Last time I checked, payment startups are not off-topic here at HN. Heck, YC has invested in at least two payment-related startups. So having an interesting article that shows you that laws can sometimes be a bigger barrier than imagined when dealing with online payments, is "reddit material" how exactly?!
The biggest problem that struck me was the reference to "The Man", reflective of the kind of paranoia that you find in the darker corners of the internet.
Aside from that, the article can't really be blamed for the ensuing gold-standard debate.
Pardon me, but STFU. If you want to criticize, more than one sentence is required to convey your meaning.
This story is very relevant in that it warns what happens if you carelessly try to innovate in a regulated field. As far as I know, it is far between every Web company that suffers this fate. The banking industry scores in the world class for lameness, and now we know why. On another note, this could happen in other areas as well..aviation is my own favorite oh-please-someone-get-your-act-together business. This could just as easily have happened if someone made a perfectly good airplane that insulted the wrong officials.
I am aware that the subject of gold-backed vs. fiat currencies is a regular theme on reddit, but this article doesn't even touch the matter.
"Be civil. Don't say things you wouldn't say in a face to face conversation."
In terms of "be wary of regulations"... well... yeah. But do you think anyone would vote for an article about me trying to serve alcohol to 20 year olds in the US? Following the laws should be one of those things that people basically take for granted. Whether those laws are sensible ones is most likely best left to other forums, with, perhaps, the exception of very pertinent things, like software patents.
e-gold broke laws that were not in place when they started. PayPal was accused of pretty much the same things and managed to negotiate their way to compliance. e-gold had pretty much attempted to do that since they first attracted attention.
They like many other startups also went under the misconception that if you structure things outside the US, you're safe (you're not). US businesses like google are facing similar situations in the EU regarding data privacy rules.
How exactly does the US enforce its laws in countries (or on businesses) that exist outside the US? It sounded like e-gold didn't just have some paper corporation, but an entire, multi-national structure of protection.
There is a realm of things that are 'interesting' but 'very controversial', in the sense that most mainstream economists, right or left, view the gold standard as more or less nutty, and of course, the 'nuts' don't like being viewed as such. The ensuing discussion is never pretty, and is completely unrelated to hacker news. Some of us would prefer to just not see it here. You can talk about that kind of thing here:
Whether you believe in the gold standard or not, this article was not about that.
There are many things they did that are very applicable to current startups. In particular governance models and transparency are very much issues that current startups need to worry about.
The point about Know Your Customer is also an important one. In the 90's when e-gold started there was a lot of experimenting with this. Most people in the industry were weary about government involvement, but didn't think it was going to affect them.
At some point it isn't inconceivable that social networks, email service providers and others will be required to follow similar Know Your Customer procedures to banks. Several countries are already starting to institute this.
>most mainstream economists, right or left, view the gold standard as more or less nutty
Sorry for continuing this particular topic of conversation, but that is entirely false. Most economists don't advocate a gold standard, but you will find serious discussion of it in any mainstream economic journal that touches on monetary policy or history. The monetary system that served most of the Western world for several millennia is not considered "nutty" in academic circles.
At least, we discussed works by several modern advocates of the gold standard that regularly publish in mainstream economic journals in my Money and Banking class.
Egold was NOT about the gold standard, although the article makes it out to be. It may have shifted towards that in the very end due to the tightening regulations that forced them to abandon their initial purposes, but gold really had little to do with it. Get it straight.
These regulations are what make online payments that are as easy as cash legally impossible. It's a serious detriment to startups.
It was an interesting read, but it wasn't 'brought down by the man'. A better title should be: know and follow the applicable laws before making a startup.
