Sunday, December 18, 2005

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


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