Dear Friends, James A. Donald points out that tens of thousands of micropayments are being made on the e-gold system every day. If we assert that less than a tenth of a gram of gold is a micropayment, then the web page http://www.e-gold.com/stats.html gives us some information. Spend size quantity value involved 0 mg - 1 mg 6959 (Total: 5.60 g) 1 mg - 10 mg 4854 (Total: 23.73 g) 10 mg - 100 mg 21825 (Total: 1.04 kg) A question arises, where do these events come from? Mr. Donald offers the thought that the spends involve the e-gold incentive program, but thinks some other activities such as per-click micropayments for banner ads might be involved. He writes, "Some proportion of these payments must be e-gold's own referral scheme." JP May offers the thought that the HYIP or "neoteric gaming" or, in my view, Ponzi scheme activity may be the major factor. Let's talk a bit about those events. Every time a spend takes place at e-gold.com, there are several activities which report through. First, an account holder authorizes a spend of metal (we'll stick with gold in this example) from his account to another account. Second, e-gold.com records a "payment receive fee" against the account of the person receiving the payment in the amount of 1% of the amount spent, capped at 50 cents. Third, e-gold.com captures half of this receive fee and divides the other half between two other accounts: the account which sponsored the spender and the account which sponsored the receiver. However, I don't believe that payment receive fees, spender-sponsor incentive fees, or receiver-sponsor incentive fees can be involved in *any* of these micropayments. Why not? If that were true, then every user initiated spend event would generate two or three automatic spend events on the e-gold system. A user-initiated spend would generate two auto-spends in the form of incentive fees to the sponsors of the spender and the receiver. It would generate those two plus a payment receive fee spend to the e-gold account. However, that would only represent the situation if the number of e-gold spends were always evenly divisible by three or four. Since the number of spends I see right now is 72470, and that number isn't evenly divisible by three nor by four, I think the incentive program cannot be involved in the "spends" figure. Help me out here, Jay Wherley or Jim Ray, if you would, since you guys at e-gold know the whole story. I think "spends" is user-initiated events, and that *none* of the incentive payments are counted as spends. That makes sense, since if the incentive payments were "spends" on the e-gold system, they would incur payment receive fees, and generate further incentive fees, in a rather recursive fashion - an infinite loop. What's more, they would show up in "payments received" in the account history, whereas they show up only in the "incentive fees" history. And, the number of spends, if incentive fees are counted, would have to be invariably a number evenly divisible by three, which is not the case in the instance cited here. So, it is just a total non-starter. The e-gold incentive program is not a part of the "spends" figure on the stats.html page at e-gold.com. Next we have to ask whether micropayments arise as a part of the Ponzi activities. That may be true, since we can suppose that Ponzi operators would want to provide incentive payments to these jerks who violate the e-gold user agreement and keep sending spam around. If there were not incentive fees paid to spammers, there would be no reason for the spammers to spam, QED. Thus, I suppose that if a Ponzi scheme takes in, say, $25, it pays out to the referrer some fee like $1 or twenty-five cents. I'd have to be a lot more interested in Ponzis to do the research on this matter. Based on the fact that spams which promote Ponzis are sent out, even though the account holder risks losing his account if the spam is reported to abuse@e-gold.com (see the account user agreement), then there must be some sort of incentive payment involved. As the spams are a form of advertising, and as there are probably opt-in lists for Ponzis and web sites describing various Ponzis, I do agree with Mr. Donald that "these are mostly ... payments for ads" though I suspect they are on a commission-only basis rather than on a per-click-through basis in most instances. Finally, we have the question of "anonymity." Mr. Donald says, "These are non anonymous, in that e-gold can link payer to payee, but anonymous in that it laborious to link e-gold account numbers to true names." I agree with the first half of this comma splice sentence. These payments are not anonymous. The payer knows whose account is being paid, and the payee knows where the payment came from. Since the e-gold.com system records an account history, and since those records are kept in one of the most litigious jurisdictions on Earth (the USA), any prosecutor or defense attorney or other party equipped with a court order can get account histories. There is no privacy to the system, certainly not in comparison to a wholly offshore-hosted system like GoldMoney.com or 1MDC. However, there is the e-gold.com registration process, which allows anyone with a working e-mail address to get set up with an e-gold account. Thus, accounts may be pseudonymous, or opened with a pseudonym. They might even be opened with fake IDs or the like, depending on what sort of due diligence gets imposed by e-gold.com. Nevertheless, pseudonyms can be penetrated. Not easily, as Mr. Donald points out, but with some effort, I think. That's especially true where some exchange provider converts one of the e-gold account holder's gold to some other form of funds. The payment to the exchanger is in the e-gold account history. Most exchangers have web sites where there locations can be found, and all can be located by anyone offering to buy gold from an exchanger because some coordinates for a wire or a money order are going to be forthcoming. Then it is only a matter of a court order to get that exchanger's record of where the payment was sent. Even if that is only an intermediary account, further record searches can be undertaken to track the pseudonym back to some individual. Of course, if the account holder uses an exchanger in a different jurisdiction, or runs several accounts in series so that there is an e-gold > exchanger > bank > e-gold > exchanger > bank series before the recipient gets his funds, the problem can be made more difficult, especially if the exchangers and banks in the series are in different countries. Finally, I suspect that a large percentage, perhaps 20% of all spends involve an exchange provider. Given that the total inventory of e-gold turns over in less than a week, I think a lot of account holders are replenishing their accounts with gold from exchangers. Some exchangers may be paying incentive fees, too. Regards, Jim http://www.ezez.com/