Re: BIZ: Digital Gold Offers Liquidity to Dollar-Spooked Investors

From: Chris Rasch (
Date: Sun Feb 18 2001 - 22:11:38 MST wrote:

> I think you misread the article; the growth was from mid 1999 to the
> end of 2000, or 18 months rather than six. Still that is a substantial
> growth rate.

Yes, you're right--thanks for pointing that out. Sorry for the error.

> We had some discussion here last year about online "virtual stock"games like
> StockGeneration. Most of these are Ponzi schemes and fail
> eventually, leaving a lot of unhappy "investors". Several of these
> companies were using e-gold as their payment service because it did not
> have the provision for customers to contest payments as they can with
> credit cards. I had the impression that a substantial part of e-gold's
> growth in early 2000 was due to these games, but I haven't been following
> it lately.

That seems like a plausible explanation for the growth rate. Which is
unfortunate, because it gives regulators an excuse to go after, to
"protect" the Ponzi victims. However, such marginal "businesses" (Ponzi schemes,
gambling, porn) seem to be quite helpful in initially overcoming the chicken/egg
problems that often plague new technologies like this--e.g. no customer wants to
go to the trouble to sign up to use e-gold unless many online businesses accept
e-gold payments and vice versa. Lust and greed often seem to be required to
overcome the inertia of the status quo.

Incidentally, a nice summary of the history of the original Ponzi scheme is
available at

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