It's easy to see why gold was humanity's currency of choice for all those centuries. It doesn't tarnish or rust. It exists in limited quantity, making it hard for governments to manipulate. And it looks and feels comforting, a kind of metallic analogue of ice cream and chocolate.

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It's also easy to see why we dumped it. A pocket full of gold is bulky, heavy and noisy, making it a poor choice for everyday use. And governments hate money they can't debase, which pretty much guaranteed that gold (and silver) would eventually be pushed out of circulation by fiat currencies like dollars, yen and euros.

But that may be about to change, thanks, ironically, to the Internet. Electronic payment systems have reduced the concept of money to its essence: information. Most payments are now simply electronic debits and credits, making it possible do the bulk of your getting and spending via credit cards, online checking accounts and, soon, payment-enabled cell phones.

Converted into bits in this way, gold once again becomes a viable -- some would say vastly superior -- kind of money. Conceptually, it works like this: You transfer some dollars or euros or whatever to a firm that buys gold for you and deposits it in a super-safe vault. You then make payments from this account via credit card or PC, and the gold -- without ever leaving the vault -- is credited to the recipient's account. If the recipient prefers dollars, the gold is electronically converted by exchanges, which now do the same with the world's other currencies.

The first attempt to turn this theory into reality is called e-gold, and so far, so good. The number of e-gold accounts rose from 3,000 in mid-1999 to 130,000 by the end of 2000. The amount of e-gold in circulation (which by definition is identical to the amount of gold locked away in its vaults), has grown from 5,000 ounces in 1999 to 43,000 ounces. "We finally hit our millionth transaction in November," says e-gold founder Douglas Jackson, "and we hit a million and a half in December." All, notes Jackson, with a marketing budget of zero.

Next week, e-gold gets its first serious rival. Called GoldGrams, it's the brainchild of James Turk, editor of the Freemarket Gold & Money Report newsletter and all-around big name in gold bug circles.

He has, he says, been planning for this since the 1970s, when he noted with alarm how the failure of Germany's Herstadt bank nearly brought the international monetary system to its knees. "I thought, this is crazy, how can a medium-sized German bank failure do this to the entire global monetary system? So I re-educated myself and read everything I could on money and currencies." By 1979, the solution had become clear: an electronic currency based on eternal, incorruptible gold.

That was not only pre-Internet, but pre-PC, so nothing came of the idea for a decade. "But by the late 1980s I realized that the tech was becoming available, so I started to develop the intellectual property," including, he says, two basic patents governing gold-based electronic currencies.

The Gold Economy

Now, a currency doesn't do you much good unless it comes with all the accoutrements, like credit cards, banks willing to pay interest on deposits and stores willing to accept it in payment.

Right now, that's a problem. But very soon it won't be. The way Disney World catalyzed the development of a whole city in the central Florida orange groves in the 1970s, electronic gold is spawning an embryonic, gold-based economy. OmniPay, the operator of e-gold's payment system, "gives a user the sensation of having online checking," says Jackson. "To pay my MasterCard bill, I pay OmniPay in e-gold and they cut a check out of their account to pay the bill."

Standard Reserve , an e-gold debit card, now offers gold bugs the convenience of plastic. "You can put it in an ATM and withdraw dollars from your e-gold account," says Claude Cormier, editor of the Quebec-based Ormetal Report and a big early backer of the new currencies.

And MetalSavings , a sort of gold S&L, will soon start paying interest on e-gold deposits. "With e-gold, you pay 1% per year to store gold. With [MetalSavings], you earn interest on the gold instead," says the bank's marketing statement.

Barely a year into gold's restoration, "It's possible to live in the U.S. and exist outside the dollar economy," says Jackson.

Not that many Americans will want to. Instead, the real test market for gold currency is international trade. "It's very difficult for a lot of small businesses to be paid in a cost-effective fashion [when trading internationally]," says Jackson. "Merchant credit card accounts are either very costly or completely unavailable for small businesses in Eastern Europe or Africa." For such companies, he believes, e-gold's fee of 50 cents a transaction (plus an annual storage charge of 1% of the account balance) makes it a radically cheaper alternative.

As for why this is appearing in a column on stock strategies, consider e-gold's growth rate. Remind you of anything? That's right, dot-com, circa 1999. Give it another six months at this pace and you've got a wicked IPO candidate.

The other reason is that these currencies are an alternative to gold stocks, with the advantage of being spendable. If the dollar tanks -- and I'm increasingly afraid it's going to (see my Dec. 8 column ) -- it might be nice to own money that goes up in value for a change.