About E-gold

History

e-gold was founded in 1996 by Dr. Douglas Jackson and Barry
K. Downey Transactions using e-gold have grown dramatically since 2005. The
total amount of gold bars (over three tonnes) in the e-gold system is
approaching the size of the national reserves of smaller countries. e-gold now
generates a substantial income from spend and storage fees — there is a charge
of a few cents to make each e-gold "spend" and e-gold itself now earns well over
a million USD per year from fees.

The number of e-gold accounts (as claimed by e-gold) grew
from 1 million in November 2003 to 3 million on 22 April 2006

Role in global commerce

Many small businesses in the U.S., Europe, and Asia, each
with full-time staff, now operate as "digital currency exchangers", doing
nothing other than buying and selling digital gold currency for national
currencies which are not backed by hard assets.

e-gold transactions — a "spend" — are completed
electronically, usually using the web interface, and they always settle by
weight of the metal even if denominated in some other way. A user may send (or
"spend") a tiny amount of gold (a fraction of a gram, ounce or kilogram) to
another user account instantly, anywhere in the world.

Even though e-gold is careful to not advocate any particular
political agenda, as the Liberty Dollar does for example, e-gold could be viewed
as a libertarian form of private currency.

Asset
protection

Unlike fractional-reserve banking, e-gold holds 100% of
clients' funds in reserves with a store of value. Proponents of the e-gold
system contend that e-gold deposits are protected against inflation, devaluation
and other possible economic risks inherent in fiat currencies. These risks
include the monetary policy of countries or territories, which are perceived by
proponents to be harmful to the value of paper currency.

The repository of the actual bullion bars with serial numbers
and other data can be seen using the live "Examiner" function on the e-gold web
site. Bullion is held in allocated storage with Brink's Global Services (part of
The Brink's Company), Transguard Security Services (part of The Emirates Group)
or MAT Securitas Express AG (part of the VIA MAT Group).Clients hold an
unallocated share of this allocated bullion.

The user may take physical delivery of the precious metal
upon payment of an additional fee, and provided the user has an available
balance of at least the weight of the smallest individual item displayed in the
Examiner. This is currently a 32 troy ounce (996 g) gold bar, which is
worth approximately $29,500. However in practice, most users permit the company
to store the metal for them.

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 processing fees (or "spend fees") deducted from
the recipient. As of 2007 these spend fees vary on a sliding scale from about 5%
for spending 0.1 grams of gold to 1% for 5 grams of gold. Over 5 grams of gold,
the fee is capped at 0.05 gram of gold (about $1.48 with gold at US$922 per
ounce).

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
instantly create a "merchant account" (there is only one type of account). All
e-gold accounts carry the same fees and have the same capacity to receive and
transmit e-gold account holdings.