E-Currency exchangers: How do eCurrency exchangers operate?
When one needs to change a currency, for example, Dollar bills, into any other currency, one usually seeks out a cambist or money exchanger. The world is full of them; the most familiar are our own local banking branches.
We do this because it would be hard to pay for a coffee in the centre of New York with Indian Rupees or fill the gas tank of a rental car in Croatia with a Moroccan 100 Dirham bill.
They will offer to take your foreign money (most of the time) and give you back local currency instead, which you will be able to spend. The trouble is that more often than not, the rate at which your local bank will do the change from one currency to the other is not very interesting when you have small amounts of currency to change.
By the time the banker has calculated his costs and commission, a significant part of your original small sum will have evaporated. This created an opportunity for independent foreign currency exchange bureaus, which will compete for this market by charging less commission and offering a more competitive exchange rate.
When Internet business operators began pioneering the World Wide Web to offer goods and services, they hit the traditional currency exchange risk wall. Not only did they find out that the currency exchange costs could be prohibitive, but that fluctuations between national currency markets could hit their slim profit margins so hard that it would put them in the red.
In order to limit this exposure, someone had the bright idea to create eCurrencies, or alternative online currencies that could be converted either to cash, services or goods.
One such example would be the “lunies” at toluna.com, where businesses conduct market studies via opinion search and polls. It became a logistic nightmare to work with cash, among others because of the prohibitive costs linked to exchanging small sums, so the site owners created their own eCurrency, the “lunie”.
Now everyone anywhere could participate in polls and make their opinion known in exchange for lunies, which, when accumulated, could lead to desired rewards. Today, “lunies” can be converted to clothing, goods on Amazon.com, movie tickets, wine or Air Miles.
For the HYIP market, this principle has been adapted to specialize in exchanging hard cash currency into eCurrency and vice-versa. This way, many hurdles can be overcome.
If a crack forex operator manages to invest in such a way that he can consistently place his available capital to yield very high returns, it is but a small step to imagine large crowds of people to want to get in on the action and profit from this know-how.
But what if this miracle worker resides and operates, say, from Brazil and the candidate investor lives in another country, for example, Ukraine? Our Ukrainian Investor would have to convert his local currency into US Dollars through a local bank branch and wire it to Brazil.
This would involve banks and their local correspondents, causing a cascade of costs. More knowledgeable people would know how to look for a bank that would not need a correspondent, but chances are the bank will sell this service for a premium.
No matter how you approach this issue, the costs involved are such, that most will desist. But what of our crack forex market specialist? Would he not benefit from having more capital to work with? He will be interested in attracting capital to work with because this will allow him to negotiate with even more leverage power.
This is where HYIP sites and e-currency sites the likes of Liberty Reserve or WebMoney come in. There are about 30 e-Currency providers available today and many more are bound to come into this market.
These sites will act as go-between by proposing a common exchange denominator. Liberty Reserve, for example, created the “LR USD”, the “LR Euro” and the “LR GoldGram” and ECU has created the “ECU USD” as well as the “ECU Euro”.
Members can now buy an amount of this currency that can be paid directly into any other account number holder for a significantly lower fee than can be expected to be paid to a bank providing a similar service.
