, offshore banking, tax avoidance & digital currencies. http://www.libertyimpact.com __________________________________________________ Do You Yahoo!? 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