An Introduction to Digital Gold

An Introduction to Digital Gold: an excerpt

By Jim Davidson

“The coin is a delicate meter of civil, social, and moral changes…It is the finest barometer of social storms, and announces revolutions.”
- Ralph Waldo Emerson, 1860, “Essay on Wealth”

My own personal introduction to digital gold currencies came in December 1998. Having been frustrated for many years by various government interventions in the space business, three times to the detriment of companies I worked for or founded, and many other times to the detriment of good friends, I had concluded that I needed a free country in which to work. My efforts to identify one with adequate safeguards for liberty and private property had been unsuccessful. And the effort I joined in 1993 to build a new country out of whole cloth, as it were, on artificial platforms in the Atlantic Ocean, was also unsuccessful.

Meanwhile, an erstwhile friend, Wes Burnett, invited me to serve as a delegate to the 1997 Texas convention on reform of the state’s constitution. I concluded that my time then was better spent on other activities, which left me available when the delegates to the constitutional convention wanted to hire a team to organise the ratification effort in December 1998. I agreed to undertake the work, along with my good friend Sam Smith. We formed the initial core of the Texas constitution ratification committee (TCRC).

The constitution we were working to ratify was Texas Constitution 2000. You can google for it if you like. It was a very libertarian constitution in a great many ways, and I liked it much. In 1999, we were successful in organising one county ratification convention, which was successful – the delegates in that county voted unanimously to approve the new constitution. We were about to move on to its neighbor, where several dozen enthusiasts were eager to proceed, when Sam and I were told we had been fired by Don Henson and Wes Burnett in their capacity as the Texas constitution ratification fund (TCRF). In the time since, to my knowledge, no other counties in Texas have been asked to ratify the new constitution.

Although Don and Wes have never made good on the promissory notes for many ounces of gold they were supposed to pay to Sam, the other members of the TCRC, and me, I did get a bit of e-gold for my troubles. Over the months of our contract, we received promissory notes to pay us gold. Our expenses, however, were promptly reimbursed in e-gold. So it was in December 1998 that I formed my first e-gold account.

The first of the digital gold currencies was e-gold. It had been founded in 1996. By the time I formed my account there were still fewer than 1500 accounts. At the time, the terms of service allowed me to cash out some of my gold in gold coins. The “redeem” button in those days was like a visit to an online coin store.

There were also many other users of e-gold. Coin stores. Exchange providers. Tourism companies. Web hosting companies. Proxy services to let me buy from Amazon. Domain registrars. A great many art stores. Eventually, a few casinos began accepting e-gold, as did an online stock exchange.

After the September 1999 ratification convention in Sabine County, I received very little e-gold. But I was pleased to make a few minor suggestions, especially to the fusion codicil, when the e-gold terms of service were revised. And I had some breadth of experience with the currency in 2000 when a friend, Tristan Petersen, asked me to help him organise a new company, Gold Barter Holdings. Gold Barter was going to compete head to head with eBay, especially for the types of auctions forbidden on eBay. Gold would be the preferred currency for settlement.

Of course, I took some time away from that new business in December 2000 to travel to Europe and Somalia, and ring in the new millennium in Africa. My search for a free country had caused me to join forces with Dutch diplomat and polyglot Michael van Notten. In early 2001 we began raising substantial funds for a free port and toll road project. It was very close to the point of fruition in August 2001 – I was to meet Michael in Rotterdam in late September to arrange for the shipping of our first loads of equipment. We were to receive funds from our primary investor on the 15th of that fateful month. But, alas, events intervened, buildings fell in New York, and within weeks NATO general Tommy declared that it should be NATO policy to bomb all the port facilities in Somalia.

Oh, well. I didn’t get along well with the vice president in Somaliland, anyway. So, we put that effort on the shelf for a while. I did introduce our plans to Doug Casey in May 2002, to see if he wanted to help us get going in a big way. Doug was favorably impressed, at least with the detailed nature of our planning documents. Sadly, Michael passed away in June of that year from complications arising from being afflicted with socialised medicine. With him went the family connection to the clan where we anticipated building the port.

In the mean time, I had poured myself into Gold Barter Holdings full time. Some opportunities that Tristan had identified inspired him to develop Cambist.net, an automated gold exchange that worked initially with e-gold and early competitor GoldMoney (starting in 2001). We had also encountered some customers for e-gold to dollars activity, and that led to a full service exchange.

Business was flourishing. The industry was expanding rapidly. We successfully listed our stock on the online stock exchange. The sky was the limit.