View source for 1mdc

{{Short description|Digital gold currency}}
{{more citations needed|date=February 2018}}
'''1mdc''' was a [[digital gold currency]] (DGC) that existed from 2001 to 2007 in which users traded digital currency backed by reserves of [[e-gold]], rather than physical bullion reserves.<ref name=Mullan>{{cite book|title=A History of Digital Currency in The United States |author=Mullan PC |date=2016 |isbn=978-1-137-56870-0}}</ref>
The website appeared to switch between various offshore hosting locations, and used software designed by Interesting Software Ltd, an [[Anguilla]] company.<ref name=Mullan/>
As of April 27, 2007, a US court order has forced e-gold to liquidate a large number of e-gold accounts totalling some 10 to 20 million US dollars' worth of gold.  A small part of this seizure was 1mdc's accounts and assets [http://www.usdoj.gov/opa/pr/2007/April/07_crm_301.html].  If the court order in the USA is reversed, a user's e-gold grams remaining in 1mdc will "unbail" normally to the user's e-gold account.  Ultimately e-gold is owned and operated by US citizens, so, 1mdc users must respect the decisions of US courts and the US authorities regarding the disposition of e-gold and the safety and security of US citizens. Even though 1mdc has no connection whatsoever to the US, and most 1mdc users are non-USA, ultimately e-gold is operated from the USA.
== Features ==
As with any digital gold currency, one used 1mdc to keep assets away from [[fiat money|fiat currencies]] and avoid inflationary risks associated with them. To open an account, 1mdc required the user to have a functioning [[e-mail address]], an e-gold account, a password, initials and a [[Personal identification number|PIN]].
1mdc charged 0.05 [[gold gram]]s per spend for accounts that receive 100 or more spends (total over 500&nbsp;grams) to their account in any given calendar month. There were no spend fees for accounts that receive 99 or less spends in a calendar month, and no storage fees on all accounts. This was in sharp contrast to e-gold, which charges a storage fee of 1% per annum. Coupled with the quick and easy transfer of funds between e-gold and 1mdc accounts, 1mdc was attractive to persons with large amounts of e-gold, whose balances gradually shrink due to e-gold's storage fees. 1mdc also offered virtually fee free exchange from Pecunix gold to 1mdc, and a 5% fee to exchange from 1mdc to Pecunix gold. It was often said that most or all heavy users of e-gold are 1mdc users, although of course there was no way of confirming this.
== Criticisms ==
1mdc's e-gold was held in unallocated (pooled) storage (in several e-gold user accounts) which allowed for extra privacy from e-gold's administrators.  However, this increased storage risk, as the client had no precedence on the e-gold they entrusted 1mdc to hold, and there was virtually no way for a user to ensure that 1mdc is maintaining full reserves of their e-gold. The amount of e-gold held in the 1mdc system was undisclosed.
Also, since 1mdc was backed by [[e-gold]], events that affect e-gold also affected 1mdc. Once e-gold Ltd. was instructed by the US government to freeze and liquidate all 1mdc accounts, 1mdc became insolvent by default along with all other e-gold accounts seized in the April 27 action.
==References==
{{Reflist}}
==External links==
* [http://www.1mdc.com/ 1mdc Homepage] (defunct)
* [https://web.archive.org/web/*/http://www.1mdc.com Web archive for 1mdc] (2001–2007)
* [https://web.archive.org/web/20110101121037/http://indomitus.net/2004status.html#1mdc The Indomitus Report covering 1mdc] (Jan 2005)
{{Digital gold currencies}}
{{DEFAULTSORT:1mdc}}
[[Category:Digital gold currencies]]
[[Category:Defunct online companies]]