Something a little different: Electronic Currency

[Divinus Arma]

http://www.e-gold.com/

E-Gold is a digital currency backed by real gold. The company is already quite secure and was recently featured in a U.S. BusinessWeek article.

The concept is this:

1. Customer A purchases units of E-Gold via Electronic Commerce.

2. Customer A transfers E-Gold to Customer B instantaneously. No opportunity for "recall".

3. Customer B exchanges E-Gold for currency.

So as long as there are two E-Gold accounts, payments are simple and instant. The fear of "canceling" a payment is impossible. According to the E-Gold website (http://www.e-gold.com/unsecure/qanda.html):

e-gold payments clear instantaneously (with no chargeback risk), no matter how large the payment, no matter how far apart the Spender and Recipient.

With some refinement, I think we have an all-digital global currency here. Being backed by actual gold gives it the same basic principles as modern currency: Non-negotiable legal tender. The value is set against the gold standard, so market fluctuations will match gold markets. Also, note that the company has several currency standards including platinum, silver, and palladium. These additional precious metals can provide stability and security through an investor portfolio of electronic currencies.

This is a pretty interesting example of the global economy, the moves toward worldwide standards, and the effects of the digital revolution.

How many of us pay in cash these days? I recieve my paycheck through direct deposit, pay my bills through automatic withdrawal, and pay for basic everyday stuff using my checkcard. I almost never have cash on me.

Are we moving towards an all digital currency?

[Major Robert Dump]

I carry only cash. No checks, no credit cards, just a plain old savings account, some stocks and a 401k I dip in when I need beer money. E-commerce is cool and convenient and all, but I still like to go the electric company to pay my electric bill, god I sound like my grandma, she wont use a bank drive thru.

Not using the forementioned things means I can't get access to online porn and gambling sites, but trust me thats for the better.

And I want to punch all jerk offs in the head when they pay for a soda at 7-11 with a credit card.

[Major Robert Dump]

Okay, the 7-11 thing was meant for when I'm standing in line behind them. You will accuse me of working there

[solypsist]

i'm slightly disappointed. i expected you to be more off the grid than that.

shattered.

I carry only cash. No checks, no credit cards, just a plain old savings account, some stocks and a 401k I dip in when I need beer money. E-commerce is cool and convenient and all, but I still like to go the electric company to pay my electric bill, god I sound like my grandma, she wont use a bank drive thru.

Not using the forementioned things means I can't get access to online porn and gambling sites, but trust me thats for the better.

And I want to punch all jerk offs in the head when they pay for a soda at 7-11 with a credit card.

[TinCow]

I hate cash. I use it as little as possible. Also, thank God for USAA and thier fabulous "never have to leave your house" system.

[Strike For The South]

I carry only cash. No checks, no credit cards, just a plain old savings account, some stocks and a 401k I dip in when I need beer money. E-commerce is cool and convenient and all, but I still like to go the electric company to pay my electric bill, god I sound like my grandma, she wont use a bank drive thru.

Not using the forementioned things means I can't get access to online porn and gambling sites, but trust me thats for the better.

And I want to punch all jerk offs in the head when they pay for a soda at 7-11 with a credit card.

I agree I would hate to have my money that intangible

[Alexanderofmacedon]

Wrinkled dollar bills are always a pain when it comes to vending machines at school. I wish we put them on little cards. It'd be much easier...

[Seamus Fermanagh]

People have rejected every dollar coin they've tried out, but are attached to the penny.

If we could abolish the penny and wipe out the paper dollar, we'd save a bunch too.

[Major Robert Dump]

i'm slightly disappointed. i expected you to be more off the grid than that.

shattered.

I thought that was off the grid, seeing as how all my peers think its odd to carry a pocket full of cash for day-to-day stuff, make one big withdrawel when its time to pay bills and pay them all on the same day, and never ever have to say "let me stop at the atm"

Though I do suppose were I robbed it would affect me more than the plastic wavers

Back on topic:

I don't think paper money will ever be replaced. The problem with digital currency is the lack of a paper trail. Imagine the fraud, imagine the theft. I wonder how the FDIC would insure something that was digital, rather than sitting physically in a safe.

[rory_20_uk]

I think completely the opposite is true: paper money has no trail whatsoever. You can cart it accross borders and no one has a clue. It's far harder to do that with online money, as although it can be done, removing how it was done is far harder.

Most money doesn't exist. Banks only need a percentage of their funds in monies to be considered solvent. They lend far more out than people invest in themselves. Then there's stocks and shares - more money that has only theoretical existence. Google lost $13bn, but no money as such changed hands. And the future exchange is even more ephemeral: plcements of money you don't own in items that don't yet exist...

Yup, money is pretty sidelined as a real item.

[Major Robert Dump]

Paper money may not leave a paper trail, but it exists, and it has serial numbers. With only an electronic currency, what happens when your bank account gets zapped? How do you prove it was stolen and not used by you? And even if they did determine that these funds werre stolen and or who stole them, does it being backed by gold guarantee you get it back if it has already been spent by the thief? Can something be backed twice?

I'm 100% against elimininating physical currency. There needs to be some sort of way to "take your money" if you need to, and with paper backed by gold you can do that. With electronic currency backed by gold, if you want to take your money are they going to give you gold bars?

[rory_20_uk]

Odd that they are recreating the "gold system". How do things change as the price of gold changes? Can you see your money halve as your currency slips verses the market price of gold, or do you loose if the value of gold drops?

It seems a better one is based on goverment bonds as then the value of money is indexed linked to where you live.

[Duke Malcolm]

I favour the Gold Standard rather than the value of money being linked to the country's wealth...

It might be a bit materialistic, but the idea that my notes are redeemable as actual physical wealth rather than a number in some computer is re-assuring, as is having solid wealth in my pocket bearing the image of Her Majesty the Queen (God bless Her).

[Kanamori]

I favour the Gold Standard rather than the value of money being linked to the country's wealth...

It is more than wealth, to be honest, look at the US. Our currency is pretty crap right now, but that doesn't reflect how well it is doing overall. It has quite a lot to do with how many people want it, and how accessible it is.

Paper money may not leave a paper trail, but it exists, and it has serial numbers.

Traditionally, paper money has been just as "fake" as digital money.
It was originally, and I suppose theoretically to this day, to simply be a piece of paper which represents real money in some bank, just as a check or something. In effect, digital money is just as real as paper money; it is a means of "universal" trade that replaced gold, ie it represents the value of trading a loaf of bread for some other thing, but it is the standard of value throughout so one can trade a dollar bill rather than some other item or service for that loaf of bread. This system has, IMO, led to some of the great developments in history, like how we are no longer a feudal system or as dependent on our employers for the basics of life; we no longer rely on them to directly give us our food, shelter or such other things.

And on topic, until this replaces the monetary systems, I can't see how this is that huge of a devolopment. One must still trade their money for this e-money, and unless the owners of this business were stupid, they would be using the same exchange rates that we all do.

[rory_20_uk]

I don't think that money has a value that can be reproduced over time any more. Notes promise to pay the bearer £1, without saying what £1 is.

As has been said, the price of currency is what people are on average prepared to pay for it. The dollar is to a large extent propped up by Eastern countries buying back their own trade surplus as they want to continue to sell goods. How many billion is South Korea, China and Japan sitting on now? I loose count.

Gold was OK when countries aren't linked, but what happens when a market gets flooded with gold (or silver as was also used as the base precious metal). Americans used "trade dollars" made of silver and worth $1, but not redeemable in the USA itself to trade abroad. Every time these systems were abandoned was that the fluctuations of its value were too great. On a large scale the website fails in the same way.

[Major Robert Dump]

I understand paper is just as fake as e-money, but you are missing my point.

I want to make a withdrawle from the bank, all my money. I am given the actual physical cash, which then becomes my responsibility to protect.

If I want to withdraw all my monel from an e-bank, what do they give me if paper money doesn't exist? Gold? I doubt it. And no, a "card" with the "credits" on it won't work, because "cards" only work when theres some sort of bank, or system, in place to track it and insure it; and since I just withdrew it all from the bank that is not the case, the card now becomes the equivilant of a suitcase full of money, and if the card gets lost, or damaged, or stolen, its gone. Thatg being the case, I'll take the paper money, not a card that represents it. Call me paranoid.

[Papewaio]

Gold was phased out as being a currency standard awhile ago. I don't think it is a step forward having an electronic currency pegged at golds value.

As it stands Gold has little industrial use. In fact its main use is as jewelry... so its value is based on the Magpie effect... oh look shiny.

[Tachikaze]

I think the best solution is to have cards that are charged with value at an ATM. Each card is then used by anyone who physically possesses that card. It would be basically the same as today's gift card, only universal.

One problem is knowing how much value is currently on the card. People would have a small electronic reader for that purpose. Or there may be a display on the card itself.

I am most comfortable using cash, myself, but I use credit cards or cash cards for purchases over $5. I have always paid off my entire balance each month.

[Major Robert Dump]

Okay you guys are completely missing the main picture,


How am I supposed to tip a stripper on the stage if we elimininate paper cash. An IOU? A card swiper between her butt cheeks? Be practical, people

[Navaros]

e-Gold was raided by the FBI in December 2005. The chances of all e-Gold funds being frozen by the FBI at some point is highly likely, seeing as it is the currency of choice for terrorists and child porn participants.

e-Gold accounts are often hacked. Hackers love to target and steal money from e-Gold accounts, and it's not hard for them. If your account gets hacked, you're screwed. Your money is gone for good.

Another e-currency site, Stormpay, has in the past week or so committed fraud against hundreds of thousands of people who have collectively lost several hundred million - if not billions - of dollars.

In conclusion: e-currency sucks unless you like having your money stolen, never to be recovered again.

Oh yeah, I just noticed this:

E-Gold is a digital currency backed by real gold. The company is already quite secure and was recently featured in a U.S. BusinessWeek article.

The "recently featured in a U.S. BusinessWeek article" was an article talking about the FBI raiding e-Gold. Good job putting a positive spin on that raid.

[Tachikaze]

Okay you guys are completely missing the main picture,


How am I supposed to tip a stripper on the stage if we elimininate paper cash. An IOU? A card swiper between her butt cheeks? Be practical, people

Write her a check?

[Major Robert Dump]

I would run out of an entire book in one night

Traditional strip club etiquette (wow that sounds funny) requires you to go to the stage and give cash tips to the hard working lady on stage, in exchange for a close up of some sort, the tips usually range from 1-$5 per bloke. Writing a bunch of 5 dollar checks over the course of the evening would make my hand really tired, and I need my hand in good shape for somethihng later

hmmm. i really degenerated this thread

[rory_20_uk]

Amen...

[Papewaio]

Well most would have more silicon then an AMD... so make those breasts swipe enabled and ring up the money... or more practically have a card reader at the front of the stage or get strip club money at the door...


Thanks for the tip about manners, if I ever go to a strip club I now know what to do.

[Tachikaze]

I would run out of an entire book in one night

Traditional strip club etiquette (wow that sounds funny) requires you to go to the stage and give cash tips to the hard working lady on stage, in exchange for a close up of some sort, the tips usually range from 1-$5 per bloke. Writing a bunch of 5 dollar checks over the course of the evening would make my hand really tired, and I need my hand in good shape for somethihng later

hmmm. i really degenerated this thread

The dancers would probably be pleased to get some gold.

[Divinus Arma]

The "recently featured in a U.S. BusinessWeek article" was an article talking about the FBI raiding e-Gold. Good job putting a positive spin on that raid.

I didn't say it was good or bad. I said it was featured. That the feature happened to be on the criminal preference of e-gold as a currency exchange was not exactly my point.

But for the record, yes. E-gold is a favorite for crooks to move money around easily and anonymously. What is the difference between that and a swiss bank account, hmmmmh?


I think the point remains, we ARE seeing a transformation to digital currency, one way or the other.

Likely we'll end up just swiping a card to tip the girls at the stage. Is it as fun as sticking a bill between the kittens? No. And worse still, I can't be cheap and make a couple of folded bills look like more money than it really is. Of course, I usually just go for hookers and skip the strip club entirely. Nothing quite like a down and dirty jerkout from the "Nut Gobbler" on 8th and E Street!

[solypsist]

i am totally electronic. i only keep a few 20s in my pocket for taxis.

the downside is i'm also totally trackable: metrocard for subway, debit card for personal expenses, credit card for business expenses = i'm a demographic information source!

btw, all my bills are auto-deducted from my online banking account.