Will Bitcoin Become the Next eGold?

First Published: 30th of April, 2021 by Patrick Carpen.

Egold was once the world’s most trusted and successful electronic currency, but it soon came to a crashing end. Will the soaring Bitcoin meet the same fate? Let’s examine the pros and cons.

“Egold,” “eGold,” or “E-Gold,” I’m not sure if I spelt that right. What is meant was “electronic gold” – a form of digital currency that had its peak around the year 2006 before it came to a crashing end in 2008. For the millions of consumers around the world who invested and lost in the once blooming digital currency, there is nothing “golden” about the failed digital currency ‘egold’ which was popular around the year 2006, an the title of this article certainly isn’t a tribute to egold.

Egold was established in the year 1996 by two American entrepreneurs. That was 2 years before Paypal. Initially, egold enjoyed a much greater success than Paypal did. It far surpassed Paypal on spend volumes, daily trades, and number of users. At its peak in 2006, egold was even accepted by many banking institutions and even used by government organizations.

Egold, however, had an Achilles heel. It enabled money laundering, pyramid schemes, and a wide range of other criminal activities because of its inability to screen and monitor transactions. It became the currency of choice for most criminals.

In 2008, a lawsuit brought against the currency saw the founders facing up to 20 years in prison. However, a plea bargain was entered into that only resulted in community services. Egold was ultimately shut down and millions of people lost money that they had invested into it.

Bitcoin is now a similar soaring, decentralized digital currencies that now face the same vulnerabilities as egold. Some experts believe that Bitcoin, like egold, will come crashing down for the same reason, but many others argue that it won’t for a number of reasons. First of all, Bitcoin is not owned by any individual or company. It is decentralized. Further, instead of shutting it down, authorities can put systems in place to curb and deter criminal abilities.

Government authorities have warned that investors of Bitcoin are at risk of losing it all. But many famous names, such as Elon Musk, have cast caution to the wind in purchasing billions of dollars worth of Bitcoin. Will Bitcoin, and all its investors, meet a similar fate as egold did? Only time will tell.