All great questions

See responses below...

> Understood. The merchant should be motivated to do something about that if
> they want to sell goods. The traditional solution in the international
> market is to abandon all the flapdoodle about regional currencies, and run
> all transactions in mega-currencies like dollars or Euros. Then let the
> MERCHANTS deal with the problem if they need local currencies to pay their
> bills, and let the CUSTOMERS deal with the problem with their local
> banks/exchangers is they only have dinars or sheckels in their own
> pockets.

I agree to a point, but until the merchants are motivated to do something about it, we'll continue to have a need for exchangers. I was suprised to find out there are actually cities and small town in our own country that choose to use their own private paper currency. Then there are people who will exchange that private currency for dollars when you need to deal with the rest of the world. I guess there will always be people who don't want everything dictated to them by a government - not even the money they use.

> Dollars or Euros get used for big transactions, and there are not a lot of
> unregulated street corner paper currency exchangers, except for the black
> market.

> This seems like an on-line version of a collection of unregulated black
> market currency exchangers. Trader beware.

> Perhaps it's not a scam, but it fails the test of reasonableness. Read on.

> 1) When you're trading for yourself, what are you making money on again?
> Temporary and small differences in the relative values of the various
> ecurrencies? That's like arbitrage. Not for the faint-hearted.

I'm making money by exchanging one ecurrency for another. If someone has a bunch of money in DXGold and needs eBullion to make a purchase, I can make that exchange for them (assuming I have eBullion to trade). I, of course, collect a small fee for doing so.

> 2) When you're investing your money into some big pool for GDT to draw on,
> this is the part that fails to make sense to me. If it was a real
> business, a safe, transparent and regulated business, it would attract
> large scale investors that would treat it like a business. Then there
> would be no need for "retail" (i.e.: small scale) personal
> investors to put their own money into it. Why do they need your money if
> it's a real trading exchange? Why bother with anybody with less than
> $10,000-$100,000 to invest? What benefit do they get from having a large
> pool of small investors to provide liquidiity to an exchange market,
> rather than a small pool of large investors?

I think it makes perfect sense. With so many ecurrencies out there now, and new ones popping up from time to time, why would one company try to have funds in every single ecurrency at all times? If they can draw on hundreds or thousands of individual investors and tap into their ecurrency accounts, they are able process many more and much larger transactions than their competition. With some exchangers, they might only deal with two or three ecurrencies, and they sometimes have limited funds which means you have to wait several days for an exchange to occur. As the DXGold merchant network grows and more and more people bring money to the table, they are able to make exchanges in a matter of hours (or sometime minutes). The system if very efficient and getting better all the time.

Believe me, there are more exchange requests on a daily basis than any one company could ever hope to service. Developing a merchant network is a wonderful model for solving this problem.

> It just doesn't pass my smell test of reasonableness, unless the small
> pool of large investors can't be attracted to the market because it's not
> a real business. If the large fish stay away, there might be many good
> reasons.

What do you consider a "large investor"? There are people who have $500,000 or more in DXGold...that seems like a large investor to me. Heck, $50,000 or $100,000 is a large investor if you ask me - and those are pretty common.

Dave