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e-gold: noise vs. signal

-----Original Message-----
>From: e$@vmeng.com [mailto:e$@vmeng.com] On Behalf Of James A. Donald
>Sent: Monday, February 21, 2000 11:32 PM
>To: R. A. Hettinga; Digital BearerSettlement List; e$@vmeng.com
>Subject: Re: e-gold: Frozen accounts, returned funds, a few of my
favorite things...

>>1)    E-gold sez "We don't want crooks or anarchists - they make us
look
>>bad, and might break bring down the ugly hand of government to crush
us."

>This of course, is the same attitude as lead to the death of digicash.
"Oh, no, if our stuff was actually cash-like >pornographers might be
paid in digicash!".

>If a medium of exchange is to succeed with conservative and respectable
people, it has to be cashlike.

*********************
e-gold Ltd has been slow to publish new e-gold Account Agreement. Part
of this is due to chronic lack of resources - no one has time to
definitively finish the project, but also it has taken some trial and
error to abstract the principles that will form the basis of the policy.
User Agreement will come out soon, as in, weeks.

A point that I'd like to emphasize is that e-gold, though it affords
immediate settlement, is not otherwise designed or intended to be
cash-like. It will continue to implement new interfaces and features but
it is not intended to be the definitive user-to-user, retail, financial,
POS or other end user payments system. It is the (non-fiduciary)
monetary base.

[In the following example the numbers are not meant to be precise
targets but just as an illustration of principles.]

In the long run, I envison maybe half of all e-gold sitting in
DigiGold's e-gold account. Maybe another 25% would be in the e-gold
accounts of other financial institutions. e-gold would be available to
any and all, but most end user payments would involve higher layer
systems. The role of e-gold is to be an available non-fiduciary remote
payments system, that anyone can resort to if they are willing to bear
the agio...  a feedback mechanism that will quickly expose any higher
level fiduciary forms of AUG that are unable to circulate at
gram-for-gram parity.

DigiGold's AUG is also highly specialized. DigiGold is designed as a
private counterpart to a central bank [this has been discussed some on
the e-gold list]. It will make even less attempt to be all things to all
people. DigiGold has no plans, for instance, for it to ever circulate
sans client wallet. I expect great majority of DigiGold's AUG to sit in
the (WebFunds) wallets of:
a) financial institutions and other debt-security[AUG-denominated, of
course]-issuing debtors, who use it as their primary reserve asset, that
their liabilities are contractually payable in, and,
b) in the wallets of traders, who use it as a currency for trading [debt
and equity] Ricardian instruments on the market server that Systemics
will shortly (hopefully) unveil.

The payments systems that end up being used for most end user stuff will
all be free of transaction fees. Some will be browser based, some
mobile, some on tamper-resistant hardware tokens. Our goal is that all
of them embody AUG, AGG, PTG, and PDG, payable in e-metal [which for
practical purposes will be satisfied by payment in DigiGold's financial
currency, whose balance sheet is designed to assure it never falls to a
discount relative to e-metal.]

The really juicy prize in all of this is to be the
firstest-with-the-mostest bank of issue that issues the AUG liabilities
embraced by major market segments, since they will be able to hold
reserves that are costless [except for opportunity cost of not being
fully invested], and will be able to finance their asset portfolio
interest free.

I apologize if this hasn't all been obvious for the past year. We
apparently aren't very effective as corporate communicators.
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