GAW Miners and the Disappearing $20 Paycoin Floor
At punt is that, ter tegenstelling to bitcoin’s decentralized network, te which no companies or entities have overarching control of the market, paycoin could arguably be seen spil a more centralized alternative.
Te addition to managing the development of the decentralized paycoin currency, GAW Miners operates a paycoin brokerage (PayBase), an exchange for the currency (Coin-Swap) and a network of coin-generating wallets – an ecosystem that many suggest counters the decentralized spirit of the cryptocurrency movement.
Opponents voorkeur that GAW Miners and its CEO, Josh Garza, reneged on promises to back the coin at $20 on the open market, spil well spil a broader commitment to provide a mechanism – the floor – that wasgoed meant to shield it from market speculation.
By tegenstelling, GAW Miners argues that the project to ensure customers can “use your paycoins te PayBase at a $20 value” wasgoed attacked by groups opposed to the success of its project. GAW has since issued a statement on the subject of how the $20 valuation wasgoed reached.
Furor overheen the floor support and $20 value recently predominated the vuurlijn pages of r/bitcoin and elicited comment from several notable figures te the industry.
Since then, the company has seen businesses like exchange service ShapeShift druppel support for paycoin, while a growing chorus has called for Garza to cancel an appearance at the North American Bitcoin Conference te Miami, Florida, of which it is a sponsor. Sensitive customer information wasgoed also exposed during a PayBase security failure on Fresh Year’s Eve.
Complicating the situation has bot the sometimes rabid anti-GAW sentiment that has pervaded bitcoin websites and forums. Te turn, the company’s backing by experienced inter-dealer broker Stuart Fraser, confirmed by the Wall Street Journal, casts doubt on accusations the company is a scam.
Underlying the debate is a lack of clarity among some te the community on whether GAW and Garza definitively committed to the floor and its $20 value, and if they did, how long such a price support mechanism wasgoed meant to be enacted.
Signs that GAW staff and representatives have edited, deleted or restricted access to content that could prove significant to the ongoing discussion have also complicated matters.
Ultimately, the project to institute the floor wasgoed waterput aside after what the company described spil uncontrollable paycoin sales volume and concerns that GAW could be held liable for manipulating the market should it become more involved with its deeds te the market.
A review of posts from Hash Talk, spil well spil insights gleaned during a fresh vraaggesprek with Garza, suggests that GAW actively used language that wasgoed likely to invoke the idea of both the floor and the $20 value when pitching the project.
By directing the development of the coin and establishing an online toneel that conducts market operations across all exchanges, GAW sought to make known its strong presence ter the market.
Ter the run-up to the launch of PayBase, Garza divulged market movements, indicated that so-called “whales” were about to inject the market, and used language that, while inconclusive but unquestionably spirited, is suggestive of the pump-and-dump culture that GAW said it sought to fight with paycoin’s stability mechanism.
Forum posts suggest that GAW had reason to suspect that customers and observers were perhaps misunderstanding GAW’s claims regarding its intentions te the market, spil well spil the relationships that would add value to its core products. However, the hard did not act to waterput the record straight.
The misconceptions extended past paycoin. The idea that retail giant Amazon may playmate with GAW to accept paycoin for purchases te particular had bot circulated by Hash Talk users, but according to Garza, GAW opted not to keurig prior misconceptions about the anticipated partnership because “wij thought it would add more issues to things, so wij just overlooked it and just moved forward”.
“What wasgoed happening at that time behind the scenes, wij bought a company at the time that made that announcement that had the relationships with those merchants to be able to permit us to technically or programmatically be able to fulfill those purchases.”
Garza’s comments suggest that perhaps overenthusiastic community members could have also played a role te shaping the public discourse about its market movements.
“That wasgoed another miscalculation,” he continued. “I didn’t realize that people would proceed to talk about it overheen and overheen and overheen and it would snowball into something much fatter than wij intended it to be.”
GAW’s original postbode on the subject of the floor could be seen spil an indicator that it wasgoed aware that perception about the project wasgoed perhaps being contorted.
Origins of the floor
Garza told CoinDesk that GAW never explicitly committed to buying paycoins at $20 without question.
He suggested that assumptions about the floor mechanism spread among customers and acknowledged that GAW “should have done a better job of managing” customer expectations about the precies nature of the stability mechanism. Today’s statements could be seen spil a budge to juist this.
Garza informally announced a public suggesting of what wasgoed then known spil ‘hashcoin’ for a suggested price of around $20 te late October.
During this period, more details about the coin emerged and a development roadmap wasgoed released that included the $20 public suggesting price.
Plans for a coin adoption fund were also disclosed. According to the project collective with customers prior to the launch of paycoin, the fund’s purpose is to “provide a safe floor price”, spil well spil facilitate other projects like developing apps, building gegevens centers and developing relationships with merchants.
The hashcoin ICO thread linked above is presently unavailable, but a pair of Hash Talk posts from 31st October include a number of customer questions that Garza answered on the subject.
On 28th November, a question-and-answer session hosted by Garza on Hash Talk focused on GAW’s HashStaker service and involved another reference to both the market floor support and indications of a $20 value.
The floor te act
On 22nd December, Garza published a postbode on the company’s Hash Talk forum entitled ‘Spread the Word’ ter which he referenced the much-discussed $20 floor he and his company have invoked both prior and since to the launch of paycoin.
Te the postbode, Garza told users that the company wasgoed beginning to institute the floor:
The use of thesis measures wasgoed very first disclosed on 22nd December, when Garza indicated that trading bots managed by GAW were actively participating te the paycoin market on cryptocurrency exchange Cryptsy.
Ter a postbode a half-hour zometeen, Garza wrote that “my little bots are everywhere”, and at Trio:22 AM EST corrected a user who said the market moves were related to latest announcements by the company:
Te a presently restricted postbode entitled “GAW is About to Stir the Market”, Garza outlined the shove te some detail:
That morning, Garza wrote that GAW would be using its resources to shove the price higher than the $20 floor and suggested that the purpose of doing so wasgoed to avoid technical challenges.
When asked about disclosing the PayBase purchases to customers, Garza argued that leaving indications about the deployment of market-stabilizing mechanisms wasgoed “suitable”, telling CoinDesk:
“I think that if you’re going to go out and buy a significant amount of paycoins and you have a community that is invested ter paycoins, it seems adequate to let them know. There’s a good chance that that’s going to switch the price because of how many you need to buy, it seems suitable to let them know that before you do it, so they have the chance to purchase more or sell them if [they] want to.”
“Wij’re ter the kleuter of a unique position because wij’re aligned with the coin,” he continued. “Unlike BitPay or Coinbase, where the coin that they use te their system is independent of them.”
On the 22nd, Garza also pointed to the involvement of large investors with outsized influence ter a marketplace owing to their significant buying power, telling Hash Talk users that undisclosed market movers were getting into the market.
“I just had all our ‘whales’ contacted,” he wrote. “They are moving ter.”
Garza told CoinDesk that the whales constitute a network of individuals connected to GAW composed of those “significantly invested ter paycoin”, noting:
“It’s a touchy situation, because wij don’t want to get into a screenplay where wij’re making large purchases behind the veil without letting people know because if wij do that, wij think wij could see a reason why a customer would have a problem with that.”
“Every time wij’ve done a significant purchase, or a significant sale, wij’ve let customers know about it,” he said.
On the 22nd, customers received an email from GAW’s cloud mining toneelpodium, ZenCloud, which said that the current market conditions were “the last chance” before the market floor wasgoed expected to be waterput te place. That night, GAW announced it would delay the launch of PayBase.
Ter a postbode that, at the time of this writing, is unavailable for public viewing, Garza outlined the reasoning for the delay and emphasized the promise of the project, including a commitment to charge no fees at launch. He also suggested that the trading methods previously deployed would be temporarily slowed until the PayBase launch.
Garza told CoinDesk that early market activity using the trading bots wasgoed, at the time, a process to acquire paycoins prior to the launch of PayBase. Garza stood by the decision to both inform customers about the market deployment, and called the budge by PayBase to end plans for a hard floor “a way to clarify our position”.
“Wij want to send a clear message that the value of paycoin ultimately needs to be driven from the utility and use of paycoin, versus doing one thing on one market versus another,” he said.
Twilight of the floor
On 30th December, Garza posted on Hash Talk that he would cease providing information on GAW’s deeds te the paycoin market. However, he alluded to preplanned market support prior to the PayBase launch, writing:
The next day, PayBase beta invites were distributed to users. Ter a launch message posted by Garza, he stated that GAW had “moved the market” and wasgoed honoring the $20 price.
“Spil of this writing, wij have moved the market to above $20 to create the floor, just like wij said wij would,” he wrote. “Should there be a rush on PayBase, wij will hold the value of paycoin with our existing resources.”
Ter a postbode straks that day, Garza outlined how plans to keep the floor at $20 were disrupted by high selling volume on the PayBase webpagina, spil well spil a coordinated effort on the part of malicious actors to drive the price below the floor using previously accumulated paycoins, citing evidence collected by GAW staff.
Documents provided to CoinDesk by GAW point to posts by a Bitcoin Talk user bragging about past and planned market deeds, spil well spil IRC comments outlining the potential for investors to sell te big numbers amid market highs.
Garza wrote to customers at the time:
“I always said two things. Wij would buy paycoins at $20, or wij would use our resources to manage to $20. They both mean the same thing. Wij will do everything te our power to make the price $20. And that’s what wij are doing.”
He disclosed that GAW had expended significant amounts of money during the process and implored customers to determine whether they supported the long-term vision of paycoin.
“I’ve made my choice,” he concluded.
Ter the following days disagreements rose among customers of GAW, spil well spil observers te the cryptocurrency community, spil to whether the company wasgoed turning its back on a commitment to keep the price at $20.
It wasgoed during this time that calls for Garza to druppel out of his speaking slot at The North American Bitcoin Conference very first arose, prompting organizer Moeder Levin to ultimately arrange a question-and-answer session, which is set to take place during the Miami-based bitcoin conference.
On 3rd January, ShapeShift announced that it would be withdrawing support for paycoin. The exchange stated that GAW had failed to fulfil “a ensure” to shore up the value at $20. The budge followed calls from some community members to boycott exchanges that listed paycoin.
“People make business mistakes all the time, and it doesn’t mean its a scam,” ShapeShift founder and CEO Beorn Gonthier told CoinDesk at the time. “But deleting former promises is unacceptable, and wij couldn’t te good conscience proceed listing paycoin on ShapeShift.”
The growing fallout has also ensnared at least one exchange that previously eyed significant paycoin volume. Coin-Swap, which according to a latest CryptoCoinsNews report wasgoed purchased by GAW, received requests from representatives of several altcoin communities to have their coins delisted from Coin-Swap.
Representatives from the blackcoin, dogecoin, litecoin and neoscoin communities cited concerns that GAW would use its ownership stake to influence the price of paycoin.
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