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the problem, I think, is that anyone offering 'private' electronic money is going to go the way of e-gold. The government simply won't tolerate it. (I'm not m

by lsc 16y ago

the problem, I think, is that anyone offering 'private' electronic money is going to go the way of e-gold. The government simply won't tolerate it. (I'm not making any statement about the legitimacy of the government blocking private currencies... I'm just pointing out that the historical evidence has been that the government won't tolerate private electronic money.)

ynniv 16y ago
What about Green Dot is an alternative currency?
- sethg 16y ago
  If someone could buy a prepaid debit card for cash without showing ID, and add money to it without showing ID, and spend from it without showing ID, then Alice could buy a card, Bob could load $5000 onto it, and Carol could read the card number over the phone to David. To achieve the same kind of anonymity today, someone would have to accumulate $5000 in cash and put it in David’s physical possession.
- lsc 16y ago
  I don't think the government minds alternative currencies. The possibility of easily shifting large amounts of currency anonymously, I think, is what the government has a problem with. Because green dot checks id, etc... it's not a problem. If E-gold asked for your ID, your SSN and reported things as a bank would from the beginning, I don't think e-gold would have had an insurmountable problem, either. By "private" I meant "allows anonymous users" not "owned by someone other than the government." which is very unclear. I've been up all night working and my grammar is degraded.
  - ynniv 16y ago
    Your comment used to say "alternative" where it now says "private electronic". This drastically changes the meaning, and makes my comment irrelevant.
    - lsc 16y ago
      yeah, I really should have put in an Edit: in that, sorry. It's time to log off.
tocomment 16y ago
What happened to e-gold?
- chopsueyar 16y ago
  In 2007 the proprietors of the e-gold service were indicted by the United States Department of Justice on four counts of violating money laundering regulations. In July 2008 the company and its three directors pleaded guilty to charges of "conspiracy to engage in money laundering" and the "operation of an unlicensed money transmitting business" in the U.S. District Court for D.C.[1] The company faces fines of $3.7 million. As of November 2009 the company's website states "As e-gold Users are aware, by agreement with relevant authorities including the U.S. Department of Justice, e-gold has suspended all e-metal Spend activity subject to meeting certain licensing requirements. As a result, e-gold Users have been unable to engage in any transactions, including exchanges, that would require either receiving or making an e-metal Spend from the accounts they control. We are, however, working diligently to develop a means by which account Owners will be able to access the value in their account". http://en.wikipedia.org/wiki/E-gold http://en.wikipedia.org/wiki/E-gold
  - tocomment 16y ago
    I don't get it. Did they actually do something wrong (on purpose?) or did the gubment make up the charges because they didn't want competition for the dollar? Could someone start a legit service like this today?
    - lsc 16y ago
      >Did they actually do something wrong (on purpose?) I personally believe the e-gold guys were working in good faith to produce an alternate currency, one that functioned like cash, but that was backed by actual gold. However, it is generally agreed that the majority (or at least a significant portion) of the business transacted with e-gold was illegal in nature, and much like cash, once you spend your e-gold, you can't call up the e-gold company and tell them to reverse the transaction. you have to get the other party to return the money, and much like cash transactions in the real world, that can be quite difficult. In fact, the anonymous and electronic nature of e-gold made it better suited for many criminal activities (especially fraud) than cash, as the fraudster never had to actually meet his mark. Obviously, all this caused a lot of complaints. Add in the fact that the anonymous nature of E-gold meant that most people weren't paying taxes on the transactions in question, and the government was going to step in and shut them down. Now, I'm no lawyer, but I'd bet that if you set up something like e-gold tomorrow and made it non-anonymous, that, by itself, would make the thing largely acceptable. You would probably need to set yourself up as a bank or something, and you would probably need to set up something to make it easier for your customers to figure the taxes they owe, (and for the IRS to figure the taxes they owe) but I think the big barrier was anonymity. As a secondary step, some sort of dispute resolution protocol like paypal has would probably also help, but I believe that is secondary to the first concern.

by lsc 16y ago

ynniv 16y ago

What about Green Dot is an alternative currency?

sethg 16y ago
If someone could buy a prepaid debit card for cash without showing ID, and add money to it without showing ID, and spend from it without showing ID, then Alice could buy a card, Bob could load $5000 onto it, and Carol could read the card number over the phone to David. To achieve the same kind of anonymity today, someone would have to accumulate $5000 in cash and put it in David’s physical possession.
lsc 16y ago
I don't think the government minds alternative currencies. The possibility of easily shifting large amounts of currency anonymously, I think, is what the government has a problem with. Because green dot checks id, etc... it's not a problem. If E-gold asked for your ID, your SSN and reported things as a bank would from the beginning, I don't think e-gold would have had an insurmountable problem, either. By "private" I meant "allows anonymous users" not "owned by someone other than the government." which is very unclear. I've been up all night working and my grammar is degraded.
- ynniv 16y ago
  Your comment used to say "alternative" where it now says "private electronic". This drastically changes the meaning, and makes my comment irrelevant.
  - lsc 16y ago
    yeah, I really should have put in an Edit: in that, sorry. It's time to log off.

tocomment 16y ago

What happened to e-gold?

chopsueyar 16y ago
In 2007 the proprietors of the e-gold service were indicted by the United States Department of Justice on four counts of violating money laundering regulations. In July 2008 the company and its three directors pleaded guilty to charges of "conspiracy to engage in money laundering" and the "operation of an unlicensed money transmitting business" in the U.S. District Court for D.C.[1] The company faces fines of $3.7 million. As of November 2009 the company's website states "As e-gold Users are aware, by agreement with relevant authorities including the U.S. Department of Justice, e-gold has suspended all e-metal Spend activity subject to meeting certain licensing requirements. As a result, e-gold Users have been unable to engage in any transactions, including exchanges, that would require either receiving or making an e-metal Spend from the accounts they control. We are, however, working diligently to develop a means by which account Owners will be able to access the value in their account". http://en.wikipedia.org/wiki/E-gold http://en.wikipedia.org/wiki/E-gold
- tocomment 16y ago
  I don't get it. Did they actually do something wrong (on purpose?) or did the gubment make up the charges because they didn't want competition for the dollar? Could someone start a legit service like this today?
  - lsc 16y ago
    >Did they actually do something wrong (on purpose?) I personally believe the e-gold guys were working in good faith to produce an alternate currency, one that functioned like cash, but that was backed by actual gold. However, it is generally agreed that the majority (or at least a significant portion) of the business transacted with e-gold was illegal in nature, and much like cash, once you spend your e-gold, you can't call up the e-gold company and tell them to reverse the transaction. you have to get the other party to return the money, and much like cash transactions in the real world, that can be quite difficult. In fact, the anonymous and electronic nature of e-gold made it better suited for many criminal activities (especially fraud) than cash, as the fraudster never had to actually meet his mark. Obviously, all this caused a lot of complaints. Add in the fact that the anonymous nature of E-gold meant that most people weren't paying taxes on the transactions in question, and the government was going to step in and shut them down. Now, I'm no lawyer, but I'd bet that if you set up something like e-gold tomorrow and made it non-anonymous, that, by itself, would make the thing largely acceptable. You would probably need to set yourself up as a bank or something, and you would probably need to set up something to make it easier for your customers to figure the taxes they owe, (and for the IRS to figure the taxes they owe) but I think the big barrier was anonymity. As a secondary step, some sort of dispute resolution protocol like paypal has would probably also help, but I believe that is secondary to the first concern.