> From: "Robert S.Z." <[EMAIL PROTECTED]> > Date: Thu, 26 Jun 2003 22:46:03 -0400 > To: "e-gold Discussion" <[EMAIL PROTECTED]> > Subject: [e-gold-list] Re: A tale of Exchangers, Merchants and Markets
> --- I don't mind playing more than most, and indeed am doing just that. > But, I don't think that the odds are fair ;o) > Let's face it, e-gold / Omni won't change just because a dozen or so > exchangers suggest them to. BUT, that was never my intention. What I would > love to see happening is for the largest exchangers putting their heads > together and starting to calculate that my suggestion would make them more > money. If they did that, smaller exchangers would follow and eventually > Omni would come around as well. But I'm sure, they would be the last ones > to follow ;o) Here is what would happen. Let's say every exchange provider changes to your system and Omnipay stays the way it is. All rational users will buy from exchangers at spot, and instead of selling to exchangers at 5-10%, they would sell to Omnipay at 2%. So exchangers are selling tons of e-gold; Omnipay has tons of e-gold coming in. Exchangers will run out of e-gold and need to get more, and guess what, Omnipay is the only issuing authority and they charge 2%. Exchange providers would go bankrupt. As for Omnipay, they can sell the gold bars and take incoming e-gold all day. Omnipay is like the Fed and exchangers are like member banks in this scenario. Omnipay is where e-gold enters and leaves the system, so they set the rules of the game. Back when they moved from spot/4%+ to a 2%/2% straddled spread, exchangers said no matter, we will defy Omnipay and accept e-gold at spot and sell for 5%. But this is what I said then and I'll restate it here: In this scenario all rational users WILL sell to exchange providers at spot, and buy from Omni at 2%. Exchange providers will end up with tons of inventory and few buyers, Omnipay ends up with tons of buyers and no gold coming in. Exchange providers can't meet outexchanges without selling e-gold to Omnipay at 2%. Omnipay couldn't care less because they can always buy more gold bars and get more gold into the system. And what happened is, predictably, there was a glut of e-gold among exchangers, so they migrated to accepting e-gold at less than spot and reducing their selling price. Omnipay is the central authority and e-gold dealer of last resort. All exchange providers working together can not defy Omnipay as only Omnipay has access to the gold which gives value to your e-gold credits. The e-gold circulation business is like a pyramid, with e-gold on the bottom, Omnipay in the middle, and all exchangers on top. Anyway, the key to achieving e-gold's wider acceptance is for e-gold to be worth spot. If $10 of e-gold is worth the $10 of traditional payments, there will be little friction for merchants to accept it. Lot's of people and merchants accepting it = lot's of e-gold stays in the system, e-gold changes hands several times for goods and services in the system. Like JMR said, this was the previous policy and what e-gold used to "jump start" the system. The e-gold system still needs much more jump-starting until such time when it is very widely accepted. If you pull the nose of your airplane up before you get sufficient speed you will stall. Until e-gold circulates as a currency in its own right instead of being used in practice as a payment system (gold-based paypal with irrepudible payments), e-gold should be worth spot. - John --- http://cambist.net --- You are currently subscribed to e-gold-list as: [EMAIL PROTECTED] 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.
