The increasingly heated gold investment has stimulated the emergence of a new investment style---the e-gold investment system. Lets take a close look at it.
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and is a system which allows the instant transfer of gold ownership between users.
There are over two million e-gold accounts.
About one quarter of those are active.
As of January 2006, e-gold had 3,376,279 grams of gold in storage, which is worth approximately $61 million.
There are typically 50,000 e-gold spends each day,
with a total value each day of about $6 million (that is, about 350 kilograms of gold).
In comparison, PayPal handles transfers of approximately $60 million per day.
Exchanging fiat currency
e-gold does not sell its currency directly to clients.
Instead numerous digital gold currency exchangers,
such as OmniPay (a sister company of e-gold),
act as market makers selling e-metal in exchange for fiat currency and a transaction fee.
Conversely, these exchange providers will sell fiat currency in exchange for e-metal, and a transaction fee.
In this manner e-metals can be converted back and forth to a variety of national currencies.
The amount of a particular fiat currency or e-metal necessary to complete a transaction is
determined by the spot price of the metal in relation to the value of the fiat currency.
e-gold is known as private currency as it is not issued by governments.
Compared to other systems like PayPal, the process of buying e-gold can be confusing
to a person unfamiliar with the e-gold system.
e-gold, unlike e-Bullion for instance, does not sell digital currency directly to the user.
According to their website the reason e-gold do not provide an in-house exchange service
is so there can be no debt or contingent liabilities associated with the business,
making e-gold Ltd. absolutely free of any financial risk. They claim e-gold Ltd.
does not possess currency of any nation or even have a bank account.
Fees
e-gold charges an account fee (or Agio Fee) of 1% per annum (deducted in monthly payments) on all e-metal stored.
Spending e-gold is free, with transaction fees (or Spend Fees) deducted from the recipient.
Spends are often much cheaper than traditional forms of payment,
particularly international forms of payment. e-gold spends clear instantly,
in contrast to cheques or credit card transactions.
Unlike other online payment systems such as PayPal,
there are no distinctions between merchant and non-merchant e-gold accounts.
Anyone can create a "merchant account" (there is only one type of account) instantly.
All e-gold accounts carry the same fees and have the same capacity to receive and transmit e-gold account holdings.
