Digital Gold Industry Overview

Jim DavidsonFree Market Monetary Education Association

www.freemarketmoney.org

13 December 2006

13-Dec-06

The Digital Gold Economy

Ten years old Key Entrepreneurs High level participants Growing Sound Economics

13-Dec-06

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

13-Dec-06

Key Entrepreneurs

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

Bernard von NotHausFounded Liberty Dollar 1998. Monetary architect for a well-designed competitive currency. Twenty-five years mint master Royal Hawai’ian Mint. Author of The Liberty Dollar Solution.

13-Dec-06

Key Entrepreneurs

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

Simon “Sidd” DavisFounded Pecunix in 2001. Civil engineer, programmer, entrepreneur.

13-Dec-06

Key Entrepreneurs

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

JP MayFounded 1MDC in 2001. Multi-millionaire software entrepreneur, Interesting Software, Ltd. Developed BestGoldCard in 2005.

13-Dec-06

High Level Participants

Doug CaseyRecommended GoldMoney in his International Speculator newsletter. Bestselling author, entrepreneur, financial advisor.

Wes McCainTowneley Capital Management (est. $8 billion under management) is a director in GoldMoney

13-Dec-06

High Level Participants

Clifford PressChairman 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.

13-Dec-06

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

13-Dec-06

Market Share by Circulated Value

e-Bullion7%Pecunix

1%

e-gold25%

GoldMoney57%

Liberty Dollar10%

Note: Not all digital gold currencies report circulation.

13-Dec-06

Market Share by Users

Phoenix Dollar0.50% Loom

0.01%

1 MDC4.33%

Pecunix0.65%

e-Bullion19.48%

GoldMoney1.73%

Liberty Dollar13.80%

e-gold59.51%

Estimates based on various sources.

13-Dec-06

e-gold growth

Gold area is gold bars in circulation

Red line is fee income to e-gold from all account spend activity

13-Dec-06

e-gold statistics

Account value distribution histograms

Note: Largest gold accounts are likely 1MDC storage accounts, representing ~80,000 secondary users.

13-Dec-06

Industry growth - transactions

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2004 2006mil

lion

s o

f d

olla

rs

Source: indomitus.net/2004status.html

13-Dec-06

Industry growth - accounts

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2004 2006

thou

san

ds

of

acco

un

ts

Source: indomitus.net/2004status.html

13-Dec-06

Industry growth - online stores

0

10000

20000

30000

40000

50000

60000

70000

2004 2006

Source: indomitus.net/2004status.html

13-Dec-06

Industry growth - value stored

0

50

100

150

200

250

300

2004 2006

Source: indomitus.net/2004status.html

mil

lion

s o

f d

olla

rs

13-Dec-06

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

13-Dec-06

Limitations

Inconvenient to convert fiat to digital Inconvenient to convert digital to fiat

Liberty Gold Card overcomes both limitations

13-Dec-06

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