Alan"s Money Blog

Jul 10, 2007

Interview With Gordon Hayes Creator Of Phoenix Dollar Pt.2

The second part of the interview with the creator of Phoenix Dollar. Enjoy.

(Q) If you had 10 minutes of face to face discussion time with each of your customers, what is the one single idea you would try to teach each one of them about freedom?

(A) hmm, that is a really good question and one that is not easily answered. I don’t believe that ALL customers can be fit into a mold that would relate to something I could convey to them in some generic sense of things. I think freedom is something best left to each individual to determine for themselves. If I could present just one idea, then I guess it would be that.

(Q) Is there an advantage to shopping for one ounce silver bars from your web site, over visiting a local coins shop and buying from them?

(A) I think local dealers have a market that works well and is useful. Our aim is to supply silver bullion products to that market. If you have a local coin shop that also sells bullion then it would be useful to show them our products when you shop there. When a dealer places a large order they can convey the savings on shipping to their customers.

(Q) Are you operating as a Money Service Business? Do you hold any other Federal or State regulatory licenses which permit you to operate?

(A) We are not operating as a money services business as silver is not money according to the law today. Nevertheless, we do understand that the digital silver currency can be used by criminals to further criminal activity if left unchecked, so we have implemented a full anti money laundering program, a customer verification program, employee training and customer education program that serves to keep our system free from fraud. The results of this is thousands of clients and zero fraud. We also do possess a MSB license from the jurisdiction of the USA even though our company is based in Panama. We feel a good anti money laundering program and more importantly a strong anti fraud and anti crime policy is essential to our success and essential to the security of our client’s silver. Our terms of service policy explains all this in greater detail.

(Q) I know that I can buy digital Silver online from at least one other company, GoldMoney, what advantages does the Phoenix Dollar offer over James Turk’s digital product?

(A) James is a wise businessman. His product has its place in the market and is valuable even to our customers. That being said, it has absolutely no resemblance to our product offering. Our focus is on actually holding real silver in your hand where it belongs. We enable the average person, even if not rich, to hold silver in their hand even after someone sends it to you in digital form. This is something that is impossible in other systems.

(Q) Do you ship overseas?

(A) Yes, we ship all over the world to all but a few countries found on the sanctions lists.

(Q) Over the past months, I’ve accidentally ‘bumped’ into about a dozen Phoenix silver buyers around the Internet. Often I’ll be chatting with someone and ask if they know your website and they will say, “Yes, just last month I purchased 100 ounces, aren’t they great?” or something to that effect. A lot of people I know are buying Phoenix products and using your services.

(A) This is hard to see from the outside, but yes, this “community” is built one person at a time through hard work and by doing what I say I will do time and time again for as long as it takes to gain the trust of others. I hold an extremely long term vision for this currency. I intend it to live on well past my own life. Explaining what the community is would be getting into the philosophy of human interaction. That is a topic best left for my forum. I have spoken about the concept of community and how it is affected by the money we use on many occasions and that can be found online if anyone cares to look into it. I am especially interested in how a currency affects a community. When I say the word community, I don’t want to leave the readers with the wrong impression. This is not a socialist/communist/Marxist/Leninist, or any “ist or ism”. This is simple individuals interacting and nothing more.

(Q) From the Phoenix Dollar web site, what are Reputation Points?

(A) When you send silver to someone they can say to the world: “Hey this person did what he said he would!”. This is based on the old adage: ‘Do unto others as you would have them do unto you’. If you follow this simple principle, your reputation will go up over time. If you do not, it will go down. When it goes down to -5 your holding is automatically suspended until we figure out what the problem is and find a solution. The goal here is to facilitate trust and provide the tools to help people help themselves. The better your reputation in the system, the more willing other people will be to do business with you. This promotes a positive experience for our customers and is also part of our anti fraud program.

(Q) The 10 ounce bars are my personal favorite. Can I buy 10 ounce Phoenix Silver bars now from your web site?

(A) Its not explicitly listed as of June 2007, but it will be by January 2008. If you mention it on the order and we have them in stock we will fill your order with 10 or 100 oz bars. They are so popular that we are almost sold out of our first minting without even adding them to the shopping cart. The word spreads fast.

(Q) What is the most popular size? What sells the most?

(A) Surprisingly it is our one ounce bars. We did a lot of research early on and everyone told us that the disk shape is by far the best seller, but this turns out to be false, so much so that we have had to remelt and remint disks into bars at one point to keep up with orders. Both are strong sellers, but the 1 oz bar is the winner here by about 2 to 1 even though I still prefer the 1 oz disk personally. I expect the disks to even out over the long term. The disks are more suitable to over the counter trade. Right now the market just wants to survive a dollar crisis and protect their existing wealth.

(Q) On the digital Phoenix Dollar holdings, what do you charge clients to store their silver?

(A) Its free for the first 300 ounces. After that we assess a 1% fee per annum.

(Q) I recently wrote a story on how e-Bullion account holder’s were exposed when logging in because of a lack of onscreen tools at the e-Bullion website. What sort of protection does your web offer to the digital Phoenix Dollar holding holders? Do you have an onscreen keyword some similar device(s) to protect against key loggers?

(A) Keylogging is easily rendered impossible if you use our pop up type pad found on the login screen. You can use this to click in your password and pin code since keyloggers cannot read mouse clicks.

(Q) What is the Phoenix Treasure Shop?

(A) This is what we call any minting issued outside of our standard bullion offering. A collectible limited edition silver piece would be considered a “treasure shop” item. It is also the pet name of the shop where you buy our silver online.

(Q) Do you keep client information in the United States? Where are the Phoenix Dollar servers located?

(A) Nothing relating to digital silver holding client data is kept in the USA. The company is based in Panama and the servers are located in Hong Kong. We address the risk of data breach as our number one concern in the current marketplace and make great efforts to ensure integrity of customer data according to our published policies.

(Q) I like digital money online holdings which I can instantly set up and use, not millions of dollars, but say $1000 or $1500 needs to be paid to me by a friend. Can someone open and instantly use a Phoenix Dollar holding without having to send in their life story, blood sample and government issued ID? What are the limits on ‘verification’ of an holding?

(A) No. We do not just let anyone setup a holding and go crazy with it. Our policy is currently to allow people to setup a holding for free for testing purposes to see if this is something that meets their needs or is otherwise interesting to them. Beyond that, we encourage identity verification which does come with a small fee. We do have limitations to these free trial holdings. You can do a very low level of business with them, but after certain limits, they automatically fail to work. We also have checks in place to limit holding structuring. This means any attempt to set up multiple holdings to circumvent the holding limitations will fail for all unverified customers. For those who don’t agree with how we do this, we recommend just ordering physical bullion. You can do that without obtaining a digital holding.

(Q) Will you freeze my holding like PayPal did for no real reason and keep my silver?

(A) No. I cannot speak for Paypal and their customers, but I have read enough to understand what you are talking about. This is something that cannot happen here. We have very strict policies that outline what is and is not acceptable. A good rule of thumb is this: If is generally accepted as illegal, then don’t do it in our system. If it is legal, then go ahead and have fun. If you breach our policies, then we can basically do whatever we want to, but that does not mean we are unfair and inattentive. Our goal is zero fraud. When we say zero fraud, we mean ZERO FRAUD. Any fraud that ever shows us in our system is dead on arrival. If we find a customer to be fraudulent then our policies allow us to confiscate their silver to remedy the problem and make things right with any “victims” we can locate. Common sense goes really far with us. You might want to know what that means and what we consider to be fraud, and I will tell you to read the terms of service which outlines everything in very specific terms.

(Q) Do you permit HYIP holdings or ‘autosurf’ programs?

(A) No. We will never allow this type of business. It is exactly the opposite of what we want in a customer.

(Q) If I wanted to purchase just 5 ounces today for delivery, what fees are you going to charge me over the spot price on 5 disks?

(A) .75 cents/oz + actual shipping fees. We do however discount for larger quantities.

(Q) Where do you get your ’spot price’ from ?

(A) It is based on the spot (ask) feed from

(Q) I understand that I can request the balance of my digital holding to be delivered to me in bullion bars. Can I send in some of my bars to fund my digital holding?

(A) That is called bailment. We do this, but only for our own silver. If it is our own minted Phoenix brand of silver, we will allow bailment. This ensures the silver in pure and ensures our purity guarantee.

(Q) Can I integrate the Phoenix Dollar into my existing e-commerce web site?

(A) We have something called the Phoenix Wizard which is a simple Q and A process that helps you create payment buttons that can be integrated with a website or an email system. We also have a well documented SCI (API) for programmers who are experienced enough to integrate directly without the helper tool.

(Q) Do you consider the digital silver holding holdings to be an ‘e-currency’?

(A) Yes. “e” means electronic, although I prefer the term “digital currency” Anything with the “e” stuck on it is just a marketing gimmick.

(Q) Digital users have a unique feature on their holdings known as ‘SafeLock’. What is that and how does it help users?

(A) I will defer to our website for the background explanation of this feature and then I will illustrate it:

Your silver can be secured by setting up a SafeLock® for the amount you wish to protect. A SafeLock® is like a digital safe with a time lock; no one can access the protected silver until the timer runs out, not even you! Your silver will be placed in a special administrative Holding, untouchable by anyone. You can set a lock timer by the minute, hour, day, and year. Once the silver is in the SafeLock, it will show in your SafeLock balance until the timer expires. This feature is useful for securing silver overnight, or while you go on vacation. Silver held in a SafeLock® is guaranteed safe from hackers and criminals who might attempt to gain access to your holding while you are away or through a phishing attempt. You may also use this feature to help you save silver over periods of time of your choosing.

So that being the case, this is a feature not found anywhere else. Its useful in many ways, but I can think of something not mentioned in the blurb. Lets say you are going to Los Angeles tomorrow and your husband is a drunk scumbag and you hate his guts and cannot trust him as far as you can throw him. He is a sneaky person and will stab you in the back, steal your money and go spend it on wine and women since your marriage is on the rocks. OK, so this extreme situation calls for real effective measures.

The Goal: Protect your silver at all costs, even from people who have full access to your holding. The solution: Move the silver to the safelock and set the time until your return from Los Angeles. Then it does not matter if he tries to steal it. Even if he has the password and gets full access to your holding while you are away, it is now impossible to steal the silver. This is a feature we thought out for just such a scenario. We have many security features that are unique to the market. The result is that we have never had a customer that has lost any silver to fraud, scammers, hackers or sketchy people who hold their holding details. This may sound fantastical, but it is true. No one can claim that but us. If you lose your silver using our system, it means that you are not properly using the tools provided to you as part of your free holding.

(Q) What tools do you provide digital Phoenix Dollar users to enable the use of your products?

(A) There are so many. We built the swiss army knives of digital metal currencies. You can do so much that I could not even convey it in an interview. I just encourage people to get a free holding and poke around in the system. I advise that you get oriented to the features before funding your holding.

(Q) Can I become a verified exchanger or distributor for Phoenix Dollar products and make it into a business?

(A) We have a formal process for that. We do not allow just anyone to exchange. Once an exchanger is verified they can add us to their offering. The location to apply is:

(Q) How much Silver do you have in your pocket right now?

(A) I always have a one ounce silver disk in my pocket for luck.

I’d like to thank Gordon for taking the time to answer my questions.

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