E-standards of Gold
Below is a MRR and PLR article in category Internet Business -> subcategory Ecommerce.
E-Standards of Gold
A New Era in Monetary Systems
Introduction
Ever wonder how much a troy ounce of gold weighs, or what a one-gram gold bullion looks like? It might surprise you to learn that in the digital world, it weighs just a few bytes. In 1996, the creators of the revolutionary E-gold electronic payment system introduced a new form of currency. This innovation prompted many entrepreneurs to re-evaluate traditional financial systems, forgetting about currencies, cross-rates, Forex, and inflation. E-gold offered an alternative to conventional money, reshaping the history of monetary systems and financial transactions.
The Roots of Gold-Backed Systems
In 1944, the UN currency and finance conference established a global monetary system where gold played a central role, serving as the ultimate settlement means between nations. This meant that all monetary units needed to be backed by gold. However, in 1976, this era ended, and the International Monetary Fund (IMF) introduced Special Drawing Rights (SDR) as the new world currency, with the US Dollar remaining significant.
Despite this shift, people still intuitively believed that paper money and digital records needed a tangible backing. In 1996, Douglas Jackson and Barry Dony founded E-gold, initiating a new phase of gold monetization. Their simple idea was that people would trust and use electronic money if it were backed by gold. In the E-gold system, funds were automatically converted into gold. The system also allowed backing by other precious metals like silver, platinum, and palladium.
The Rise of E-gold
In just a decade, E-gold evolved from a conceptual payment system to a globally recognized service under Gold and Silver Reserve, Inc., with a daily turnover exceeding $1.5 million. This popularity stemmed from its efficient financial transactions, where rights to precious metals were redistributed without altering their physical location. E-gold's reserves are securely held in facilities like Brink's Global Services and Transguard Security Services.
E-gold users benefit from legal protections in the US, where the company is registered. Additionally, the system's anonymity attracts users, as it doesn’t require personal data verification.
Interestingly, E-gold isn't tied to any single currency and operates with highly liquid metals, allowing anyone worldwide to open a free account. This inclusive approach draws approximately 2,500 new accounts daily. As of 2007, there were over 2.5 million registered users, with around 600,000 actively using the system. By January 2006, E-gold stored about 3,376,279 grams of gold worth roughly $61 million, though market fluctuations in precious metal prices can affect users' account values.
Challenges and Controversies
Despite its success, E-gold faced attacks from hackers and fraudsters, drawn by its robust system. Techniques like password cracking were used to steal funds, and large-scale DDoS attacks sometimes disrupted services. In October 2005, E-gold experienced a service outage due to DDoS attacks. The rise of phishing scams also threatened users, with malicious code stealing account details, leading to losses.
The reputation of E-gold took a hit as states, companies, and individuals fell victim to financial scams based on the system. Consequently, trust in E-gold began to wane. By December 2005, the US government investigated Gold and Silver Reserve, Inc., the contract operator and dealer of E-gold. Accounts were frozen, and offices searched, causing public concern due to media coverage.
This crisis marked a turning point. Despite reaching its peak, E-gold faced significant obstacles from governments and businesses. However, the US district court lifted the account freezes in January 2006, citing insufficient evidence of legal wrongdoing. Gold and Silver Reserve, Inc. sought to publicly dialogue with the state, aiming to expand its presence in electronic payment systems.
Trust and Future Prospects
Allegations against E-gold often center on its user confidentiality policy. Accusations of money laundering and pyramid scheme support are common but unsubstantiated from a user perspective. Individuals should have the freedom to manage their funds, while regulatory authorities should address earnings legality.
Despite past challenges, E-gold provides a global opportunity to back paper money with genuine precious metals. This free service is available from the comfort of one's home, showcasing E-gold's leadership in the financial industry. As Confucius wisely said, "If someone spits behind you, it means you’re ahead."
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