Monday, December 19, 2005

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