Digital Gold Currencies - How Safe Is it?
  • recognize_1988recognize_1988 August 9
    Digital gold currencies are finally entering the mainstream of investor attention, primarily because of the curiosity about gold and silver coins as investments in their own right. The current recession of 2008 and recurring, is focusing more and more about what economists call "hard money" (gold and silver) as a method of wealth protection. The fact that the usa dollar is over a downward path means alternative currencies in gold and silver coins are receiving far more attention.

    So, if you decide to buy DGC, are you likely to lose your hard earned money? This is a great question because owning gold this way is entirely dependent on the financial health of the company involved. More to the point, the integrity of individuals a part of the company has become the secret weapon to success. Having been associated with digital gold industry in the early days as a possible investor, this is what I've found.

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    Gold currencies certainly are a quite recent form of investing, the rise of which completely paralleling the expansion and advancement of the net. E-gold is definitely the "grandaddy" of such companies, but only being around since 1996 shows how rapidly developing a is. The corporation was hugely well-liked by the online high yield investment program (HYIP) people, which ultimately caused it's decline. This is due to some rather dubious characters involved with HYIP's that caught the eye of the US authorities regarding money laundering and tax evasion. Domiciled within the offshore island of Nevis, E-gold was effectively run from the United States from the well known Douglas Jackson, a reputable pioneer of the profession. Unfortunately having less "Know Your Customer" controls on the those who own these accounts led to the usa authorities clamping down on the company pending tighter account compliance.

    E-gold is still around though a small use. You can't really spend e-gold at the moment as uncertainty with this particular company is hindering its progress. Interestingly, anything you have in e-gold may have increased in value as a result of rapid rise in the gold price. Remember, with these accounts you have gold instead of dollars. The business is rapidly trying to get almost all their customers to upgrade their accounts to think true ownership details. This involves uploading evidence of residence and proof identity documents for the company. Considering this can be in response to US government requests, the reluctance from many of the previously privacy seeking owners of these accounts to comply is obvious. This appears to have led to significant downtime from the e-gold website, which further erodes confidence of it's users. As a penalty unless you upgrade your account, you will be charged a higher holding fee. Interestingly, the fact that the gold backing your bank account is safe and secure in Switzerland or another offshore centres doesn't appear to be an issue.

    A fascinating point is when E-gold was not located in the USA, it could apt to be thriving and be at the forefront of a digital gold industry still. For Douglas Jackson, the founder, being arraigned and also the threat of your criminal conviction for "money laundering" in the US was enough for him to fold to the pressure and comply.

    Safety in the digital gold currency account depends on several factors. Being based in the US does not necessarily mean that it'll survive and prosper. A very similar account to E-gold called C-gold based in Malaysia appears to be thriving, with excellent auditing with the gold owned easy to see over the internet. The integrity of it's owners remains seen, since it is very new, but they are off to an excellent start.

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