First, I would like to thank Dr. Jackson for the opportunity to contribute to the e-gold blog. I met Doug about three years ago and quickly became impressed with what he and his team have done with e-gold. I’ve learned a great deal, and continue to do so, about the theory behind e-gold, much of which is coming forth in this blog. Despite all the new education, however, I still find myself taking a more mercantile view. How does e-gold make it better to buy and sell on the Internet?
e-gold is widely viewed as a system that protects payments to the recipient. Payments are immediate and irreversible. For ecommerce merchants this feature is enormous. They do not need to be concerned with fraudulent payments or chargebacks. It’s not like receiving a credit card (or intermediary) payment when after you deliver, the charge can well be reversed. e-gold’s catch phase “Get paid, stay paid” rings true. e-gold also brings advantages of lower cost, simplicity of use, and security. Regardless of these benefits, however, the assuredness of payment may make the difference between an online merchant’s success and failure.
This market distinction has been a hallmark of e-gold since its inception. Less recognized, however, are e-gold’s corresponding and extraordinary benefits for consumers. The greatest threat to consumers buying online is their identity or account information being compromised. When you use a credit card, you offer up your name, address, and often your card’s special code; all now associated with your credit card number. If you use an e-check your name, account number, and bank routing number are open to possible public view. Secondary validation protocols may require phone numbers and the “last four digits…..” Suspicious websites and various forms of malicious code, some of which could be associated with more trusted Internet locations are constantly probing for your personal information. I’m sure you get my point; you are exposing a lot of personal information for the world to see and the world is looking. Conservative estimates indicate nearly 10M persons in the U.S. alone have their identity compromised online every year with as much as 50% of the total U.S.’s population already having been affected through all means. When the risk is so high, why would anyone want to expose their personal information when they do not need to?
With e-gold the receiver does not see personal information, which means the world can’t look over his shoulder and see it also. Your identity is protected. It is not unlike handing the store clerk cash because you do not want him to walk away with a credit card imprint “for future use,” except that with e-gold the merchant can be next door or on the other side of the world.
But don’t confuse e-gold with cash...
e-gold is actually easier to use and offers better protection. It’s easier because you do not need to be face to face to transact. Also, when a cash deal is done it’s done, there is no traceable record and proof of payment is not definite. With e-gold, there remains a permanent record including the identity of the recipient and the person making the spend. Despite allegations that e-gold is anonymous it is not. Every transaction has a permanent record that includes not only typical identifying data, but transactional data that is traceable in its own right. Each account and all their transactions - the entire web of connections - is permanently traceable so ultimate identification is absolute. e-gold is not at all anonymous – never was and never will be. No one can directly deposit to or withdraw from the e-gold system, you can only obtain e-gold from someone who already owns it making the in- and outexchange of e-gold for national currency an additional level of establishing identity. This lack of anonymity has shown itself to the surprise and chagrin of persons who have thought otherwise. And for the buyer who enters a dispute, this means they have a clear detailed record of payment, no debate.
You do not need a credit card and have your credit history verified once again, to use e-gold. Properly open an account, identify yourself accurately, fund your account and go ahead and spend. Since no credit is involved the intrusive check of your history is not necessary.
All the other features that benefit a merchant also benefit the buyer. It’s less expensive to use e-gold. Competitive market forces will transfer that savings back to the consumer. A smart merchant may want to offer a discount for buying with e-gold. It’s much easier to use e-gold, no need for all that time to enter data you don’t really want to enter anyway and the spend is secure.
You should take great care to know to whom you are spending, and that you are buying what you want. Shouldn’t this be the case anyway, whether you are using credit or e-gold? It is also always prudent to protect your identity and your account data. If you hand a criminal the keys to your car or the keys to your account, I’m not aware of any ways to protect them. Anything you can do to not hand them the keys, or information, goes a long way to protecting yourself.
I've had an e-gold account since December 1998, and have used it extensively. Bill does an excellent job of capturing the important distinctions that make e-gold great. Great post, Bill.
Posted by: Jim Davidson | September 13, 2007 at 02:24 PM