e-gold FAQ

"e-gold is to money what e-mail is to letters" J.P. May

What is e-gold:

What is e-gold?

E-gold is an online payment system. E-gold is gold itself circulated electronically. Famous entrepreneur J.P. May says, "e-gold is to money what e-mail is to letters."

From the e-gold website:

e-gold is an electronic currency, issued by e-gold Ltd., a Nevis (offshore) corporation, 100% backed at all times by gold bullion in allocated storage. Other e-metals are also issued: e-silver is 100% backed by silver, e-platinum is 100% backed by platinum, and e-palladium is 100% backed by palladium. However, the most popular e-metal (by an overwhelming margin) is e-gold. e-gold is integrated into an account based payment system that empowers people to use gold as money. Specifically, the e-gold payment system enables people to Spend specified weights of gold to other e-gold accounts. Only the ownership changes - the gold in the treasury grade vault stays put. Open your free e-gold account here. E-gold is here to stay. E-gold is always as good as the gold it's backed with - this year, next year, a thousand years from now.

The big difference between e-gold and gold held in a depository in your name is ease of use. With e-gold you can buy it cheaply, quickly and at almost any amount (no minimum!) - with gold held in a depository you can only buy by the bar and then if you want to sell you will have to sell the whole bar. As you can understand this is not for everyone! Another advantage of e-gold over real gold or gold held in a depository is the costs, e-gold can be bought and sold at a total cost of only 2% or 3% where when you buy a gold bar you can pay up to 15% (buying and selling it).

Which alternative currency is used most?

E-gold, probably followed by Evocash and OSGold. To get an idea of the extent of e-gold usage, check out the e-gold statistics. Usually the transaction volume in any 24-hour period is about $2 million equivalent. We've seen it as high as $3 million.

Where is e-gold located?

The real gold part of e-gold is stored in vaults in JP Morgan in London (52%), MAT Securitas Express AG in Zurich (3%), and Transguard in Dubai (45%) in the form of approximately 400 ounce bars of gold.

The electronic part of e-gold is conveyed to the web from servers in Melbourne, Florida.

Is e-gold a worldwide currency?

Yes. Gold is already an international currency. What e-gold does it take that one step further and makes this international currency usable over the Internet.

The number of e-gold accounts is growing by 20% month on month and more and more merchants are accepting e-gold. Today, there are over 1,000,000 e-gold account members.

You can use e-gold to send money to friends and family in a safe, quick and inexpensive environment.

How quick are e-gold transactions?

E-gold payments clear instantaneously, no matter how large the payment, no matter how far apart the Spender and Recipient. Once your account is initially authenticated you eliminate the need to authenticate each and every transaction as is the case with a credit card. E-gold speeds transactions up and benefits both customers and merchants.

What can you do with e-gold?

Pay money (gold) to other e-gold account holders.
Purchase items from vendors who accept e-gold.
Purchase memberships on sites that use gold.
Make transactions of any size.
Make transactions in any major currency equivalent, or by weight of any of the four metals that you hold.
Through a process called OutExchange, pay your bills or make pre-arranged payments to merchants.

It is a complete monetary system that provides the potential for anyone entering the system to take payments from people across the world, and even construct entire businesses within the system. e-gold means no bank or credit-card middleman when you make net transactions, whether purchases or donations.

that is:

no bank taking a cut from your vendor for each transaction (but also see How much will this cost?)
no credit card company or bank taking a currency conversion fee from you
no bank wanting the vendor to keep large sums on deposit
no bank wanting your vendor to pay even more charges for �secure transactions� (these last two are required for credit card transactions on the net);

result:

you pay less and your recipient gets more.

Why? Because e-gold Ltd takes a much smaller cut, so the vendor can sell to you for less. For donations, more of your donation goes to the person or organisation you�ve chosen to help, rather than into a bank�s coffers.

yes, you have to set up a free, no obligation e-gold account (it takes only a few minutes),
yes, you pay a 1% fee for that account�s actual holdings each year,
yes, you buy e-gold to put into your e-gold account and which you use for payments on the net and elsewhere.

but

no, you do not subsidise merchant bank charges of 3 � 10% on each and every transaction, nor monthly secure transaction and statement charges;
no, you do not pay currency conversion charges of around 3%.

E-gold works like this...

You transfer some yen, euros, pounds or dollars etc. to an �independent exchange market maker�, who buys some gold for your account and deposits it in a super-safe vault. You then spend your now electronic gold (in specified weights of gold, or its currency equivalent) over the Internet or via specialised debit cards, just as you would any other currency. The real gold, meanwhile, stays in the vault; its ownership simply moves from one e-gold account to another.

For example: you want to make a donation of $100-worth of e-gold (or 10.8 grams of e-gold, or 0.34oz of e-gold - very rough equivalents) to your friend.

Once you have sent that instruction to e-gold Ltd , the e-gold is 'spent' from your e-gold account to that of your friend. Only the ownership changes - the gold backing the e-gold in the treasury grade vault stays put.

e-gold is accounted by weight of metal, not US$ or any other national currency unit. Weight units have a precise, invariable, internationally recognized definition. Additionally, precious metals, gold in particular, enjoy a long history of monetary use around the world. Thus, e-gold is ideally suited for international transactions. Although e-gold is accounted by weight, the e-gold payment system allows gold to be expressed in terms of eight major national currencies .

For example:

10 troy oz worth of e-gold
5.3 grams worth of e-gold
US $100.00 worth of e-gold
CHF 685.88 worth of e-gold

How much will this cost? What are the e-gold fees?

There are two sets of fees in the e-gold system: Spend and Agio fees.

Spend fee

E-gold charges a fee to the recipient of every payment. The fee is called the "payment receive fee." The recipient pays 1% of each transaction, up to US$ 0.50. The fee is debited in e-metal from the payee. So, if you spend more than $50 to someone, the payment receive fee they are charged is 50 cents. If someone gives you some e-gold, then this is what you will pay. You can go here to calculate 'send' fees: http://www.e-gold.com/unsecure/fees.htm .

A storage fee (technical name: agio fee)

E-gold charges a storage fee for storing your gold. This fee is called the "storage fee." The amount of this fee is 1% of the amount of gold you have in your account each year. This fee is charged monthly based on the average daily balance during the preceding month. So, each month, one twelfth of one percent of the amount of gold that was in your account the previous month is removed when this fee is assessed. (If you empty your e-gold account before this fee is assessed, your account can have a negative balance.) Also see http://www.e-gold.com/unsecure/fees.htm for details.

What happens when I use e-gold?

When you want to transfer a quantity of e-gold (or e-silver or e-platinum or e-palladium), the transfer is made from your passphrase-protected account to your recipient's account. (Your passphrase is stored in the e-gold database in encrypted form so even e-gold Ltd cannot learn it. So it is important that you don't forget or lose your passphrase!)

What is the risk of governments closing down these systems and seizing their assets.

They are generally domiciled in reasonably safe jurisdictions. The risk is probably no greater than that of a US government agency ordering a US bank to freeze or seize your US bank account. See also: The Nature of Government to "government as legal plunder."

E-gold Corporate History:

Gold & Silver Reserve, Inc. (G&SR), a Delaware, USA company, developed and deployed this 100% gold-backed digital currency payment system in 1996, and through 1999 administered both payment settlement and currency exchange. The e-gold system and number of account holders grew very slowly in its first three years (approximately 3000 accounts), but began to grow exponentially since 1999 after e-gold gained more and more media and market exposure, and since that time it has experienced a growth rate of 8-20% per month.

Currently there are about 1,000,000 e-gold accounts.

In January 2000, the core e-gold roles of Issuance and Settlement were devolved to e-gold Ltd., a Nevis W.I. company created specifically to serve as the General Contractor responsible for performance of the e-gold Account User Agreement. This separation of roles was designed to further assure e-gold's freedom from default risk and finality of settlement by dissociating the e-gold Issuer from business risks relating to exchange. G&SR, Inc. continues to serve as Operator of the e-gold payment system, as well as offering its own innovative set of hybrid currency exchange services, known as OmniPay .

Directors:

Dr. Douglas Jackson - Chairman

Dr. Jackson is a physician, board certified in Radiation Oncology. He received his M.D. from Penn State in 1982. In 1986 he completed residency in Radiation Oncology at the National Cancer Institute, Bethesda, Maryland and was certified by the American Board of Radiology. From 1986 through 1992 he served as a Major in the U.S. Army Medical Corps, Chief of Radiation Oncology at the Brooke Army Medical Center, Fort Sam Houston Texas. In 1992 he left active duty to assume duties as Medical Director for Radiation Oncology at Holmes Regional Medical Center in Melbourne, Florida. He was a founding partner of Florida Oncology, a group practice providing hospital based oncology services.

In 1995, based on private study regarding monetary influences on credit and the business cycle he conceived of e-gold as remote payment system that did not require an obligatory financial intermediary. The e-gold system was deployed online in November 1996. In 1998, Dr. Jackson sold his interest in Florida Oncology to devote full time attention to the e-gold enterprise.

Barry K. Downey - Director

Mr. Downey is a co-founder of the e-gold enterprise. He serves as Secretary, Vice-President and Director. Mr. Downey is a founding partner of Smith & Downey, P.A., a law firm concentrating in general business, employee benefits/executive compensation, and labor and employment law, which firm serves as general counsel to the Company. Admitted to bar, 1986, Maryland; 1989, District of Columbia; 1991, U.S. Supreme Court. Former Chair, Maryland State Bar Association Employee Benefits Committee. Co-Author: Nonqualified Deferred Compensation Answer Book, Panel Publishers, 1999; Nonqualified Deferred Compensation Answer Book: Forms and Checklists, Panel Publishers, 1995.