January 4, 2015 1:28 AM

Josh Garza to Address Growing PayCoin and PayBase Scam Concerns at TNABC in Miami

Josh Garza’s speech at The North American Bitcoin Conference (TNABC) in Miami coming up on January 16th has turned into a critical Q & A session as a result of community pressure. There is a growing group of people who want to have Josh Garza removed as a speaker and PayBase removed as a sponsor. They have asked for this due to their concerns that PayBase and GAWMiners is a scam or worse. The community’s concern has caused large amounts of discussions on BitcoinTalk, reddit, and HashTalk.

Note:  In following up with GAW, CCN was linked to information posted by GAW prior to the release of PayBase about price fluctuations and the handling of the $20 floor as well as what the community could do to help.  This info can be found here.

In response, Moe Levin of TNABC has suggested a Q&A session instead of a speech for Josh Garza at the conference. The calls for boycotting the event have even brought Erik Voorhees into the fray with a reddit post about not boycotting the conference and how conferences can do more harm than good. The questions will not be vetted by Garza, and the entire Q & A will be moderated by someone chosen by the Bitcoin community to ensure fairness.

Also read:  Bitcoin Myths Exposed! – A Conversation with Erik Voorhees

Erik Voorhees

Hold Your Pitchforks?

An excerpt from Erik’s post:

The argument that if Garza speaks, he’ll damage the credibility of our entire industry is a stretch.

But what may actually damage the credibility of our entire industry is if people visit /r/Bitcoin and feel like it’s just a bunch of adolescent witch-hunters.

Let Garza speak, and let there be a healthy Q&A session for him to confront legitimate, professional questions about the viability of his projects. Don’t bring down what will be an invaluable conference over the controversy surrounding one speaker.

Bitcoin Community Has Growing Concerns

The furor over PayBase, GAW and Josh Garza has been building for a while. This polarization has caused concerns to be overlooked or not taken seriously. CCN reached out to Suchmoon, who started a thread for GAWMiners discussion on Bitcointalk to air concerns and grievances. Suchmoon and others have raised concerns regarding promises made, like the proposed $20 PayCoin floor, all the way to issues like censorship and the deleting of posts that illustrate GAW’s previous promises. Suchmoon explained the reasoning for his anti-GAW stance. He gave CCN the following statement with links and info to back up his claims.

While claiming to bring innovation to the crypto-currency world GAW has yet to live up to the lofty expectations it has evoked among its supporters and does not adequately respond to criticism. The company and its CEO have repeatedly over-promised and under-delivered, and even attempted to scrub their past as evidenced by modified and deleted posts on their own forum, At the same time many who attempt to question and criticize – including some of their own customers – have been labeled as “trolls”. This creates a polarizing “GAW versus the World” atmosphere and raises suspicions that investments of GAW’s customers might be at risk.

A company as innovative and successful as GAW claims to be should take its time and reconcile the dishonest and antagonistic image it has earned for itself in the wider crypto community. It should address the criticism head-on, come clean about any missteps and problems it has had, and start under-promising and over-delivering. Failing to do so will only deepen the rift and might cause widespread damage to the very same “crypto industry” that GAW has committed to grow.

As Suchmoon has asked, GAWMiners has begun to respond to the criticism that has been leveled with two very recent posts on HashTalk. The first is titled We Are Here and the second 30 Days of Transparent Questions and Answers, they may be a start of what Suchmoon and others want to see.

Specific PayCoin and PayBase Concerns

Suchmoon wrote out a detailed set of the community’s complaints and concerns.

1) Unfulfilled promise of a $20 “floor”, or guaranteed buy back and stability of Paycoin.
Original promise (note “will buy”):
Amended promise (note “will manage”):
Subsequent attempts to back out:
Community responses:
Shapeshift drops Paycoin
Litecoin requests to be removed from GAW-owned exchange
Current price well below $20:

2) Unfulfilled promise of merchant adoption of Paycoin:
100k merchants
Ability to use Paycoin at Amazon:
As of now there is no way to spend Paycoin directly, except a couple of obscure merchants such as Meganet and PexPeppers.

3) Claimed but not implemented technology innovations in Paycoin.
Note “beyond the powers of nearly every developer”

Link to whitepaper (see chapter 5):

Source code analysis, for example, hard coded Prime Controllers without voting features described in the whitepaper:
Most of the other promised features either don’t exist in the code or are implemented in a similar haphazard fashion.

4) Claimed but unproven $100 million investment. Not a single investor has come forward, which is unusual for such a presumably innovative project. GAW has not fulfilled promises based on those investments, such as the “floor” promise above, and Paycoin/Paybase development has been underwhelming for such a large investment.
Investment claims:

5) Guaranteed but questionable profitability of HashStakers.
Link to announcement:
(note “everyone who owns one will be profitable.”)
At the current exchange rate and slightly less than 1% daily payout HashStakers would not recover the $10-$20 cost:
At $5 exchange rate the payout is less than $0.05 per day, or less than $4.50 per 90 days. 90-day HashStaker cost between $10-12.
At $5 exchange rate the payout is less than $0.05 per day, or less than $9.00 per 180 days. 180-day HashStaker cost between $18-20.
The exchange rate would need to stay above $10 for HashStaker owners to break even.

6) Other arithmetically questionable claims:
ZenPool hashrate back in August was reported to be in excess of 250 GH/s (Scrypt). This would have been more than 1/3 of Litecoin network. This level of activity was never visible on Litecoin network.
Third party stats:
ZenPool removed their stats page after criticism:
It has been claimed that 60% of Paycoins were distributed to HashPoint miners. This would result in even more unbelievable stats – 2500 GH/s, or 10 times more than the August estimate:
Claim (archived)
GAW has never provided cryptographic proof of mining either Scrypt or SHA256 coins, which calls the above claims into question.

7) Severe reaction to criticism or even to free market actions.
Calling Paycoin criticism “trolling” (post since deleted from

Calling XPY sellers “trolls” and declaring a “hunt.”

Community Polarization

GAWMiner’s Josh Garza Attempts Response

With situations like this where both supporter and detractors feel so passionately, fires ignite. Will GAWMiners’ 30 Days of Transparent Questions and Answers and Josh’s dedication to moving things forward and working harder bring the promised but lacking features to PayBase? That remains to be seen as 1000’s of GAW and PayBase customers, many heavily invested, are looking forward to he outcome of this debacle. Already, his answers are being dissected by the community. The detractors await what they see as a guaranteed failure in the works that could damage Bitcoin and Cryptocurrencies like MtGox and Butterfly Labs have.

Moe’s choice to have Josh do a Q&A is a step in the right direction as it allows for the detractors to ask their questions directly. Josh can interact directly with them in a neutral setting.  RootDude of HashTalk also posted An Open Letter to Moe Levin of the North American Bitcoin Conference – Let’s let him hear the other side of this! in response to Moe’s decision about a Q&A so Moe could see the other side of the conversation.  RootDude’s views are supposed to represent 1000’s of GAW and PayBase customers.

Objectivity is difficult in a situation that has so polarized peoples’ opinions. Erik Voorhees’ reddit post highlighted that point, as some immediately decided that his stance somehow meant he was complicit in helping a scam. Others agreed with Erik that censoring someone in the industry which is supposed to be  built on being open is not the way to go.  At the time of this writing some GAW detractors have threatened Josh, his family and employees with violence.  These threats only make the entire Bitcoin and Cryptocurrency industry look bad and bury legitimate concerns people have.

This impassioned polarization will remain for some time until GAWMiner, PayBase, and Josh either follow through on their promises or be shown to be a scam or failure and subsequently be prosecuted. The future holds so much promise for Bitcoin and Cryptocurrencies, and it is still so early in its development and adoption. Like GAW, ZeusMiner is already at work on their payment system and other companies like BitFury are working on wallets, exchanges and more. Innovation is happening around the worls in the Bitcoin space, and it is interesting where it will take us.

Images from Bitcoinexaminer, cloudresearch, and Shutterstock.

Scott Fargo @TalonTech1

I am a disabled former Systems Admin, computer tech, business manager enjoying crytpo currencies. I am deeply involved in the mining ecosystem and physical coins, It fascinates me how it has brought people from all over the world together into a tight knit supportive community with commerce and tech.