philosophical discussion have to do with the question is TGC are crook or not?"
Here at last I think we get to the crux of the biscuit. The matter of whether or not one can trust The Gold Casino's owners and the dBourse operators (who I will agree appear to be effectively the same people) is at stake here. What's the big deal?
The owners of TGC and the operators of dBourse are effectively anonymous. There is a technical and admin contact for the domains, of course, and some contact data. But, we see a lot of concern being raised because other publicly traded companies are in other types of jurisdictions where various sorts of registration and public disclosures are mandatory.
I contend that any investor in 1999 who put 100 grams of gold into, say, Enron, was not in any way protected by knowing that Ken Lay and Andrew Fastow were CEO and CFO of Enron. At that time, Lay was a man of very considerable personal reputation, and so was Fastow. The fact that the entire board of directors was identifiable, and were individuals of reputation did not prevent a lot of investors from losing a lot of money.
The issue of how to make investment choices where the stockholders and directors of a company are anonymous reminds me very much of the Turing test. Alan Turing came up with this test to establish whether remote communications were with a living sophont - an intelligent person - or with a very clever computer program. Basically, the test involved double-blind conditions so neither the party being tested nor the tester could see the other. Turing believed that an intelligent person could review the answers given by another entity and determine whether that was a person or a machine. Since then, the Turing test has been applied to artificial intelligence to establish whether a computer program is intelligent - sentient.
We're in a similar situation where we trust our investment capital to anonymous parties. We need some sort of test to establish whether we can trust those people with our money.
After all, there are three elements to making sensible investment decisions. Is there a plan? Is there a team competent to implement the plan? Do I trust these people with my money?
The first two are preliminary issues - basic hurdles which have to be crossed. Is there a plan? If there is a plan, and the plan shows that the company is going to make money, and if experience shows that either it has made money or comparable companies in similar situations have made money, then pass on to the next criterion.
Is there a team competent to implement the plan? I think we can say, "yes." The Gold Casino has a competent looking web site which is perhaps a bit new age in the art department, but the software works. We know that one of the software contractors for TGC has been Interesting Software Limited, which is an outfit of extraordinarily high reputation led by the inimitable JP May.
We know that some of TGC is hosted, at least with respect to domain hosting, on the Sealand servers run by HavenCo. Again, we have a number of bits of information about various people at Havenco and their capabilities.
So, finally we come to the question of whether the people who are soliciting our investment capital may be trusted. So we come to the Davidson reputation test.
We visualize a black box. Black box thought problems are something I picked up studying physics and astronomy. You are free to visualize the box as white or green or some other color. But, it is a box. Physicists like to call it a black box, because black is the pigment which absorbs all incoming light. So, you can't just shine a light on it and know all about it, because it doesn't reflect light back at you. So, I have this black box.
Things go into the box. We call these inputs. Things come out of the box, we call these outputs. We are currently testing the reputation of the people inside the box. We have reason to believe that there are people involved - someone started TGC and dBourse, someone is involved in contracting ISL to do software for it, someone pays bills and runs the help desk, etc. - so we want to test for their reputation. We don't know who these people are, we don't see their curricula vitae on a web site, so how do we know if we can trust them?
The test involves providing inputs into the box and examining the outputs from the box. If TGC and dBourse are inside the box, then inputs would include bets people place at the casino, requests people make for refunds to their gold accounts, investments people make at dBourse, and referral links people post such as: http://8715605.thegoldcasino.com/
Other types of inputs would be complaints sent to the help/support desk, software development work done for the casino's benefit, bills submitted by contractors, bills submitted by domain and web hosting services, bills submitted by domain name registrars, and so forth. Then we need to look at the outputs.
The outputs for a reputable set of individuals should be bills paid, preferably on time, bets made good on, complaints answered in some fashion preferably with good faith representations of helpfulness, dividends paid, gold paid out of TGC accounts into e-gold, GoldMoney, e-Bullion, or Pecunix accounts, referral fees paid, and so forth. What we're looking for is an indication that the people inside the box are dealing honorably with the people outside the box. We are looking for fulfillment of contractual obligations. We are looking for fulfillment of implied obligations. We are looking for instances where honorable dealing cannot be found.
If we examine the inputs and outputs and we get no information that anyone has been mistreated or abused or treated dishonorably, then we have a good idea that the people inside the box when operating as a team are reputable. We don't have to know who they are, we don't have to know how many there are, all we have to know is that the inputs go in, the outputs come out, and everyone is satisfied with the deal they are getting.
Ben Legume has made the point that the current dBourse shares are a conceptual extension of the FunBonds that TGC used to offer. I once invested in a FunBond and it paid off with a small bonus or profit to me. I know Jim Ray has mentioned on this list many times that he's invested in FunBonds, and has proposed a formula for investing at certain times to get the most weekends or the longest weekends in his bond period. Ben's point seems to be that if it was okay for TGC to offer FunBonds, then why not shares in TGC through dBourse.
I agree with this basic point. The input/output evaluation of the Davidson reputation test with regard to TGC FunBonds reflects positively on the honor and reputation of TGC principals.
The same is true for my referral link. I've posted it to some lists. Some people have clicked it. They have played some hands of poker or some slots at TGC. I've been paid bonuses to my TGC account.
The same is true of my bets at TGC. I've put some money into my TGC account. I've played some hands of poker and some slots. The odds of the games seem to be as posted. The games follow the expectations set by other casinos in terms of what happens. Bets pay off sometimes. When I go to refund my gold from my TGC account into my e-gold account, I get my gold back.
A while back, someone posted here that he had created a 'bot which played endless hands at TGC. The 'bot was set up to take advantage of the "Queens or better" setting of one of the games. The 'bot made a bunch of bets, and because of the lay of the odds, it made a bunch of gold for its coder. TGC paid off on those bets, even though we may presume they knew that the bets were automated. Why? First, they got a lot of great publicity doing so. Second, they didn't have any reason to discriminate against players using automation. Third, they were honorable about the terms for their games. Seems like stellar reputation stuff.
The same is true of the vendors I know of who provide services to TGC. ISL has written software for TGC and has had its bills paid. Another contractor I know has the same result. Havenco had its bills paid. The domain registrar has had its bills paid for years.
I haven't heard of anyone being screwed by TGC. I don't have any evidence that they've ever treated anyone dishonorably. I have all these input/output sets of data which suggest that people get what they expect from TGC. Thus, I think there is plenty of reason to trust the people there. They have earned that trust by dealing honorably.
Does it matter that they are anonymous? Actually, yes. I think it improves their reputation. The actual individuals are unknown, so they don't have any loss of personal reputation if they run off with the money. But, instead, they've repeatedly done the right thing and treated everyone decently. So, they get extra points for being anonymous.
By way of contrast, Enron could be treated as a box. It might be considered to be a glass box or an open latticework. We can see inside. We can see the individuals involved. We look at the inputs and the outputs, though, and we get a very bad picture of people behaving badly, investors being screwed, value being lost, vendors and customers pissed off. The fact that we can see inside, because registration and public disclosure laws require that the principals of Enron tell us who they are doesn't help at all. It actually just distracts us from what really matters: the inputs and outputs are mismatched, and a bunch of people are unhappy - have been burnt in deals with Enron.
Another example closer to home: David Reed and OS Gold. Many of us examined what Reed was doing and chose not to trust him because his behavior seemed to be producing mismatched outputs given the inputs. As a result, some of us didn't get burned. The fact that Reed was a known person whose name and background could be checked didn't help those who placed a lot of capital at his disposal.
This same type of black box analysis can be used to evaluate the business plans of TGC. Do they buy effective software? Yes, they do. Does the software behave as promised across a fairly wide range of browsers? Yes it does. Are connections to the servers swift? Most of the time, yes. Has the casino been operating for years? Yes it has.
Given these indications of effectiveness, we should be able to address questions such as your concern that the proprietors of TGC die and join the choir invisible. If the other elements of the business plan are in good working order, should we be worried that one person getting hit by a Mack truck is going to bring everything crashing down? Isn't it a function of good planning to provide for the continuing working of the company in spite of the loss of one or more key personnel? Aren't insurance companies able to offer "key man" insurance to guard against just such risks?
Your question, "what happens to my shares" if they all die is a good one. The answer should be that the company continues to operate because it has adequate staff, off site back-ups, and the heirs and successors in interest to the owners are able to keep things going.
One of the things we have observed over time is that whenever there is a successful business, it doesn't lack for parties interested in having a piece of the profit stream. If the current owners of a successful company die in a plane crash, their heirs are very interested in recovering the value of their inheritance. Maybe the heirs sell the company to someone else.
Certainly there is a risk when the box is opened and a new set of individuals are put inside. We would have to again assess the inputs and outputs with the Davidson reputation test to see if we can trust these people. Since the original owners are anonymous, we have to do that testing all the time. We won't know if one or more of the principals of TGC dies, retires, sells his shares and moves away.
But, is that risk any less with Enron? Would an investor in Enron have been worse off if the entire board of directors and management team been in a plane crash? Would the loss of value with a discontinuity of management been any worse than the loss which occurred with considerable continuity from 1999 to 2001?
But what happens in an unregulated environment when the unregulated non-regulators pass away?
The answer is "we don't know." The solution is to keep applying the Davidson reputation test.
As long as the outputs show that the individuals inside the box treat their obligations seriously and honorably, great. Play at the casino, put up referral links, buy FunBonds and shares of stock, and sell them software. If the test starts showing ugly, get your value out as fast as you are able.
Don't be distracted by pictures of pretty executives, don't be deluded by a fashionable curriculum vitae, don't suppose that it matters whether the people inside went to Ivy League schools or came through the School of Hard Knocks. Public disclosure is as much distraction as it is information. Where it is available, make use of it. But don't suppose that it is any substitute for examining the inputs and outputs.
(By the way, the pool for a share is halfway there.)
Regards,
Jim http://www.ezez.com/
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