1mdc

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1MDC is a digital gold currency (DGC) that was founded in 2001. Similar to other DGCs, 1MDC allows for the instant electronic transfer of gold between user accounts. Unlike most DGCs though, 1MDC is backed by e-gold instead of physical gold. It is fairly unique in that it is a digital currency backed by another digital currency. Theoretically, it is fully backed by e-gold's real gold bullion. The web site is run by JP May with software designed by Interesting Software Ltd, an Anguilla company.

Features

As with any digital gold currency, one can use 1MDC to keep assets away from fiat currencies and avoid inflationary risks associated with them. To open an account, 1MDC only requires the user to have a functioning e-mail address, an e-gold account, a password, initials and a PIN. It is virtually anonymous. For the time being, no fee is incurred when a user makes transactions in the 1MDC system. Also, no gold storage fees are incurred when a user stores their digital gold in 1MDC. This is in sharp contrast to e-gold, which charge a fee of 1% per annum. 1MDC does, however, pass on e-gold's spend fees to their users when funding their 1MDC account (which is to be expected). Coupled with the quick and easy transfer of funds between e-gold and 1MDC accounts, 1MDC is attractive to persons with large amounts of e-gold, whose balances gradually shrink due to e-gold's storage fees. 1MDC also offers virtually fee free exchange from Pecunix gold to 1MDC, and a 5% fee to exchange from 1MDC to Pecunix gold.

Criticisms

1MDC's e-gold is held in unallocated (pooled) storage (presumably in one e-gold account) which allows for extra privacy from e-gold's administrators. However this increases storage risk, as the client has no precedence on the e-gold they've entrusted 1MDC to hold, and there is virtually no way for a user to ensure that 1MDC is maintaining full reserves of their e-gold. The amount of gold held and in circulation in the 1MDC system is unknown.

Also, since 1MDC is backed by e-gold, many things that could affect e-gold could affect 1MDC. If [e-gold Ltd.] ever became insolvent or was shut down for any reason, 1MDC would be insolvent by default. If e-gold's servers go offline, a 1MDC user can not transfer their gold back to their e-gold account, but they could still transfer gold between 1MDC accounts.

The fact that 1MDC passes on e-gold's spend fees when bailing in or unbailing e-gold into a user's 1MDC account is reasonable to most users, however, some are unpleasantly suprised when they find out since 1MDC makes no mention of the fees anywhere on their web site.

External links

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