E-gold is theory is a virtual currency which is pegged to the price of gold. Technically speaking, the total e-gold value is backed by physical gold. E-Gold the company does not deal with exchanges from real currency to e-gold and you need to find someone willing to exchange currency to e-gold and vice versa. These exchanges can be through personal exchanges or through an exchanger who would charge anything for their services. You will normally wire transfer money to that exchanger bank account and they will fund your e-gold account with US$ equivalent in e-gold. All e-gold transactions are final which means if you pay someone, there is no way of getting your money back even though the other party cheats you. Your e-gold value can go up and down depending on the value of gold determined by the company. E-gold charges the recipient for incoming payment in a rather complex computation http://www.e-gold.com/fees.html and a 1%/pa service charge for maintaining your e-gold account chargeable every month. E-gold is popular with High Yield Investment Program (HYIP) and with fraudsters. Check out http://en.wikipedia.org/wiki/E-gold Paypal is a 3rd party payment processor which allows for paypal balance to paypal funds transfer to another member or through credit card/debit card or funding through bank account. Paypal transactions are transparent and it is easy to withdraw or fund your account. There is no monthly fees to using Paypal and they only charge you when you receive payment. Paypal does allow you to dispute charges and there is some form of buyer/seller protection. Paypal is used mainly for people who deal with online auctions and use it as a convenient means of paying for products. Paypal is owned by eBay and they work with the local authorities of the 103 countries they have members in.