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Available January 2016

January 2016 Vol. 1 Issue 1

H E N E W D G X U I1

Digital Currency
Intelligence Authority
7175 Shelton Street,
Covent Garden
London, UK
Skype digitalcurrency
Digital Gold Magazine is
published 12 times a year
online. Some of the products
featured in this magazine
are not yet available to U.S.
residents. Please check local
laws before using any product
mentioned in this digital
No part of this publication may be
reproduced or transmitted in any
form without written permission
from DCIA Ltd. The information
contained herein are opinions of
sources and interviews. DCIA Ltd.
claims no reliability or accuracy to
any information contained within.
The Digital Gold Magazine is
published for reference purposes
only and is not materially
responsible for errors.

2 JANUARY 2016


Digital Gold Magazine - January 2016

Coeptis is Live in Beta

Coinify & DigixGlobal Announce Bitcoin Partnership

The Power to Issue Money by Jim Davidson

12 Silencing Bitcoin
17 A Sneak Peek at the New DigixGlobal User Interface
32 Bitgold: A Modern Revolution in Finance by Nick Marinoff
36 The Digix Asset Tokenization Process
45 New EU License for WebMoney Brings New Requirements
46 What Group Will Soon be Enjoying the Benefits of Digital Currency?


4 JANUARY 2016


Melbourne, Florida (December 26, 2015) CMO, Inc. (COEPTIS) has launched a beta of its Global Standard
System, which is an alternative global payment system utilizing next generation technologies mobilizing the
value of gold for electronic transfer of value on the Internet.
The System resolves shortcomings that plague online payments by providing substantial benefits to both
businesses and consumers while achieving high levels of consumer protection and privacy. The patent pending
System is secure, easily accessible, makes e commerce more available to customers not adequately served
by traditional payment systems and brings greater efficiency to payment settlement in an increasingly global
economy. The System currency (AUG) is 100% reserved by physical gold. Payment occurs on a centralized
settlement platform which is universally accessible to customers. Payments are very efficient, settle immediately,
and are final. The cost of a transaction is lower than alternatives. The system has strong controls for antimoney laundering and consumer protection; and meets or exceeds all federal, state, and international regulatory
COEPTIS is licensed or otherwise authorized to operate in U.S. states representing nearly two-thirds the U.S.
population and will be obtaining approvals in the remaining states as well as Canada and Europe before expanding
to a larger global market. The current beta launch is designed to manage the expected high early growth of the
System. Sign-up is currently by invitation only with priority to persons in states in which COEPTIS is currently
licensed. A request for an invitation can be made at Full launch of the System is expected
Bill Cunningham, CEO of COEPTIS, said We are very excited to bring this System to the market. Our team has
worked hard to ensure we bring great benefit to consumers and businesses while also providing the protections
required by these consumers and our regulatory authorities.
COEPTIS recognizes that global payments are too slow, uncertain, costly, and inefficient globally, and that there
is a growing concern with identity protection. COEPTIS was started in 2013 to build out intellectual property
to address these market concerns while also addressing public policy and regulatory concerns with payments.
COEPTIS is headquartered in Melbourne, FL.
For further information, contact:
855-673-7176 (701)

WebMoney Gets a EU
License and Expands its
Presence in The European
Financial Conduct Authority (FCA) has
licensed WebMoney Europe Ltd as an
emoney issuer in all European Union
countries. With more than 29 million
currency users, WebMoney is accepted
by more than 100 thousand online
stores around the world.

Request Gold Payment

Tool Has Officially
Launched on the BitGold

An announcement from BitGold December 31, 2015.

The Request Gold Payment tool is now live, allowing

users to earn gold onto the network by sending
payment requests for their time, labour, goods or

November 18, 2015

The global settlement system WebMoney Transfer
has entered into partnership with a new guarantor
licensed to issue e-money within the European
The FCA (Financial Conduct Authority) license
granted to WebMoney Europe Ltd with head offices
in Cambridge, United Kingdom has secured the
company`s status as an e-money issuer in all countries
within the European Economic Area. As a result,
the Euro purses within the system are acquiring the
status of e-money and are in full compliance with
the legislation of the European Union.
As a part of the expansion of its presence in Europe
in the recent months, WebMoney has significantly
increased the number of top-up points for Euro purses
as well as the number of online stores accepting
WebMoney. The WebMoney technical support team
is already providing support for Euro purses while
the services within the system are being adapted for
the European users.
Currently, the system is used by over 29 million
users worldwide, with around 10 thousand users
registering with the system daily. WebMoney is
accepted as a payment method by more than 100
thousand online stores globally.
6 JANUARY 2016

We believe that transferring value online should be

easy, instant, and secure. BitGold allows you to send
a payment request to other individuals, anywhere in
the world with or without a BitGold account, with
the resulting payment settled in gold to your private
vault account.
Someone working in Greece and parting with their
services can be earning gold in Canada, London,
Zurich or elsewhere.
Just log in to your BitGold Dashboard and select the
Request Payment tab to get started. It is as easy as
entering the contact name, email address or mobile
number and the amount you are requesting.
Once you have sent a Request for Payment, the
recipient will receive an email that will prompt them
to open their BitGold account, if they haven't already,
fund their account and complete the payment request.
Unfortunately, at this time, U.S. users will not be
able to send, receive, or request gold payments on the
platform. Additionally, gold received into the Dubai
vault may be restricted from some functionality.
Contact the company for more details.
Copyright 2015 BitGold Inc., 334 Adelaide St. W,
Toronto, ON M5V 1R4. All rights reserved.

Coinify and DigixGlobal

Announce Bitcoin
Partnership in Singapore
Coinify is the first bitcoin payment
processor to partner with an Ethereum
based company processing bitcoin
payments for crypto-assets on
October 26, 2015
Coinify and DigixGlobal Private Limited (Singapore
UEN: 201479386E) are proud to announce a formal
business partnership. All bitcoin payments going
through Digix will solely be processed through
This represents a significant initiative between
Ethereum and Bitcoin based companies demonstrating
how both blockchain ecosystems can work together.
The partnership between an Ethereum based company
and a Bitcoin based company is one of the industrys
first, signifying that both ecosystems can grow
together. Bitcoin users can now easily own Ethereum
digital assets apart from Ether.
Digix allows users to purchase assets like investment
grade gold bullion with bitcoin, thereafter facilitating
physical asset issuances on the blockchain. These
digital keys issued on the Ethereum blockchain will
have the same transactional utility of Bitcoin and can
also be made fungible into divisible digital tokens
called Digix Tokens representative of grams of
gold allocated 1:1.
Morten Bebe, Coinifys sales manager, believes that
this is a significant step in future collaboration with
other blockchains. Digixs unique and decentralized
approach in the creation of gold backed tokens will
help promote the crypto ecosystem.
We are very excited to be working with Coinify,
says Kai, the CEO / Co-Founder of Digix. We have
looked at other payment processors and found Coinify

to be the best in terms of service, reliability, and

willingness to innovate with young companies in
Now end users can easily purchase crypto assets on
Ethereum with bitcoin. Kai adds, We have always
been open to collaborations and100 thousand online
stores globally.
About Coinify:
Coinify ApS drives mainstream adoption of digital
currencies, such as Bitcoin, for merchants and
consumers. Merchants benefit from Coinifys
Payment Service (PSP), enabling free, instant
settlements in a fraud-free and chargeback-free
blockchain payment environment, while customers
get access to secure, one-click payments that reveal
no sensitive information. Coinify is backed by a
multi-million dollar capital injection from SEED
Capital (funded by the Danish government) and
Accelerace, and is the leading European digital
currency market player. For more information about
Coinify, visit their website at
About Digix:
Digix is an asset ownership certification and
tokeniization platform for physical assets. Users
who purchase or store gold bullion with Digixs
participating suppliers and custodial vaults will be
able to own digital assets on the blockchain and
create divisible gold tokens that have the same
transactional utility and functionality as bitcoin. For
more information please contact:
Coinify ApS
Herlev Hovedgade 15B, 1.
2730 Herlev, Greater Copenhagen, Denmark
+45 3693 4994
Marketing and PR - Lenka Hudakova
DigixGlobal Pte Ltd
10 Anson Road #05-17
International Plaza S079903, Singapore
Co-Founder & CEO - Kai Cheng Chng

8 JANUARY 2016

The Power to Issue Money




Who should have the power to issue money?

t seems likely that a great many people probably havent thought about this question, ever. After all, since
the beginning of recorded history, various types of governments, including republics, kings, priest-kings,
and dictatorships have issued money.

If you open up your wallet, you probably find some paper money in there issued by some government, or on
behalf of a central bank that is authorized by some government. Very likely, you also have some credit or debit
cards issued by banks or credit unions, but these are only corporate extensions of governments, so not really that
different. Some people have gift cards from various companies, but these are corporations, therefore creatures
of the state. Moreover, most gift cards are denominated in national currencies.
My own wallet has a couple of Ron Helwigs Shire silver and gold wire cards, too. These are laminated cards
which contain thin strips of silver in one case, and a length of thin gold wire in the other. In other words, they
are actual gold and silver visibly embedded in the clear plastic laminate of the card.
If you are fond of history, you may have heard of the tendency of Roman emperors to debase their gold and
silver coinage, and the tendency of the Byzantine emperors to stick with the good stuff. You may have heard
that Revolutionary France was beset with inflated paper money called the assignat by the national assembly and
the mandat by the Directorate the same Directorate that used guillotines in its search for peace and justice and
discovered only baskets of severed heads and rivers of blood.
You may know that one of Napoleons secrets to popularity was restoring gold and silver coins to circulation
and melting the printer plates used to make the paper money. You may be aware of the adventures of Marco
Polo with paper money in China under Kublai Khan. And you are probably aware of the creation in late 1913
of a Federal Reserve that gradually replaced gold and silver coins in the United States with book entry and paper
money along with coins made out of base metals like zinc.
If you arent fond of history, essentially nothing in the preceding two paragraphs means anything to you. Which

might be ok, if you werent living in interesting times.

As it turns out, Thucydides was correct in believing
that the future, if it does not mirror the past, at least
reflects it. And, of course, Santayana says that if you
wont learn the lessons of history, you may be doomed
to repeat them.
Given that there is currently a sovereign debt crisis
that has turned Greece into an economic wasteland,
plunged Chinas markets down, and which is spreading
to many other countries in the coming months and
years, and given that the money you have in your
wallet is only backed by the full faith and credit of the
United States, which has not exactly shown itself to be
credit-worthy or faithful, you may find yourself very
interested in the question: who should issue money?
Your Power
Now, if you believe, as I do that the only just form
of government is one that derives its powers from
the unanimous consent of the governed, you should
recognize who has the power to issue money. Since
governments are issuing money and since all the
powers that governments have must have been either
seized from the people or delegated to the government
with the consent of the people, it follows naturally
that the power to issue money comes originally from
the people. It is also my view that powers are not
collective in nature but, like rights, are individual in
character. In other words, you have the power to issue
Whether that comes as a surprise to you or not, it is
clear from simply looking around that not everyone is
issuing money. If each individual has the power to
issue money, why isnt everyone doing so?
It turns out that one of the key features of money is
acceptability. It matters a great deal less if you issue
money than it does if someone else accepts it. In order
to generate demand for its currency, your national
government accepts that currency for payment of
taxes. The fact that there are a great many taxes, not
only at the national level but also at state and local
levels, means that there are lots of places where the
national governments currency is accepted. Not only
is it accepted by tax authorities, it is also accepted
by merchants because they know they can use it to
pay their taxes. It is therefore accepted by those who
10 JANUARY 2016

supply merchants with products, so they can pay their

taxes, and so forth.
So, the problems of central bank policies, the
problems with the economy, the problems with many
government policies are, to put it simply, your fault.
You choose to use the national currency of your
country. You choose not to accept alternatives, even
though alternatives exist, and have existed in the case
of gold and silver coins for thousands of years. You
choose to engage in trade and commerce for fiat money,
which means that the problems of fiat money, the
problems of central planning, the difficulties you face
as a result of errors in what the Federal Reserve and
other monetary manipulators do, are your problems.
They are caused by your choices just as much as by
the choices of hundreds of millions of others in your
country and billions around the world. You have the
power to change this situation, directly, to your own
advantage. Does that seem harsh?
Taxation Is Theft
Many years ago, at the end of the last century, I met a
member of the Somena First Nation up in Canada. I
was attending the world congress of the International
Society for Individual Liberty at the time. Meaghan
Walker-Champion explained to me that she had
spoken to the elders of her community and they had
many long talks among themselves thinking about
what the Somena word for tax collector would be.
They concluded that the word in their language was
the same as the word for thief.
Writing at the end of World War Two, E.C. Riegel
reached the same conclusion. He noted that money
is extremely useful in trade and commerce, and that
the issue power properly belongs to those engaged in
free enterprise. Since governments are not engaged
in buying and selling, but only in stealing from others,
they are entirely inappropriate to the purpose of issuing
money. He makes these and many other excellent
arguments against state socialism in A New Approach
to Freedom. My friend Spencer MacCallum helped
organise E.C. Riegels papers. An authorized, free,
and complete version of A New Approach to Freedom
is available on the web here.
To be continued on page 37



SilentVault lets you spend and

receive bitcoin (and litecoin) off
the blockchain entirely, and move
your coins to and from regular
bitcoin addresses whenever you
want. Our wallets are multi-asset
and can hold any supported asset
types side-by-side.

SBC - What Is Silent Bitcoin?

Silent Bitcoin (or SBC) is a digital voucher currency 100% backed by bitcoins. This means that
1.0 SBC equals 1.0 BTC. When a user spends BTC to a wallet hash controlled by SilentVault,
they receive in exchange a voucher (a cryptographically signed XML object) for the same
amount in SBC. Thereafter the SBC voucher value circulates privately off-chain between
SilentVault wallets, until a holder redeems their SBC voucher for BTC. At that point the SBC
value is decirculated, and a BTC spend is made from SilentVaults reserve to the address hash
designated by the user who surrendered the voucher. (Which is probably, but doesnt have to
be, the users own.)
Using SBC
The Voucher-Safe network operates differently from the Bitcoin network, in several important

12 JANUARY 2016

A Voucher Publisher (or VP) signs

vouchers and clears voucher payments
to prevent double-spending. While each
VP is centralized, the protocol supports
multiple Publishers. This means that
payments clear in seconds, with no need to
wait for transaction confirmations. (Note
however that a BTC spend to purchase a
SBC voucher does require 6 confirmations
before the SBC voucher will be issued.)
Input vouchers are always destroyed
in every transaction, and replaced with
output vouchers bearing fresh unique
serial numbers. This means that unlike
with the blockchain, no public transaction
history exists, balances are private, and no
taint can attach to coins. (Taint violates
fungibility, a fundamental characteristic
of sound money.) This represents a vast
privacy improvement over regular BTC
spends, and a lesser improvement even
over coin laundry services.
A payee must pick up their voucher
payment, within the 1-7 days designated by
the payer. If the payee does not do so, the
payment expires and becomes recoverable
by the payer (indefinitely). This makes it
impossible to lose value by spending it to a
dead wallet.
Receipts are generated by the payee, not
by the Publisher. This prevents the clearing
VP from needing to record transaction
history, or knowing anything about the
private message context accompanying the
payment. The VP also never sees a user IP
In short, it is much faster, more convenient,
more private, and generally much safer to
exchange SBC value between SilentVault

wallets than to perform naked spends

between BTC wallets on the blockchain.
(Though naturally it is also more expensive,
privacy being worth something.)
Trading SBC
Exchanges in and out of SBC from/to BTC
are performed via the Exchanges tab in
the SilentVault wallet, by buying or selling
SBC vouchers, respectively. These sales and
repurchases are carried out with the exchange
itself meaning SilentVault is an agent for
the Issuer of SBC. SBC vouchers can also be
traded to other users, in exchange for vouchers
representing other asset types (e.g. USD or
EUR, silver or gold, etc.) Users can specify
the asset types they will accept, and offer
discounts or demand premiums. The SVX
(SilentVault Exchange) acts as a third-party
escrow agent, allowing all trades to be fully
anonymous and secure. You cannot know with
whom you are trading, and no KYC of any
kind is performable by SilentVault. You are
your wallet keys, period.
Fee Schedule
The fees currently charged by SilentVault are
as follows:
Purchase SBC with BTC: 0.0% (free),
minimum quantity 0.01 BTC
Redeem SBC for BTC: 0.0% (free),
minimum quantity 0.02 BTC
Make SBC voucher spend: 0.0015 BTC
Receive SBC voucher spend: 0.0006 BTC
(first one is 0.0002)
Escrow exchange: 1.0% of amount,
minimum quantity 0.02 BTC



lan Turbo VPN: This VPN service is bundled with VoIP and private audio/video
calling via SIP, plus unlimited bandwidth for surfing and streaming.
Our lan Turbo VPN service is a standard single-hop VPN, but with selectable exit proxies in
Panama, the USA, the UK, France, and onto the Tor network. As a subscriber, youll also get
an SIP extension that lets you place private audio and video calls to other users. Unlike with
Skype, these calls can be encrypted end-to-end to conceal their content in transit. And because
youre on our VPN, the call metadata is also protected. We also supply your own private Mumble
server as an inexpensive add-on. There are no bandwidth limitations with this package. Surf
and talk all you want!

lan Max Security VPN: This VPN service is bundled with email addresses and
aliases, 1 GB file storage, plus 25 GB of monthly bandwidth.
Our lan Max Security VPN service is a premiere multi-hop VPN, which lives up to its name.
Multi-hop means that traffic flows between multiple points along its route from the entry gateway
to the exit nodes, something like changing planes a couple of times during an extended trip.
Inside the network, internal routes are varied, traffic is mixed alongside that of other users,
and random delays get inserted to defeat traffic analysis. This technique, known as server
cascades, same features and benefits as provides many of the Tor. (Given that the Deep State
agencies in various countries are now running most of the Tor exit nodes, it might be even
better.) As a subscriber, youll also get private email addresses and email aliases, plus 1 GB
of very secure file storage. Because of its multi-hop architecture, this VPN is less suitable for
streaming applications, and bandwidth usage is limited to 25 GB per month. However, you can
also buy top-up packs to add more bandwidth.

Elegantly Convenient! No special hardware required.

Software-only solution.
Both individual and multi-user packages are available.
Simple to install and use.
Support for Windows, Linux, Mac, Android, and iOS.
14 JANUARY 2016

Were long-time industry professionals with over a

combined forty years in the IT industry. Were also
committed advocates of human liberty and personal
privacy. With all the global spy networks, hacks, and
data mining in the world today, internet privacy is
under attack as never before.
We agree with E. C. Riegel, who wrote:

To desire freedom is an instinct. To secure it requires intelligence. It must

be comprehended and self-asserted. To petition for it is to stultify oneself,
for a petitioner is a confessed subject and lacks the spirit of a freeman....
The first requisite of freedom is to accept responsibility for the lack of it.

What does Digix do?
We are a Smart Asset company
that allows anyone to securely send and receive ownerships of assets for eventual redemption
on the blockchain. The first asset listed is Gold, and other assets, such as diamonds will be
available in the near future.

What are Proof of Asset (PoA) Certificates?

Proof of Asset (PoA) Certificates prove the existence of gold through the entire chain of custody
from the supplier to the custodial vault. They are automatically created when a user purchases
and stores gold at our participating custodial vaults. It consists of 3 digital signatures from
3 independent entities: vendor, custodian, and auditor. Through this process, a PoA card is
issued representing your asset ownership on the blockchain. This PoA card can then be sent
and received by anyone on the Ethereum Blockchain for eventual redemption. PoA certificates
can also be sent to a Minter DAE to create DGX Gold tokens for fungibility.

What are Digix Gold Tokens?

Digix Gold tokens can only be created when a user sends in their PoA Certificates in exchange
for them on a 1:1 weight basis on the Digix Minter DAE. Each Digix Gold token represents 1g
of gold. For example, if a PoA Certificate represents the ownership of a 100g gold bar, it can
be sent to the Minter DAE in exchange for 100 DGX tokens which will be deposited in your
ethereum wallet.

How do I know if these tokens or PoA certificates are safe from fraud or duplication?
All tokens and PoA certificates are created on the Ethereum Blockchain, a public ledger where
information stored can never be manipulated or counterfeited. Our smart asset service can only
exist because of blockchain technology.

Where are the physical gold bars stored?

Physical gold is kept with a participating custodian. Each PoA Certificate will specify the name
and location of the custodian that holds the gold. The first participating custodian on the Digix
Gold platform is Malca-Amit which maintains a high security storage facility at the Singapore

Why Singapore?
DigixGlobal is incorporated in low crime and politically stable Singapore. Investment Precious
Metals are exempted from GST locally, so you are purchasing gold at the lowest premiums
available in the world.
There are also no permits required to import or export precious metals.
Singapore also has no jurisdictional relations with USA or Europe.
We will only release your personal information by order of the Court of Law in Singapore.
16 JANUARY 2016

A Sneak Peek at the New

DigixGlobal User Interface
It will be available to the public in January 2016 for multiple operating systems and mobile platforms.
This software will manage client transactions for PoA Digital Ownership Certificates, Digix Asset
Tokens, and Ether tokens.
DigixGlobal can create a digital asset certificate for any storable physical property. Future versions
of this software will include additional digital assets such as diamonds.
When the interface opens, users are presented with the main dashboard menu as shown below.
Access to all primary services and tools is available from this opening screen.



Vendor Information

Custodian Information

Auditor Information

To ensure quality and authenticity, participating gold vendors only sell LBMA approved gold
bars. Gold purchased from an LBMA certified refinery is globally known for its quality. These
bullion sources guarantee the authenticity and purity of every single gold bar used on the
Digix network. Buying gold from the marketplace is the first step in the process of generating
a PoA Digital Ownership Certificate.
18 JANUARY 2016


Shows gold bullion available for purchase as a digital gold certificate.



From this area a user can send Digix Gold Tokens or send Ether.

20 JANUARY 2016

The transaction hash for a completed certificate purchase is also available with just one click.

(see below Raw Transaction Data / Transaction Hash)

The Ethereum platform allows users to create

applications that run on a decentralized
peer-to-peer network of computers without
any central control and free from human
interruption or corruption. Vitalik Buterin
invented Ethereum in late 2013, it was
formally described by Dr. Gavin Wood in
2014, then developed as an open source
software project under the GNU Lesser
General Public License. It was officially
launched on July 30, 2015. The project is
maintained by the Ethereum core developer
team (ETHDEV) under the guidance of the
non-profit Ethereum Foundation, which had
raised 31,591 Bitcoins during their 2014

The Digix Aegis Vault is a smart contract enabled digital Ethereum wallet that features
several unique features that set it apart from other digital crypto wallets including multisignature control, air gapped cold storage, configurable daily withdrawal limits, and twofactor authentication, to name a few. It is designed in a way so that nobody, not even Digix,
its employees, its corporate officers, government authorities, or anyone else would be able
to spend or control its funds and assets. Individual users can create Digix Gold and Asset
tokens by giving ownership of a physical asset (PoATM Certificate) to the Minter DAE. It is a
way to represent gold bars as units of tokens on the Ethereum Blockchain database. One
Digix Gold token represents 1 gram of gold.
(Q) How do I know that there are actual gold bars backing PoA certificates or Digix Gold
All material documents from the Proof of Asset protocol are made available via Swarm Ethereums distributed file sharing. This would mean that all assaying certificates, custodial
receipts of deposits, and independent auditor documents from the entire chain of custody
will be uploaded for public viewing to ascertain the authenticity of all PoA certificates and
Digix Gold tokens. Each entity in the chain of custody will also digitally sign on our PoA
Certificate. We only deal with vendors, custodians and auditors that have passed our due
diligence, and that are world renowned with a history of excellence. Private audits are also
available for added assurance.


From this page, users may also view the assets history of trading within the Digix system.

22 JANUARY 2016

Copies of the orignal signed documents are included as

a part of the certificates registration in the blockchain.

PoA Digital
are Ethereum
smart contracts
that provides
a legally and
of ownership of
physical gold
or other assets
currently under
the guardianship
of a participating
custodian on the
Digix decentralized
platform. It
also certifies
the agreement
between the user,
the vendor, the
custodian, and
the independent
The PoA provides a complete history
of the chain of control from the vendor,
the custodian, and all audit reports. This
proof guarantees that the purchase of
the gold by the user, its storage by the
custodian, and regular inspection by the
auditor has taken place.
PoA Certificates can be transferred or
sent to any Ethereum account, sent to the
Minter DAE in exchange for Digix Asset or
Gold tokens, or redeemed from the Recast
DAE in exchange for Digix Asset or Gold


The Digix Minter DAE

recognizes all valid Digix
PoA Certificates and can
accept them from a user
in exchange for divisible
Digix Gold or Digix Asset
tokens. The rules of the
Digix platform dictates that
only the Digix Minter has
the authority, through the
request of the owner of a
Digix PoA certificate, to
allow that owner to issue
their own Digix Gold or Digix
Asset tokens in exchange for
the PoA Certificate.

24 JANUARY 2016

The interface conveniently walks customers through the online purchase of a Digital Gold PoA Certificate.


A completed purchase of the digital gold certificate representing this bar.

26 JANUARY 2016


The Digix Aegis Vault is a smart contract enabled digital Ethereum wallet that features
several unique features that set it apart from other digital crypto wallets including multisignature control, air gapped cold storage, configurable daily withdrawal limits, and twofactor authentication, to name a few. It is designed in a way so that nobody, not even Digix,
its employees, its corporate officers, government authorities, or anyone else would be able
to spend or control its funds and assets.


In addition, to its security

features, users can configure
the Aegis Vault to assign
beneficiaries, set the timebased distribution of funds
or assets, and delegate a
power of attorney to another
individual or a group of


28 JANUARY 2016

Digix is committed to
bringing Ethereum use to
the mainstream, and the
availability of a secure wallet
is essential for realizing this

(Q) What is the Digix

Recaster Smart Contract?
Digix Recaster Smart
Contract allows the
conversion of Digix Gold
tokens to a PoA card. The
PoA card can be sent or
received on the blockchain
representing an ownership
of an entire gold bar, or
be used for redemption of
the physical gold bar at
our office. For example, if
you have 100 DGX tokens
representing 100g of weight
in gold, you can exchange
for a PoA card representing
a 100g gold cast bar at
Digix. This PoA card can be
sent and received on the
Ethereum blockchain, or be
used to schedule a local
pick-up of the physical gold
bar at Digix redemption
center in Singapore.


You can currently recast

into PoA certificates of
100g (100 DGX) or 1000g
(1,000 DGX) gold cast bar



(Q) What about the Digix audit process?

We have four types of audits at Digix.
1. PRIVATE AUDITS: Clients are welcome to come to our certified custodial vaults in
Singapore to inspect your gold bars in a highly private and secure environment.
2. EXTERNAL AUDITS: We have engaged Inspectorate Singapore (
to audit our inventory and match them off with customers holdings at DGX. We will hold
such inspections at least twice a year.
3. CUSTODIAL AUDITS: Our certified custodians will provide a physical certification of proof
that your gold bars are stored safely in their vaults. They will take photographs of your
serialized bars per request basis and have them keyed into their inventory management
systems. Some of our certified custodians reputation are also on the line to provide us
with their appraisal and storage services, as they have to answer to their shareholders as
a publicly listed company in Singapore.
4. INTERNAL AUDITS: We have patented a certification process called Proof of Asset (PoA),
where auditors sign on the existence of Gold in our PoA certificate. The digital certificate
is then uploaded onto the Ethereum Blockchain.

(Q) Are there KYC/AML requirements?

All users who wish to redeem PoA certificates or Digix Gold Tokens for physical gold bars will
have to go through KYC requirements at the pickup. The gold bars will only be available for
pick up at our office location in Singapore. We must ensure that DigixGlobal and participating
organizations are protected from any potential liabilities resulting from government prosecution
and asset seizures, so we ensure that we comply fully with regulatory requirements for Know
your customer (KYC) and Anti-money laundering (AML).
30 JANUARY 2016

SilentVault is a secure private online wallet for making

untraceable p2p payments.
Unlike other crypto currency wallets SilentVault wallets support heterogeneous
asset types such as fiat dollars euros metals gold and silver and crypto coins
bitcoin litecoin. SilentVault provides anonymous off blockchain payments made
in bitcoin and litecoin. It also features an integrated p2p escrow exchange where
users can trade anonymously among different asset types with other users such as
exchanging bitcoins for silver.
The SilentVault Spark client is a fully functional Jabber chat client that is a branded
and updated version of Spark. Since Spark supports a plugin architecture our wallet
client is implemented as a plugin. You can obtain the SilentVault Spark client with
plugin from this page. You can also find the source code for both the plugin and
SilentVault's customizations to the Spark source base elsewhere on this site. A
tutorial on SVSpark is here.
The SilentVault wallet webstart client is a stand alone program that you can install
from within your browser. Like the SilentVault Spark client it communicates with the
Voucher Safe payment network using extensions to the XMPP protocol. This type
of communication makes economic transactions indistinguishable from ordinary
encrypted instant messaging traffic and avoids any need to run within an insecure
browser environment or rely on web domains. All client source code is published
on this site and while you can run a prefabricated client you are also invited to
build your own from source.
You are also invited to develop applications for our integrated marketplaces that
appear within SilentVault wallets. A full API is available for your use as a development
tool. Please contact our team for details.
The SilentVault technology is based on Voucher Safe which was developed 2008
2011. Voucher Safe is also the core technology of the Digital Cash Alliance.




I love go-o-o-o-ld!
-Austin Powers in Goldmember
Not surprisingly, most people feel the same.
According to the Wall Street Journal, gold prices and
safe-haven demand in Asia have been skyrocketing
since mid-November (1), proving that you dont have
to be a sea-faring pirate or a squire in a kings castle
to enjoy its natural glare, beauty, and above all, its
ability to stimulate wealth.
Since the days of the California Gold Rush, people
have enjoyed panning for it, selling it, and most of
32 JANUARY 2016

all, owning it. Long considered one of the planets

most precious and desired metals, gold has grown
heavily in value over the last several years, and it
appears more and more are trying to get their hands
on it every single day.
Something else is growing as well Bitcoin. Often
regarded as Americas most popular cryptocurrency,
Bitcoin has jumped heavily in value over the last few
months, spiking from $230 to nearly $350. Unlike
gold, which exists in solid, physical form, Bitcoin
exists in ones and zeros; binary coding that travels
through the blockchain, the technology that makes
Bitcoin transactions possible between users and
respective merchants.

Its interesting to witness nearly equal popularity

rising for two different things that ultimately serve
the same purpose and share similar goals. Both
are designed to enhance the world of finance. Both
can rise in value, and both have the ability to make
someone rich overnight So what if we could
combine the two? What significant differences could
there be if Bitcoin and gold were fused into one

2015 has been a big year for the company. CNBC

has stated that BitGold currently serves over
100,000 active customers, and the platform stores
approximately 276 kilograms of bullion within its
walls. Thats nearly $11 million total and over $100
per active user (6). In May, BitGold began trading on
the TSX Venture exchange in Canada and announced
the purchase of GoldMoney, worth nearly $52
million in Canadian dollars (7).

Well, its already been done. Say hello to BitGold,

an early startup company stationed in Toronto,
Canada. BitGold aims to offer international services
for people and businesses to send payments and
hold savings with physical gold (2). The company
was founded in 2014 by entrepreneurs Roy Sebag
and Josh Crumb. Both have a long history in the
financial sector, with Sebag previously serving as the
Founder and Managing Principal of Braavos Capital
(an international private investment organization),
and the Chairman of Natural Resource Holdings, an
investment company involved with natural resource
assets (3). Josh Crumb was previously the Senior
Metals Strategist at Goldman Sachs (4).

In June, the company made citizens of the United

States very happy with the following announcement:

The company alleges that gold bullion is the worlds

oldest asset class and the centurys best performing
currency (5). According to BitGolds website, their
mission is:
To make gold accessible and useful in digital
payments and secure savings Were advancing
the digital payments revolution by helping people
securely acquire, store, and now spend gold with
unprecedented simplicity. BitGold accounts are
free and can be opened in minutes. We provide users
with a secure vault account to purchase and hold
gold, the ability to make and receive instant gold
payments, and a prepaid card for spending gold
at traditional points of sale. Through our network
of ATMs, customers can fund their accounts with
local-currency (4).
Present investors backing BitGold include Dundee
Capital Markets, GMP Securities, and Sandstorm
Gold, although the initial investor in the company
was Soros Brothers Investment, which is presently
run by Alexander Soros, the son of Hungarian
business magnate George Soros (2).

US residents can sign up on the BitGold platform

and buy, sell or redeem gold using BitGolds Aurum
payment and settlement technology. US residents
will also have access to the BitGold mobile app and
a prepaid card when these features launch over the
coming weeks (7).
The platform offers a number of products and services
beneficial to any gold-lover across the country. As the
above quote suggests, BitGold offers whats known
as Aurum, the gold-settlement technology thats
compliant with several U.S. financial institutions
such as JP Morgan Chase, Wells Fargo, Citi, Bank of
America, US Bank, Fidelity, Capital One and Charles
Schwab. Users with an account at any one of these
nationally-recognized banks can instantly redeem
gold or authorize gold deposits. The transactions
thereby increase in safety and automation. Users
also receive a bonus in that they are usually able to
avoid bank wire fees through the process (7).
Using the BitGold app, users may also send and
receive gold as payments to and from any other
user or seller without paying any transaction fees.
They can even send gold to non-BitGold users
via their mobile phones or through a simple email
message. The company also issues prepaid debit
cards, allowing users to spend funds directly from
their BitGold accounts. The card is compatible with
ATMs so that users may withdraw local currency (7).
Lastly, the company issues special ten-gram gold
cubes, worth approximately $380 each at press
time. Users may redeem these cubes on the BitGold
platform and may demand physical delivery when
they see fit (7).

Vice-president of communications and PR Emily

Cornelius explained in an email that they have no
stereotypical user of the companys services, but
that there are predominantly three main use cases:
The traditional gold investor will gravitate to
BitGold because our gold is unprecedentedly
priced within 1% of spot price and we offer free
storage in a Brinks vault of their choice globally
The second use case is the user who seeks a more
stable currency for their national savings, outside
of their potentially volatile local fiat currency
Gold has gained over 3,000% vs. the US Dollar,
which is arguably the worlds strongest fiat money.
Gold may seem to go up, down or sideways but in
reality and when viewed over long timescales such
as the avg. human lifecycle it always rises
Gold has been rising against 9 of the worlds
most famous and well-known currencies almost
every year since 2000 Thirdly, BitGold is a
powerful payments platform BitGold allows a
user to send an invoice for your labor to someone
else anywhere in the world, which the recipient
can pay using any traditional payment method
This gold is vaulted anywhere, even outside their
jurisdiction This is important as it allows users
to achieve upward mobility that are otherwise
hindered by localized issues that are exogenous to
their personal journey.
Cornelius also explained that the company offers
all the benefits and efficiencies of a service like
PayPal and a MasterCard but with a universally
accepted, more stable store of value.
Presently, regulation over BitGold appears to be
fairly non-existent. BitGold does not list which
regulators hold jurisdiction over its staff and
operations, nor do they list regulatory information
regarding their trade practices (7). In fact, cofounder Roy Sebag has stated in the past that he
believes BitGold is not a bank, nor does it serve as
a financial institution in any traditional sense as it
does not engage in fractional-reserve banking (2).
According to page 20 of the companys initial
public filing, BitGold is not:
Eligible to be registered with the Financial

34 JANUARY 2016

Transactions and Reports Analysis Centre of

Canada There can be no assurance that BitGolds
services or Internet platform will be acceptable to
foreign regulatory bodies. Foreign governments
may seek to restrict access to BitGolds services,
block BitGolds website, or impose other
restrictions that may affect BitGolds ability to
offer service to new or existing users in those for
an extended period of time or indefinitely (8).
Despite this, it was confirmed in July of 2015 that the
company did offer its services under the Canadian
Bailment Law (9). This occurs in situations where
physical, personal property is transferred from one
person (the bailor) to another for safekeeping, and
doing so does not require the binding notion of a
written contract (10).
Presently, the company employs 26 people,
including Sebag and Crumb. Other notable BitGold
personnel include Chief Executive Officer Darrell
MacMullin, Chief Technology Officer Alessandro
Premoli, Lead Mobile Engineer Paul Mennega,
and Team Manager Karman Lee. The company
also employs several vice-presidents, five software
engineers and two compliance officers (4).
It can be said that BitGold has accomplished quite a
bit in less than two years. Its likely such a volatile
company has some big plans waiting in the wings
for 2016, but Emily Cornelius isnt dropping any
hints as to what they could be:
We have a number of new features, services, and
products coming Youll have to wait and see.
BitGold is steadily making its mark. It has the
backing, the funds, the technology, and above all,
the drive. Put all these items together (and add a
touch of flair and public desire), and its clear that
BitGold has what it takes to make the world of
finance its own.

Classes in Data Security &

Communications Privacy
One of the key elements of your individual sovereignty is your
ability to have private information and either keep it private or
communicate it privately to other people. In order to have effective
data security and communications privacy, you need to understand
a significant array of technologies. Fortunately, we have teachers
well versed in these matters who are available to help. In addition,
we are helping to organize a series of seminars throughout the year
2016 at different locations around the world so that our people can
help you make the most of these techniques.
Our comprehensive course is regularly $500 but for a limited time
(through 31 May 2016) readers of this magazine can purchase the
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The comprehensive course is intended to provide a detailed review
of information and communications security technologies that are
suited to your business operations or personal needs. It includes a review of the following areas:

E-mail encryption using Open PGP systems

Web mail encryption using Mailvelope and similar
Computer operating systems and open source choices
Encrypted root data storage
Deleting versus over-writing
Keeping encrypted back-ups
Computer software systems, proprietary and open source
Connectivity choices including VPN tunneling, multi-hop VPNs, TOR
Encrypted voice over IP
Encrypted text chat
Encrypted video conferencing
Crypto-currencies as payment methods and their limitations
Secure multi-currency digital wallet choices

We also offer customized courses that are designed to provide the best results for your particular business or
personal needs. We also offer individual courses in each one of the above areas of technology for only $49
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We have the ability to accept payment in various forms. Among the payment choices we currently like are
check, money order, cash, silver coins, gold coins, Bitcoin, and Silent Bitcoin. Please contact us for further
details or to arrange payment.
Individual Sovereign University Association
2040 West 31st Street Suite G169
Lawrence, KS 66046



Digix Gold and Asset tokens can be issued by individual users by giving ownership of a
physical asset (PoA Certificate) to the Minter DAE. One Digix Gold token represents a
1 gram share of a physical gold bar under the control of the Minter DAE.
There are 3 modular processes at Digix - Proof of Asset (PoA) Certification to create PoA Asset cards,
Minter DAE to create DGX tokens, Recaster DAE to convert DGX tokens back into PoA Asset cards.
Proof of Asset certification consists of:
1. The digital signatures from our chain of custody (Supplier / Custodian / Independent Auditor
2. Documentation and proof of receipts from each of these entities that are uploaded for
The above allows the creation of PoA Asset cards.
Each PoA asset card represents your ownership of Gold bars kept at our participating custodial
PoA Asset cards in themselves can be sent and received on the Ethereum Blockchain.
To make these assets fungible and divisible into DGX Gold tokens, you can move on to the next 2
autonomous services that we have created at Digix.
These 2 services would be the Minter and Recaster DAE. DAE stands for Decentralized Autonomous
Entities. They are open sourced smart contracts deployed on the Ethereum blockchain.
These smart contracts perform the autonomous role of accepting PoA Asset cards and converting them
into fungible / divisible DGX tokens.
For instance, if you send a PoA Asset card representing a 100g gold bar to the Minter DAE, it will
in return issue you with 100,000 DGX tokens (where each DGX tokens represents 0.001g of gold)
to your Ethereum Wallet. Each of these DGX tokens are backed by the amount of gold in the DGX
network pool, which is owned by the users of the smart contract / Minter DAE.
To convert DGX Tokens back into a PoA Asset card or gold bar for redemption, simply use the Recaster
DAE by sending the requisite amount of DGX tokens (on a weight basis) to the Recaster smart contract.
Due to AML laws, we will KYC individuals who wish to do any physical delivery of gold bars at this
36 JANUARY 2016

Continued from page 10

Copies of the book in hard cover were still available
from Spencers the Heather Foundation the last
I heard. I very strongly recommend this book to
anyone interested in the topic of money. Here is a
brief excerpt:
To desire freedom is an instinct. To secure it
requires intelligence. It must be comprehended and
selfasserted. To petition for it is to stultify oneself,
for a petitioner is a confessed subject and lacks the
spirit of a freeman. To rail and rant against tyranny
is to manifest inferiority, for there is no tyranny but
ignorance; to be conscious of ones powers is to lose
consciousness of tyranny. Self-government is not a
remote aim. It is an intimate and inescapable fact.
To govern oneself is a natural imperative, and all
tyranny is the miscarriage of self-government. The
first requisite of freedom is to accept responsibility
for the lack of it.
You see, Im not the only one being harsh. If you
feel you arent free, whose fault is that? Who is
responsible for your freedom? Im responsible for
my freedom. You should take responsibility for

should issue it, and what damage is done by having

governments issue money, you should read Hayeks
book. The paperback, used, from Amazons network
of resellers, might set you back $3 or more.
Here is a brief excerpt to give you some of the flavour:
The truth is indeed that legal tender is simply a
legal device to force people to accept in fulfilment
of a contract something they never intended when
they made the contract. It becomes thus, in certain
circumstances, a factor that intensifies the uncertainty
of dealings and consists, as Lord Farrer also remarked
in the same context, in substituting for the free
operation of voluntary contract, and a law which
simply enforces the performance of such contracts,
an artificial construction of contracts such as would
never occur to the parties unless forced upon them by
an arbitrary law.
Hayek is correct. Legal tender is a scam. But, so
is every other aspect of government imposed by
coercion. Without your explicit consent, government
is just bullying. Perhaps you should stop being
Hayek went on to write, in the same book:
It seems to me to be fairly certain that

If you dont like the Federal Reserve, why do you

keep using Federal Reserve notes? Are you afraid?
Do you hope that the powers that be have some of the
omnipotence they pretend is theirs? Or are you simply
unwilling to do anything to change your economic
situation because you risk losing something in the
transition? What if I told you that you risk losing
everything if you dont transition?
Denationalisation of Money Brings Freedom
Another author who wrote extensively on the topic
of money was FA Hayek. Hayek is widely known
as the Nobel Prize winner in economics in 1974 for
his pioneering work in the theory of money and
economic fluctuations. In my opinion, Hayeks
greatest contribution to economics was his 1976
(and subsequently revised through 1990) book
Denationalisation of Money - The Argument Refined:
An Analysis of the Theory and Practice of Concurrent
Again, if you really want to understand money, who

(a) a money generally expected to preserve its

purchasing power approximately constant would
be in continuous demand so long as the people
were free to use it;
(b) with such a continuing demand depending
on success in keeping the value of the currency
constant one could trust the [issuers] to make
every effort to achieve this better than would any
monopolist who runs no risk by depreciating his
(c) the issuing institution could achieve this result
by regulating the quantity of its issue; and
(d) such a regulation of the quantity of each
currency would constitute the best of all practicable
methods of regulating the quantity of media of
exchange for all possible purposes.
Issue Money
There is an old saying that when it becomes time
to steamboat, youll find many people building and

operating steamboats. The same seems to be true of

other inventions such as railroads. Until then, it may
be possible, but it wont gain widespread acceptance.
So, the fact that more than one group is now offering
the opportunity for competing currencies in the same
wallet seems to suggest that the era of competing
currencies has begin.

forth a web site and a system of payments involving

the Mark Twain bank in the USA and Deutsche Bank
in Germany. I remember visiting the Mark Twain
bank web site around 1995 and being impressed with
the availability of Digi-Cash for micro-payments.
However, it seems, only a few thousand customers
ever came forward.

Two particular new developments in this area are

from Kevin Wilkerson and Chris Odom. Wilkerson
is the mind behind the Voucher-Safe technology, and
has recently announced the Digital Cash Alliance to
promote private, anonymous, digital cash. Odom is
the mind behind Open Transactions and has recently
announced Stash Crypto. Both of these systems
allow for different companies, non-profits, and even
individuals to issue their own currencies.

The Mark Twain bank was purchased by another

banking company near the turn of the century. It may
be partly due to the fact that the purchasing bank was
involved in credit card payment processing, or it may
be the rather small number of customers involved,
but, for whatever reason, by 1999, Mark Twain bank
was no longer involved. Digi-Cash closed its doors
about that time.

At roughly the same time, there are dozens of new

crypto-currencies, a trend which was begun by Satoshi
Nakamoto with the Bitcoin white paper. Among the
many other similar currencies are Litecoin, Dogecoin,
Dash, MaidSafeCoin, Peercoin, and more than 600
others. The same technology built into Bitcoin, the
block chain is also being used for domain name
ownership, real estate ownership, and publication of
facts of various kinds.
Where does all this new currency activity come
from, and where is it going? Also, to the extent
that many of these new currencies represent
mathematical computation power, such as solving
hashing algorithms, to what extent are these cryptocurrencies better, or worse, than national currencies
issued by central banks or governments?
Origins in Cryptography
The origins of digital cash and digital currencies
go back to 1982. David Chaum, a cryptographer,
published a paper on anonymous communications
in 1981. A year later, he put together the ideas on
blind signatures which form the basis for digital
cash. His paper, Blind Signatures for Untraceable
Payments was accepted for publication at Advances
in Cryptology in 1982.
Chaum went even further, founding a company
in Amsterdam in 1990 to purse his digital cash
concepts. The company, Digi-Cash eventually put
38 JANUARY 2016

Another important development about this time was

the work of James Turk. Turk had been involved in
the mainstream banking sector, was very concerned
about some of the risks implied by a 1974 market
crash, and had a longstanding interest in the use of
gold as money. He received a bachelors degree
in international economics in 1969 and worked for
Chase bank for a time. He moved to the United
Arab Emirates in 1983 and worked as manager of the
commodity department of the Abu Dhabi investment
authority. He resigned from there in 1987 and about
the same time began writing for his Free Market
Gold and Money Report newsletter. By at least June
of 1995, and possibly earlier, Turk had applied for,
and received, a patent on the concept of a digital gold
currency. I found reference to the June 1995 date
on this site:
So, it is clear, to me, that within about a decade of
the invention of digital cash, and within about five
years of the first business creating digital cash (DigiCash, started by Chaum roughly 1990) an inveterate
gold bug had come along to figure out how to create
digital gold. However, it would be several more years
before the gold enthusiast, Jim Turk, established a
business to capitalize on his patented idea.
Digital Gold Currencies
There is a lot to say about the era of digital gold
currencies, and I have been involved in saying quite
a bit of it. You can find a 2004 industry report on my website, for example, which goes over my direct personal experiences meeting various people
involved in this industry. It also details the amounts of gold, silver, and other precious metals in storage, and,
where published, the numbers of accounts and volume of economic transactions taking place in the various
This phase of activity in the digital cash arena runs from 1996 to 2007. Doug Jackson founded
in 1996. Bernard von NotHaus founded the Liberty Dollar in 1998. Jim and Pam Fayed built
which went online in 2000. Zeno Dahinden created the e-dinar in 2000, which was initially a variation of e-gold
and worked directly with the e-gold site. GoldMoney was founded by James Turk and Clifford Press in 2001.
JP May started one more digital currency or 1MDC in 2001. Sidd Davis brought online in 2002.
There were several others, including a Phoenix Dollar made of silver, a Loom on which gold, coffee, and other
assets were traded, and a truly excellent Gold Global, all of which came a little later.
If you want to read the story of this industry, perhaps one day I might be encouraged to write it. Recently,
I learned from my friend Carl Mullan that he is writing a book about digital currencies, which, given his
involvement in digital gold, suggests quite a bit of the story is going to be available, soon. In any event, it is
a long story, though, and quite beyond the scope of this essay. My own involvement in digital gold began in
December 1998, and has not yet ended.

During that time, I met or corresponded with extensively, every single one of the founders of the various
companies mentioned two paragraphs ago, with the exception of Clifford Press. I met Doug Jackson and Pam


Fayed at a conference in Atlanta in April 2002. I met

Jim Turk at one of the conferences founded by the late
Jim Blanchard in New Orleans later that same year.
Over the years, I also went to events deliberately to
meet investors, merchants, and key players in the

user base, with gold in audited and secure long term


What happened? Well, the FBI decided to destroy

e-gold, in my opinion, and did so very thoroughly in
April 2007. Doug Jackson ended up being advised,
as I understand it, to plead guilty to a federal crime
involving money laundering, and, I think that was
pretty much the end of e-gold. It wrapped up within
a few years of this plea, with people who were willing
to claim the contents of their accounts going through
a process to identify their claim and have it fulfilled.
The death of e-gold in 2007 was also the death of
1MDC, as far as I can tell. By way of contrast,
Dahinden and associates chose to separate from
e-gold roughly July 2004 and became an independent
payment system.

It isnt clear whether the Pecunix story has ended,

or not. Rumors abound, and I have no clear
understanding of what, if anything, is going to happen
with Pecunix in the future. But, the end of e-gold in
2007 combined with the end of the Liberty Dollar
that same year, was definitely a setback to many of
the people involved in the digital gold industry.

The same agency decided to destroy the Liberty

Dollar in September 2007, in my opinion, and did
so. Bernard von NotHaus did not enter into any sort
of plea agreement, and was convicted in a court in
Statesville, North Carolina quite a few years later,
and, later still, eventually sentenced to some months
of house arrest, as I understand it. I have several
friends who have identified their claims to various
Liberty Dollar warehouse receipts, e-Liberty Dollars
digital warehouse receipts, silver rounds, copper
rounds, and so forth. Based on what Im told, they
have each been informed that their property was
improperly seized and is to be returned to them, and,
again, in each case, they have not received any of
their property.
The e-Bullion story came to a very dramatic close
when Jim Fayed hired a killer to murder his wife
Pam. Jim Fayed has since been convicted and was,
I believe, sentenced to death for the murder. Since
these events took place in California, which isnt
currently executing anyone, it seems likely that hell
spend the rest of his life in prison.
One good story that has not ended is c-gold, a system
based in Malaysia which is eerily similar to the old
e-gold site. The c-gold system has a fairly small
40 JANUARY 2016

As well, the GoldMoney story hasnt ended.

GoldMoney became a publicly traded stock not long
ago and was recently purchased (2015) by bitGold.

Blockchain Currencies
The next phase of activity began in 2008. Two
important projects got started that year. One of them,
Bitcoin, has since risen to a great deal of fame, some
really stunning currency valuations, and seems to be a
strong currency today. The other, Voucher-Safe, took
a bit longer to develop, and is just now stretching its
legs. Other important currencies and ideas in this
space include Litecoin and the Open Transactions
Earlier I mentioned the original white paper on
Bitcoin by Satoshi Nakamoto. Nobody seems to
be quite sure who this fellow Satoshi Nakamoto
actually is, but it is widely believed that the name is
a pseudonym. I gather from some people who have
analyzed the name that satoshi is a Japanese word for
wise or quick-witted. The word naka means inside.
The word moto means foundation or origin. So
perhaps the author is claiming to be clever, an insider
and original.
The white paper itself describes a process for
extending then-known cryptographic protocols to
create a digital currency software system. Very soon
after the white paper was published, a group of
software developers put together the original Bitcoin
Core protocol which is the basis of the entire Bitcoin
It took only a few years for the idea to catch on
and become, as we say about ideas on the Internet,
viral. By summer 2011, the price of a bitcoin had
grown from nearly nothing to about $25 each.


What is the Digital Cash Alliance?
The Digital Cash Alliance exists to move the world toward digital cash. Our alliance consists of individuals
and companies committed to a future which includes greater freedom for everyone. Cash has long been the
sine qua non of privacy, anonymity, and individual liberty. Places where cash may be used to make purchases
and where cash may be accepted to make sales tend to be places where people are more free to choose than
places where cash is forbidden. We believe that the global marketplaces online which seek to provide for
individual liberty, privacy, and anonymity would be greatly improved with digital cash. Accordingly, we seek
to promote, publicise, and encourage the use of digital cash. We hope youll join us.

How does DCSpark work?

Our XMPP client is both a robust Jabber chat client (based on Spark 2.7.1) and a secure p2p wallet client. The
wallet client is implemented as a Spark plugin. Other plugins provide OTR (off-the-record) for end-to-end
chat encryption, real time language translation, and a host of other features.
The XMPP servers operated by the DCA sit behind PageKite gateways, so that they do not need any publicfacing IP addresses. In addition to increased security, this means that while connected to our server, you
can only chat with other users of our client. Our server allows you to log in anonymously, or with a specific
username, for either 1-on-1 chats or in multi-user chatrooms. You can only access your wallet through our
private XMPP network.

Who is the Digital Cash Alliance?

Our founder is Kevin Wilkerson. He is a systems architect, software developer, and author. Other team
members include Tyrone Johnson and Justin Turrell. Our advisors are Paul Rosenberg, Jim Davidson, and
Bruno Delpeuch. Everyone on our team is committed to individual liberty and economic privacy.

How do I get digital cash?

Once you download and install the DCSpark wallet, you can move bitcoin or litecoin into your wallet within
about an hour (to allow for confirmations). Our multi-currency wallet also supports silver, gold, and tokenbacked currencies. We want you to issue your own money, or build an in-wallet merchant app, or start an
exchange agency, and bring your user community to work with ours.

Throughout the industry generally, and in this paper,

Bitcoin is capitalized when referring to the concept
or the currency itself. The use of lowercase bitcoin
refers to an individual unit of the currency or the
price of something measured in the currency.
At the start of 2013, it was about $13. Due to
excitement, market mania, and the use of bitcoin at
a large number of online retailers, the price spiked
to over $1,000 by the end of 2013. During 2014,
the price dropped very substantially, with many
mainstream reports that it would soon be of no value,
once again. However, those gloomy predictions have
not come to pass, and bitcoin is currently trading
above $290 as I write this paper in late October 2015.
Bitcoin today is involved in something considerably
in excess of $27 billion per year in economic
transactions. That fact makes the bitcoin economy
larger than the economies of about 80 nations,
including familiar places like Estonia, Afghanistan,
Haiti, Honduras, and Mongolia, to name a few.
Naturally with all things open source, there are a great
many variations on the theme. Bitcoin has inspired
about 635 similar crypto-currencies or currencies
as they might be envisioned by cryptography experts.
Perhaps the most important of these alternatives,
second only to Bitcoin in market capitalisation, is
Litecoin was developed as a variation of Bitcoin
differing primarily by having a decreased block
generation time, increased maximum number of
coins, different hashing algorithm and a slightly
modified graphical user interface. It was intended
that each litecoin be less valuable, since there would
be many more of them. Transaction timing was
intended to be much faster, and transaction fees have
prevented some types of high volume, low value
transaction attacks.
Competing Currency Wallets
Say what you please about Bitcoin, whether it is great
(and doing over $27 billion a year in transactions
suggests it is great to many people), or whether it is
awful (since it is based on nothing but mathematics,
not a tangible good like gold or silver). But it
isnt your currency. It is the invention of Satoshi
42 JANUARY 2016

Nakamoto, and it is maintained by the committee in

charge of the Bitcoin protocol.
Moreover, it has some serious privacy limitations.
Every transaction is made part of a permanent record,
a record which has grown in size and scope to include
something near 40 gigabytes of data.
You might not want your transactions to be recorded
on that blockchain. Then again, other forms of money
have their own limitations. Credit card money and
checking accounts are particularly compromised
with respect to your privacy, and they can be leveed
at any moment to make your funds accessible only to
the tax authorities. Little wonder, then that VoucherSafe wallets have provision for Bitcoin, and its major
competitor, Litecoin.
What Voucher-Safe provides for is the opportunity for
people to not only issue money but to transact with
others, using money of their own choice, in complete
The Voucher-Safe system creates and
destroys vouchers with every transaction and does so
in a fashion that cannot be monitored. It cant be
monitored because it isnt based on a central server
keeping accounts and recording each transaction that
occurs. You can keep track of transactions in your
own individual wallet, or delete records, or even
refuse to allow transaction records to be created.
Best of all, the system uses XMPP, the messaging
protocol that was designed for the Jabber chat system.
Users of Jabber know that it includes encrypted
messaging, called OTR or Off the Record. The
Voucher-Safe system doesnt use the web, except
for getting a copy of the open source wallet client to
your computer. So, you dont have to wonder about
the numerous security holes, gaping holes judging
by recent experiences, in the so-called secure web
sites you visit. Because XMPP is a protocol that is
designed to be extensible, applications can be added
to your Voucher-Safe wallet to make all kinds of
activities. I gather that a simple gambling game based
on coin flips has been demonstrated as a prototype.
Whats the Catch?
The catch, of course, is that it costs money. If you
want to begin issuing your own currency, there are
fees to pay. There are costs collected from wallet

users, transaction fees. In other words, it isnt free.

It is not so expensive that any company able to raise
a few hundred thousand dollars, or having profits in
that range, or any non-profit with similar finances, or
any new group of people choosing to work together
couldnt become currency issuers. And, of course, as
with all new technologies, it is logical to suppose that
over time, the price of being a currency issuer may
come down after all, electronic pocket calculators
in 1971 cost around hundreds of dollars and today are
just as effective for about $5.
But, you have free money from the government,
right? Youve seen what it costs you to use the dollar,
or the euro, in terms of a loss of freedom (ask the
Greek people how they like being part of the euro,
today), in terms of taxes, and in terms of the not-sohidden tax of inflation. If you dont want to pay for
issuing your own currency, you certainly dont need
to do so.
There are also opportunities, not only for people
who would like to issue their own currencies, but
also for those who wish to be agents, including
exchange service operators, people who wish to be
merchants, and people who simply like the idea of
freedom to choose. In fact, there is an entire network
being developed to promote digital cash in all of its
splendor. At various levels of participation, members
get access to a virtual privacy network that is among
the very best in the world. So, your web browsing,
e-mail, and all other online activities can take place
within an encrypted tunnel to secure servers. The
new group is called the Digital Cash Alliance.
You can reach them at which gives a
good overview of the alliance, its team members,
advisers, and plans. The link you want is to their
secure site at Note that they
use a self-signed security certificate, of course, for
all the numerous reasons that certificate authority
security certs are to be avoided, so your browser is
likely to warn you about the connection.

Why Me?
Why am I interested in digital cash? Quite simply
because things are not okay the way they are. If the
future I was taught to expect were here, I would have
a flying car and be taking frequent vacations beyond
the Moon. There would not be a giant militaryindustrial-financial complex gaming the people
for more debt-fueled wars, destroying privacy and
freedom, and enhancing the wealth of the richest
one-tenth of one percent. There would, rather, be
freedom. Look around you.
If you would seek reasons to have digital cash, look
about you. Look all over. You wont find freedom,
you wont find progress, you wont find prosperity,
you wont find peace, you wont find anything
resembling justice anywhere you look. If you want
those things, you are going to have to build them.
And if you want to build things so very radical as
freedom, progress, prosperity, peace, and justice,
youll need tools like digital cash. So, thats why me.
If you want the global economy to be owned and
operated by national governments, central banks, and
their cronies at enormous banks and multinational
corporations, you have no need of digital cash, except
perhaps for some marginal savings over the costs
involved in the wire transfer system. But if you want
meaningful change, if you are not willing to beg the
governments to change their policies, if you want the
Federal Reserve to cease to be relevant, if you dont
actually expect people in politics to do anything to
change a system that seems to serve them very well,
perhaps you should look into digital cash. I think
youll like what you find.

The Open Transactions system, which is used by

Monetas in commercial applications, also offers
a multi-currency wallet approach through Stash
Crypto. It seems likely that other competitors are
going to arise in this sector, as well.

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New EU License for WebMoney Brings New

Requirements for WME Purse Holders
Requirements for WME Purse owners (Natural Persons)
In accordance with the legislation of the European Union, the WME Guarantor has the following requirements
for WME Purse holders:
1. User Details and Age Restrictions
The WME purse holder must provide his/her name, surname, date of birth and full residential address (user
location) including country of residence.
The WME purse holder must be at least 18 years of age if he/she resides within the European Economic Area
(EEA), or at least 14 years old if he/she is residing outside the EEA and is of legal age in their country of
EEA countries include: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia,
Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein,
Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
Sweden and the UK.
2. Restricted Countries
Residents of the following countries are not permitted to use a WME purse: American Samoa,
Afghanistan, Algeria, Angola, Ecuador, Guam, Guyana, Indonesia, Iran, Iraq, Laos, Libya, Mali,
Mauritania, Myanmar, North Korea, Northern Mariana Islands, Panama, Papua New Guinea, Somalia,
Sudan, Syria, Yemen, Uganda and the USA.
3. Thresholds and Document Requirements
3.1. It is not required to submit identity documents if the total deposits during one calendar year to all WME
purses registered to one WM Passport do not exceed 2500 WME.
3.2. If the total deposits made to WME purses exceed 2500 WME during one calendar year, it is necessary to
submit the following documents:
- A valid national passport or other ID document.
- Proof of residential address, e.g. bank statement or utility bill, no older than 3 months. (mobile telephone
bills will not be accepted)
3.3. If the total deposits made to all WME purses belonging to one passport exceed 15000 WME during one
calendar year, it is necessary to submit a bank statement or other documents confirming the source of funds.
Scanned copies of the required documents should be uploaded to the WebMoney Passport website.
In case a WME purse holder does not satisfy the above requirements
and/or their identity document validity period has expired, his/her
WME user rights may be restricted (purses may be blocked) for both
incoming and outgoing transactions.
Date of requirement entry into force 15.07.2015
The total WME balance on purses belonging to the same passport at
the time of entry of the requirements into force will count towards the
incoming transactions total as per Section 3 of the above requirements.




y design, Internet digital currency

circulates online unable to be deposited
into a conventional bank. It is not
possible to stride down to the local Wells Fargo
and deposit a kilo Proof of Asset Digital Gold
Certificate or those extra Satoshis your spouse has
been saving on her smartphone.
The value represented by digital currency units,
often backed by gold, quietly moves around the
world outside of the conventional banks. These
private Internet payments serve the needs of many
people previously excluded from online business
because of their lack of access to expensive
highly regulated banks.
These digital currency users located in every
country on earth, are just beginning to understand
the great benefits derived from using transferable
digital assets. The ability to freely conduct an
instant, secure online transfer of value, such as
precious metal, outside of the century-old banking
cabal, leads us all to a place of greater financial
There are numerous benefits of using digital
currency over conventional banks and old
consumer products like credit cards.
As this more purposeful use of digital assets
expands throughout the world, the benefits to
individuals and the business world are easily
recognized and can also be conveniently
Each time a new digital payment system emerges,
a different group, and industry segment develops
around this new technology. In the late 1990s,
after the Russian bank collapse, WebMoney
Transfer digital currency rose to meet the
challenges of a new cash-based Russian economy.
Whether it was paying the local cellphone bill,
monthly cable TV charge, or simply transferring
funds online, WebMoney filled the gap in

46 JANUARY 2016

consumer financial services left behind by the

failed banks. In this early market, it was clearly
Russian consumers that benefited from this new
financial technology.
As todays blockchain grows and further expands
through new resources such as Ethereum,
many people are asking, Who will be the next
group to benefit clearly from digital assets and
these emerging methods of decentralized value
transfer? Everyone wants to know which group
will be next to use distributed digital assets
and penetrate new markets with global digital
currency expansion. Clearly, online gambling
and sportsbook services have vastly expanded
through the Internet. Adopting digital currency
has revolutionized online gambling.
Who is next? Will it be the merchants, bitcoinists
or the bankers?
In the early days of digital currency, many
brand new users invested funds in digital gold
currency strictly because it was a convenient and
inexpensive method of buying gold. Even in 2015,
digital gold is still a practical and economical
way to invest in precious metal. Owning digital
gold assets gives a user the ability to store value
in gold bullion without having to take delivery or
arrange storage. Its a highly effective solution
for the age-old question, Where do we keep our
During the late 1990s, as the convenience of
storing value in digital gold became more widely
available, merchants around the globe began to
realize the true efficiency of online transactions
using digital gold currency. New digital gold
currency transactions began moving effortlessly
across international borders at all times of the
day and night unrestricted by banking hours,
weekends or holidays.

Since both the sender and receiver exchange

digital gold units denominated by weight, there
is never an expensive currency conversion
interrupting the merchants cash flow. Digital gold
transactions clear instantly, and 100 percent of the
transfers value is available at that moment for
the merchants use. Since there is no credit card
fraud in digital currency transactions, there is also
no reason to hold back a merchant reserve fund to
cover fraudulent card transactions.
Merchants are clearly one of the largest
benefactors of new digital currency innovation.
A great example of digital currencys merchant
advantage can be illustrated by a successful Web
hosting company in Egypt. Because charging
interest and borrowing money are not a part of
the local business in this region, credit cards have
never been popular in Egypt or the Middle East.
This situation also includes those ubiquitous
western PayPal accounts.
However, owning gold and using gold as money,
is widely accepted and appreciated throughout
this region. Using gold in the Middle East region
dates back through centuries in the region.
Consequently, using new digital gold currency
technology was well accepted by the population
in Egypt. Products such as e-gold and e-dinar
became everyday tools of commerce. These new
Internet methods of payment took the place of
credit cards. Digital gold currency, in this case,
filled the gap left behind by unacceptable western
banking products. In fact, much of the business
accepted through this Egyptian Web hosting
company, a decade ago, was paid for using digital
gold currency.
Merchants around the world understand that their
ability to accept payments outside of conventional
banking institutions is a real gift. This group
especially appreciates the concept of no chargebacks. Both online and offline merchants can
greatly benefit from the adoption of digital
currency innovation.
As the digital currency market further develops,
will merchants be the next segment to take
advantage of these new digital currency benefits?

Or are the merchants waiting on consumers?

When credit cards first expanded in America
that wave of new technology was not powered
by the merchants desire to add a new method
of payment. Credit card expansion grew from
consumer demand. It is important to understand
what drives the adoption of new financial
Just as new demand for new credit card
technology was fueled by consumers use of
the plastic cards, it is most likely to be U.S.
consumers, not merchants, whose adoption
will signal the mass commercial use of digital
currency in America.
Yes, merchants greatly benefit from using digital
currency over conventional bank tools. However,
without consumer digital currency spending, the
fruit of this new technology may die on the vine.
How about all of the new Bitcoinists, will they
be the benefactor of this new digital currency
revolution? Will it be the millions of tech-savvy
enthusiastic cryptocurrency users from a younger
generation who cant get enough of those cool
Satoshis? Will it be the Bitcoinists to exploit
digital currencys new major advantages? Starting
with political donations and ending with the
corner bakery, Bitcoinists are focused on
expanding the use of digital currency. Bitcoin has
been a launching pad for ideas for this group of
From circumventing currency controls in places
like Greece, Argentina and Venezuela to opening
up commercial markets across the dark Web,
these users have leveraged digital currency and
brought financial access to every part of the
world. There is no debating it, the Bitcoinists
have led the growth of cryptocurrency and
benefited from the expansion.
What could be brewing for these innovative
bitcoin fans and is the U.S. financial world
headed for a bitcoin event horizon as so many
Bitcoinists believe?

The absolute least enthusiastic groups of potential
digital currency users are the banks and bankers.
Included in this list, are the money men and
those financial service professionals around the
world closely aligned with conventional banking
institutions. This group of licensed and regulated
individuals around the world move money
into and out of government regulated financial
products. This group holds the keys to the front
door and the back door of the banking industry. A
shift in attitude within this group could signal the
widespread adoption of digital currency not only
in America but around the globe.
Bankers and their powerful Associates are no
strangers to the limitations of international
financial markets. Each day, they wade neck
deep through U.S. regulations and pass on their
accumulated high fees to clients. From the list of
potential new users, it appears the group with the
most to gain from adopting digital currency are
the bankers and financial agents of the world.
What could power millions of financial service
professionals and bankers to change lanes and
adopt digital currency over conventional bank
Profit, Security and Consumer Demand
Banks and financial companies run on profits. The
structure of commercial banking operations is
arranged to generate profits. However, promoting
digital currency to financial professionals
as the future of money is an idea worth
forgetting. Furthermore, any attempt at touting
cryptocurrency as a new less expensive banking
product is also likely to be a complete failure.
Looking back to the fist ATM cards in America,
adoption was driven by consumer convenience.
At first, the new cards were considered risky and
expensive. However, the idea of accessing cash
from anywhere in the state or across the country
proved to be persuasive consumer argument, and
the cards eventually flourished.
Removing the risk or perceived risk from any
48 JANUARY 2016

digital asset should be step one. In the digital

gold market, Digix Global seems to have
conquered this task through the use of Proof of
Asset (PoA) Digital Ownership Certificates. By
creating legal ownership to physical gold bullion
and storing that ownership on the blockchain
using Ethereum Smart Contracts, Digix has
designed a convenient, secure, and insured way to
own gold bullion.
Todays financial professionals are driven
by high profits. Brokerage firms, banks, and
financial companies tell their employees to sell
products that make the most commission. If a
stockbroker, working through the branch office
of a commercial bank has the option to sell
customers either the in-house mutual fund paying
a high commission or an overseas mutual fund
earning the same rate of return but paying a tiny
commission, nine out of 10 times, the client
receives the higher commission in-house product.
Offering comparable higher commission digital
assets and transactions in place of older less
profitable bank products could begin to turn
the tide for digital currency across the financial
world. Because the new technology behind digital
assets is much less expensive than conventional
bank products, this task is considerably easier
than it sounds. Creating profitable digital currency
products for banks and financial companies
could fuel a move away from conventional bank
transactions and into digital currency.
This process should not be confused with the
idea of offering a simple fee comparison between
digital currency transactions and a credit card
or bank transfer fees. Pointing out to consumers
which financial transaction has the lowest fee is
not likely to change anything. Just ask e-golds
co-creator Douglas Jackson. In early 2000 he
placed an interactive credit card fee calculator
that helped visitors understand the annual savings
in e-gold transaction fees over credit card fees.
That was 15 years ago! Saving a few bucks to
give up the convenience of those little plastic

cards didnt work in 2000, and it wont work in

However, providing a higher commission to
financial agents for selling digital currency
instead of age-old bank products will almost
guarantee a larger digital currency market share.
Creating comparable digital asset products that
pay competitive sales commission dollars will
result in greater institutional participation.
Competing with the century-old network of
conventional banks requires padding the wallets
of financial representatives. Natural predators
always migrate to locations where there are good
supplies of food and no one ever conquered
Wall Street without paying the brokers. Digital
currency will not interrupt global banking
institutions without a profitable incentive for the
The costs of buying, selling and storing digital
assets is much cheaper and convenient than
anything offered by conventional banks. This
margin should create the extra commission sought
by brokers and bankers. It appears that digital
currencys entry point into the banking and
financial world is through agents wallets.
If a financial representative needs to purchase a
kilo of gold for a client and his London metals
desk offers him either a 0.4 commission on a
local gold buy (plus storage), or a 1.6 percent
commission on the purchase of a Proof of Asset
(PoA) Digital Ownership Certificate the
brokers choice becomes very clear. A kilo of
gold is the same as a kilo of digital gold, and the
broker would choose the higher commission.
As comparable digital currency products become
available, it appears that the bankers and
financial services have the most to gain from the
integration of digital assets and digital currency.
With a little incentive, it may be the bankers and
the money men that are the next group to take full
advantage of digital currencys expansion.

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