Rule of law

First off, E-gold is back online, what was and is disturbing still is that both e-gold and omnipay (who does actual movements of bulk gold in and out, although it might be technically possible without omnipay/g&sr, as far as I am aware all market makers use omnipay) both were off the net all weekend. Generally there is a large amount of trust in e-gold (otherwise there would not be such a big bunch of bars sitting there), they are however still legally required to honour court orders. This is where I get to the whole rule of law bit that I hinted to in my earlier post. Click the link up top and have a read, then come back and ponder.

It is possible that e-gold had been forced to co-operate in a large way, possibly even without court orders. The has been some heavy pressure examples among smaller market makers. If e-gold wants to continue to operate it may even have to keep its mouth very shut about the whole deal. Maybe it happened and maybe it didn't. But it could!

Just who can be trusted? Imagine you have a really great financial cryptosystem in place. Is it tank proof? Iran is due to open its euro denominated oil burse on March the 20th 2006. Iran is due to be waged war on towards the end of March because of its nuclear ambitions. Again, ignore my paranoia but think of the lesson implied.

Governments are not going to obey the law if they see something as a threat, financial cryptography that is people empowering is a threat to governments.

Is it even possible to have a payment system that is not physically vulnerable. Imagine you are a government, even a smallish one and you discover a payment system that is used by terrorists, or worse say a Jim Bell special ;) What is to stop you from destroying it? All I can think of is to have governments as customers.

Are the only options to infiltrate the world bank or to mint physical coins?

I eagerly request any other options with the best getting a 1 gram gold digital certificate

Financial Cryptography in Trouble -updated

For anyone who has had a serious interest in setting up a finacial cryptographic system, I am thinking here of payment systems, there has always been an issue of trust and security. Trust that the financial instrument is really there and security that it is not going to be removed.

Something has happened that will shake the future of financial payment systems.

E-gold went offline.

Update: It seems that there is a non-paranoid explanation, but all the concerns of trust still exist. E-gold claim that due to a mixup over paying some bills they have been de-registered in Nevis. Why they are off the net so long still seems odd. Do pretend not to notice my paranoid delusions. Do however put some thought as to how fragile financial security can become. Sooner or later payment systems will be heavily targeted, a way needs to be found that keeps them running under the most adverse conditions imaginable.

Not earthshaking? Just some maintanence? Could be, hopefully has a nice explanation, but it feels different. If I had to guess I'd say some Govt. paper pusher is looking through my transaction history right now. Personally I trust e-gold to act properly, but what happens when Government steps in. How do you maintain security if a government can confiscate or simply as I suspect, halt all transactions until they catch what they want. If you operate outside of government the where is accountability? If the operators take whats yours and make it theirs, you have no legal re-course.

Even keeping items in a safe at home seems to be begging for it to be labeled as proceeds of crime and confiscated (hope that does not disclose where I live :)

Perhaps the only solution is to have someone who has a very high personal reputation to venture beyond the reach of governments. Of course dealing with someone like that could get you a very strong label. What is needed is a government one can trust.

Please let me know if you find one, I'd like to keep my gold there.

PS: e-dinar seems to be still up