Dear Friends, The subject of the DMT system has come up, and as I've been privately doing all kinds of research on it, with insiders and without, I thought I'd throw in my views. This message is utterly public, feel free to post it wherever. It's my opinion only, and if I'm mistaken that's my fault.
Let me get some of the good stuff out of the way first, so the busy can get back to work. I agree with Tim May. DMT and its associated systems and services are not anonymous. They do not solve any of the digital bearer settlement problems like the double-spend problem. And I don't trust people who won't tell me where my gold is stored. Now, let's get the questions out of the way: >> who the hell is DMT? Stands for Digital Monetary Trust. Read back issues of the zolatimes.com or Laissez Faire City Times web zine for exposition by J. Orlin Grabbe the author and idea guy behind the DMT and its offshoots. To add to the joy are more acronyms: DMT Asset Lodgment Trust Accounts (ALTA) Laissez-faire Electronic Stock Exchange (LESE) >> How are they marketing this stuff - They aren't. As I understand it, the original core participants were all LF City founders or members or victims of the Dodge City fractional reserve ATM debacle brought to us by "Midas Mulligan." Visit Scamdog.com for parts of the story, Grabbe's site for other parts, or just duck out on the soap opera until someone comes up with fun tech stuff to do. All subsequent participants were supposed to be by invitation only. Of course I was invited. I was not impressed, and didn't go to the party. > on a website with only an IP address... :-). As I understand it, that web address was intended to help limit the attention of outsiders. I have no idea why that intention was expressed so foolishly. Last I heard, there were $2 million in gold contracts listed on the exchange portion of the system, what is called LESE. One could say that they have a bit of money buzzing through their system, but there are reasons to doubt even that much. A good many of the posted offers appear to be designed to track external markets, and are probably not backed by any sort of money. >> or, who have they gotten to use it thus far? A couple of hundred users, by some estimates, have access to some portions of the system. Possibly a few millions of dollars a week is put through the system. To his credit, I don't think Grabbe has pushed the notion that his system is functionally anonymous or offering a bearer instrument at this point. I do think such features are among his goals, and there is a whole team of Liquid Privacy enthusiasts hanging out at the home of a friend of mine in Costa Rica who are working on various tools and subsystems to get it all working. Tim May is exactly right in that the system is a "trust me" system, where "me" appears to be Grabbe and possibly others. It is thus insecure from as little as a phone call. On the plus side, Grabbe is wealthy enough not to care, and offshore enough to feel fairly distant from prying authorities. He also gets some plus points for his role in exposing the rip-offs and frauds related to the financial instruments of Dodge City, the fractional reserve ATM card fiasco, and the other Midas Mulligan betrayals and ripoffs. In my view, my friend John Kingman was also fairly instrumental in pointing out that the only way to save any portion of Laissez Faire City was to have Midas Mulligan get the boot. According to John, a character self-styled "Adam Selene" was one of the troublesome sorts who prevented the group trying to boot Mulligan and save LF City from taking any meaningful action. So, in case you hadn't heard, LF City is dead. Scamdog.com has one version of events, you'll see others elsewhere. http://www.scamdog.com/freedom_projects/?view=laissez_faire_city While account information isn't associated with clientele names, I do think there are limitations to the privacy provided. However, check it out for yourself. On the down side, as soon as I began to investigate this system as a possible service for Cambist.net Exchange Services to offer our customers, I got all kinds of negative feedback. I've asked half a dozen people who have met J. Orlin Grabbe personally if they would trust him with their money. One has trusted a hundred thousand dollars worth of euro to dollar transactions over the last year, and has kept essentially no money in the system. Not a great vote of confidence when your referral spends international wire fees to get his money out of there. Number two said, and I kid you not, "I wouldn't trust him with my money, but you should trust him with yours." You can imagine the look on my face. I asked him to repeat himself twice, and he elaborated, and the summary is the same each time. Three has a few thousand vested in the LESE system and its related entities. He doesn't trust Grabbe, either, but views the money as stuff he can afford to lose, and if things work out, great. To show you how much marketing savvy is involved, this guy asked Grabbe where the gold was stored. I indicated that such a question would be of interest to me, so my friend asks Grabbe by e-mail to explain where the gold is stored if he buys a gold contract on the system. At first the answer was "read my web site." You can google "J. Orlin Grabbe" as easily as me, and the site might even be eponymous. So, I did. It is filled with excellent pages about all the horrors of the mountain of speculative sewage heaped on the unallocated gold stored by bullion banks, with short positions and gold leasing making a mockery of price and competition. So, the question was pressed, and a mound of filth spewed forth to the effect that my buddy was just a pissant, wasn't worth talking to, had no reason to ask, didn't deserve to know. Buried under this foulness were a couple of lines to the effect that going long on gold on the LESE system amounted to a financial instrument position on the NY commodities exchange or the equivalent. In other words, there was no gold in allocated storage, just another version of the securitized gold which might or might not be deliverable to anyone (probably not). Admittedly, this version of events comes to me secondhand, and came after filtering through a long tirade about the lack of financial qualifications of my friend. Now, everyone I've talked to says they won't trust Grabbe with meaningful amounts of money. Also, everyone I've talked to says he is a very clever guy, extremely knowledgeable about financial instruments, derivatives, exchanges, markets, and the like. Four of the six say he also has "great" credentials as a cryptography expert, though I have two nay-sayers who insist he's a poser. I don't know, and I don't care. At that point, I'd had enough. DMT/ALTA/LESE aren't services offered by http://cambist.net/ and won't be soon. Which is kinda sad because we're expecting to handle $25 million in gold exchanges next year alone. Of some interest to these lists, e-gold is traded on the LESE, but in small quantity. A few hundred grams total, most at rates worse than you can get at OmniPay, a couple of grams at low rates. Among the troubles which users have reported to me, it takes a long time to get funds into the system. It all goes in by bank wire, internationally. I won't say the domicile of the bank, as I'm not actually interested in stirring up any trouble for these guys. Bank wires are slow, and the first wire in seems to take extra long for whatever reasons. Unloading seems to be tedious as well. One user mentioned a lost wire, which was found after the usual hassles. Again, the tedium of international bank wires should be familiar to anyone who does much banking. (You'd think things would have improved since Samuel Morse invented his binary code, but they really haven't.) I'm curious what Internet payment/settlement system Robert Hettinga likes. > https://196.40.46.24/dmtext/jog/dmt_bearercert.htm My reaction is: oh, that's just like a GoldMoney.com payment key. GoldMoney doesn't offer any pretense of anonymity. If you won't provide them with identity papers, they will limit your use of their service. But, GoldMoney is on the Channel Island of Jersey. So, to get information out of them by subpoena takes the approval of the courts in Jersey, where it is not a crime to evade South Africa taxes. It isn't any sort of anonymity tool, but it is a financial privacy tool just like Luxembourg or Swiss bank accounts are. GoldMoney.com has offered payment keys since at least the May 2002 Las Vegas Money Show and Foundation for Economic Education Festival. I may have redeemed one of the first hundred or so, for about a dollar's worth of gold. Printed or e-mailed, specific to a user or open to the first to claim it, payment keys are a lot easier to key into the system. Fun stuff. Robert writes, "One mustn't let the best kill the good enough, certainly, though, without blinding, it'll be interesting if this airplane lifts its wheels, security-wise." No doubt there is plenty of work going on in the offices and living room and kitchen where the guys from Liquid Privacy are hanging out. (Google their site if you like, its probably also eponymous.) However, I don't think the digital bearer cert at DMT is much of anything. There is a huge element of "trust us" as Tim May points out, in the whole system, which would be fine if.... ...if I knew the principals, as I know the principals behind e-gold, e-Bullion, GoldMoney, 1MDC, Liberty Dollar and Crowne Gold, there would be a basis for trust. Trust may be earned, it is not a given. ...if I knew where the gold was. I seem to be told that the gold is just a financial transaction which represents a claim on the delivery of gold from somewhere at some time specific in the future, and whoa betide the man who wants to insist on physical delivery. ...if I were getting stunning references on the principals. Instead, there are a whole bunch of swirling controversies surrounding these guys, and stunning referral comments like "I wouldn't trust him with my money, but you should". All free market exchange is built on some level of trust. I was able to project enough trust on the e-gold, e-Bullion, GoldMoney, 1MDC, the Liberty Dollar, and Crowne Gold to see my way clear to making a market for them. Trust was built on thousands of exchange events which went well, so that I now trust very substantial resources to each of these systems. On that basis, I know of two people who are trusting the DMT/LESE system to some extent, with money they can move out of it quickly or they can afford to lose. There may be something there, and it may arise sooner than one might think, but it isn't there yet. I do agree with Robert's point, though, that there is a need to let people work through their good enough systems and workarounds until they get something right. Laissez Faire City was such an effort. It brought a lot of people together behind the idea of building a new country founded on principles of freedom. Even Scamdog is convinced it wasn't a scam. Sadly, a lot of those people brought their money, and certain disreputable individuals - Midas Mulligan in particular, separated enthusiasm from money. Reminds me of the 1992 to 1994 Atlantis Project fiasco which Eric Klien headed. We press forward, though. There are new country projects in East Africa http://www.awdal.com/ and on Vancouver Island - the Coast Salish territories, in Costa Rica - Limon Real http://www.limonreal.com/ and dear old Sealand which a few of us are working to expand. In his .sig file, Tim May includes the following thought which bears comment, "The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant." --John Stuart Mill I utterly agree. The initiation of force is wrong, and it always will be wrong. Defensive force to protect others from harm, and retaliatory force to prevent others from being harmed further, are justifiable. However, there are exactly zero countries with as much as an acre of territory on Earth which are founded on this principle. To get there from here, privacy and anonymity tools are needed. Financial tools are needed. New and better countries must be built. Free zones and free ports must be exploited. Tax havens should be utilized to starve the state. With these tools and techniques we may yet create a free civilization on Earth capable of reaching the planets, moons, and asteroids in this Solar System, and thus expand out to the stars. Fortunately, there are dozens of bright minds working these problems. Unfortunately, we can't get on a commercial airliner without being bullied by thugs. Regards, Jim http://goldbarterholdings.com/ http://cambist.net/ http://goldbarter.com/ http://merchantgold.com/ http://www.two-cents-worth.com/?101468&EG --- You are currently subscribed to e-gold-list as: archive@jab.org To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
