Saturday, July 10, 2010

An Overview of Pecunix

The July 2010 issue of DGC Magazine has an enticing overview of the Pecunix digital currency system which covers its history, jurisdiction, and governance. Organized and existing under the laws of the Republic of Panama, Pecunix is rapidly becoming one of the trusted, established players in the field of digital currencies and financial privacy.

Pecunix, Part 1

Pecunix, Part 2

From the article:
"When e-gold Ltd. began operating, the concept was to create a closed digital system backed by the value of gold. (even the accounts are denominated in grams and ozs.) The operator of the system would not risk dealing directly with any retail customer and thus not engage in any risky financial transactions with unknown parties.
Consequently, the e-gold operation did not accept any direct customer funds. Retail transactions all flowed through a network of third party independent exchange agents. This set up became a sort of ‘defacto’ DGC model for a number of years. Pecunix still operates today as e-gold did in it’s early years.

Similar to the Federal Reserve which creates the currency but only deals with other banks, this DGC model manages the digital gold currency system but never deals directly with any retail customers. Just as you can’t ‘drive through’ the Federal Reserve Bank and cash your weekly paycheck, you could never send a wire transfer or payment directly to e-gold or Pecunix.

Using this original DGC model, no customer information is ever requested or verified when opening & operating a Pecunix account. The checking of ID, the verification of a customer’s real identity and requesting a source of funds on any transaction... these are all non-existent requirements within the Pecunix system just as they were for e-gold during it’s boom years.

Identical to the original e-gold model, the Pecunix operator is simply responsible for the day to day technical aspects of the online payments and the maintaining of the assets backing the digital units. Since they don’t deal directly with any retail customers the concept is that they should not be required to ‘know’ any of them or ask ‘what’ they do with their funds. This is the basic idea of privacy and freedom that digital gold currency pioneered across the Internet. Physical cash like notes and coins have certain anonymous properties and digital currency systems, in particular, digital gold currency was created to mimic those properties.

The Pecunix digital gold currency system continues to operate today exactly as it did from day one back in 2002. However, because of it’s jurisdiction and certain issues with the Federal Government, e-gold has modified it’s model to include strict verification of all account holders similar to PayPal."

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