Comments: Measuring Fraud in DGCs

The chart may be misleading because it shows total reported complaints.

The fact that Pecunix has 1% and GoldMoney has 1% of the total doesn't mean much unless you consider that GoldMoney appears to have ten times the gold that Pecunix does. Does GM have ten times the number of transactions? If it does then Pecunix has a ten times higher rate of fraud complaints. But that might be because Pecunix was one of the data sources, but GoldMoney was not.

Likewise, e-Bullion has seven times as many reported bad accounts as GoldMoney. Their gold reserve is about the same, but I suspect e-Bullion has more accounts and more transactions...

The chart is rather poor because the data sample was rather limited. Don't draw too many conclusions from the chart.

Posted by Ken Griffith at January 18, 2004 12:29 PM
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