About Liberty Reserve

Liberty Reserve is a digital currency and online payment system with similarity to Paypal, E-Gold, Pecunix, E-Bullion and other E-Currency services. You can send or receive money to or from anyone in the world and unlike Paypal, Liberty Reserve payments are 100% irrevocable, meaning once a payment is sent there is no repudiation policy.

Contrary information sources such as Wikipedia and About.com, Liberty Reserve is incorporated in Costa Rica, not Panama. Their servers are operating in Holland, which is good for a digital currency to have their servers operating outside of the United States. It is unclear where Liberty Reserve’s actual offices of operation are located which is a definite negative for any company wishing to process large business to business transactions. It is also unclear if they hold any licenses to conduct transactions with US citizens or if that is necessary for a Costa Rican based corporation.

Funding a Liberty Reserve Account

As with many digital currencies, Liberty Reserve does not accept direct transactions to and from their system. Accounts are funded or cashed out using an exchanger, and quite a few reputable exchangers accept exchanges of Liberty Reserve. Additionaly, the exchange rates for Liberty Reserve are currently much more feasable than other e-currencies such as Pecunix. This fact makes Liberty Reserve seem to be a viable option for smaller webmasters who are primarily selling advertising or service on their websites.

My Opinions on Liberty Reserve as an Online Business Owner

Liberty Reserve claims to be protected by an offshore trust, and claims at all times to be backed 100% by US dollars for LR-USD accounts, and by gold for LR-gold accounts. However, there is no information provided regarding contact details for the offshore trust, and there is no information regarding the amounts of gold bullion or where the bullion is stored such as is available in plain view on E-Gold’s website. The fact that Liberty Reserve claims to be “backed by gold” but does not provide an examiner and/or summary results such as other digital gold currencies (DCG’s) will cause a significant lack of credibility amongst those wishing to store digital gold with them. The fact Liberty Reserve hides it’s physical office address, does not publish their business contact details and has domain registration privacy on their whois information is another reason to make me wary of utilizing them as a payment option for anything other than small transactions when there is no other option.

The fact that Liberty Reserve, like E-gold and other processors, has a non-repudiation policy and transactions are 100% irrevocable, I don’t see many brick and mortar merchants selling hard goods using the system because quite honestly, I don’t think many people are going to pay for a $4000 Plasma TV or a $600 iPhone with Liberty Reserve funds.

My Opinions on Liberty Reserve’s Design and Implementation

Liberty Reserve’s user interface is simple and easy to use, and it is reminiscent of AlertPay’s interface. The login process is a two step process and Liberty Reserve does seem to have covered the bases as far as providing a secure interface somewhere in between the simplicity of E-Gold and the complexity of Pecunix. They provide an intuitive SCI/API for merchants wishing to easily add Liberty Reserve as a payment option to their websites, and within a few minutes we had the merchant’s interface up and running on one of our test sites.

Overall, Liberty Reserve looks promising if they would just pony up the contact details and the details regarding the amounts of gold bullion in their posession. Until that happens, I’d have to give them a 5/10 rating because when dealing with monetary exchange systems, payment processors and/or digital currencies; transparency is absolutely necessary to facilitate a trust of the system.

If you are interested in opening a Liberty Reserve account, please visit their website : Liberty Reserve

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