Digital Gold Industry Overview

1
Digital Gold Industry Overview

• Jim Davidson
• Free Market Monetary Education Association
• www.freemarketmoney.org
• 13 December 2006

2
The Digital Gold Economy

• Ten years old
• Key Entrepreneurs
• High level participants
• Growing
• Sound Economics

3
History of the Digital Gold Industry

• Founded 1996 by Doug Jackson of e-gold
• Liberty Dollar founded in 1998 by Bernard von
  NotHaus
• In 2001 GoldMoney founded by James Turk
  e-Bullion founded by Jim Pamela Fayed 1MDC
  founded by JP May Pecunix founded by Sidd
  Davis
• In 2005 Loom founded by Patrick Chkoreff
  Phoenix Dollar founded by Gordon Hayes

4
Key Entrepreneurs

• Doug Jackson
• Co-founded e-gold 1996 with Barry Downey.
  Melbourne, Florida. Seeks freedom from default
  risk, finality of settlement, international reach.

Bernard von NotHaus Founded Liberty Dollar 1998.
Monetary architect for a well-designed
competitive currency. Twenty-five years mint
master Royal Hawaiian Mint. Author of The
Liberty Dollar Solution.
5
Key Entrepreneurs

• James Turk
• Founded GoldMoney in 2001. Concerned about
  failure of Herstatt bank in June 1974. Developed
  digital gold solution. Author of Coming Collapse.

Simon Sidd Davis Founded Pecunix in 2001.
Civil engineer, programmer, entrepreneur.
6
Key Entrepreneurs

• Jim Fayed
• Co-founded e-Bullion in 2001 with wife Pamela
  Fayed. Cousin to Dodi al-Fayed. Goldfinger Coin
  and Bullion coin shop owner.

JP May Founded 1MDC in 2001. Multi-millionaire
software entrepreneur, Interesting Software, Ltd.
Developed BestGoldCard in 2005.
7
High Level Participants

• Doug Casey
• Recommended GoldMoney in his International
  Speculator newsletter. Bestselling author,
  entrepreneur, financial advisor.

Wes McCain Towneley Capital Management (est. 8
billion under management) is a director in
GoldMoney
8
High Level Participants

• Clifford Press
• Chairman of GoldMoney. Co-founded Hyde Park
  Holdings in 1986 with Laurence Levy. Hyde Park
  owns High Voltage, an industrial holding company
  with annual revenues of 500 million, and other
  companies.

DRD Gold, Ltd. Shareholder in GoldMoney. This
111-year old gold mining company has annual
revenues of 250 million.
IAMGold Corp. Shareholder in GoldMoney. Mid-tier
gold mining company.
9
Size

• 293 million in gold, silver, and other metals
  are stored to provide redemption for digital gold
  currencies in circulation
• Four and a half million accounts across eight
  major currency services
• About 50,000 active web stores offering products
  and services in exchange for gold
• About 10 billion in economic transactions in
  2006

10
Market Share by Circulated Value
Note Not all digital gold currencies report
circulation.
11
Market Share by Users
Estimates based on various sources.
12
e-gold growth
Gold area is gold bars in circulation
Red line is fee income to e-gold from all account
spend activity
13
e-gold statistics
Account value distribution histograms Note
Largest gold accounts are likely 1MDC storage
accounts, representing 80,000 secondary users.
14
Industry growth - transactions
millions of dollars
2006
2004
Source indomitus.net/2004status.html
15
Industry growth - accounts
thousands of accounts
2006
2004
Source indomitus.net/2004status.html
16
Industry growth - online stores
2006
2004
Source indomitus.net/2004status.html
17
Industry growth - value stored
millions of dollars
2006
2004
Source indomitus.net/2004status.html
18
Why are users choosing it?

• Online convenience
• Reduces currency exchange risk
• Concerns about inflation
• trade deficits
• fiscal deficits
• war
• Good store of value
• Financial privacy

19
Limitations

• Inconvenient to convert fiat to digital
• Inconvenient to convert digital to fiat
• Liberty Gold Card overcomes both limitations

20
Conclusions

• Industry is large and growing
• Product life cycle has completed innovators and
  early adopters, starting on mainstream
• Liberty Gold Card is well positioned to attract
  fifty thousand to one hundred thousand users