Recent news has seen a lot of turbulence surrounding the launch of Paycoin and its progenitor, GAW Miners CEO Josh Garza. A polarizing argument has arisen over the value of Paycoin, the Peercoin fork which many feel has too many promised deliverables to be real.
At issue, is the perceived value of Paycoin. In a Google Hangout a few months back, Garza promised that PayBase would make it difficult for the price of Paycoin to dip below $20. Since Bitcoin traded under a dollar until February 2011, to many this seemed ambitious in the best light, but the nature of value is in the belief thereof. Within days of Paycoin’s launch, folks took to the internet with claims that their $20 promise was being broken as the price declined due to “dumping,” a situation where a coin or stock holder will sell it at whatever price they can get, valuing the currency they are selling for more than they value the asset being dumped. Unfortunately for others in the marketplace, this can lead to severe price fluctuations, and no traded asset is exempt from this problem. This was a point of contention in recent weeks and now PayBase has come out with a strong response to detractors. Recent price dives in Bitcoin and the Russian Ruble are also good case studies.
In a detailed article on its blog, PayBase announced this morning that the $20 guarantee is still a reality, though it is not based on earlier made promises. Community analysis of the Google Hangout session so many were basing their belief in reveals that Josh Garza made sure to state clearly that he was not, in fact, promising that the value of Paycoin would be twenty American dollars, but rather that the firm and its backers would do all they could to keep the value above that number. This, of course, led to a controversy with Litecoin and Coin-Swap, the exchange that is an asset of Garza’s, Litecoin’s lead developer asking to be delisted from the exchange for ethical reasons.
In an apparent effort to soothe its core audience, those who have supported PayBase and Garza, the blog begins in defense of the value prediction.
Our optimism was […] not the result of blind faith or excess pride; our confidence was the product of extensive research, the assembly of a talented team of professionals and a lot of hard work – the investment on our part was, and remains, steadfast. […] We accept responsibility for our actions, and we have an obligation to our own standards of excellence to correct this situation.
From there, the odyssey to a solution acknowledges current price realities and even criticism of Garza himself.
To that end, we have an exhaustive protocol about all future on-the-record remarks. In our words, and through our deeds, we will be firm and firmly unambiguous.
Using a “repurchase agreement,” dissatisfied holders of Paycoin will have the option to sell back their coins to PayBase. The “repurchases” will be transacted in Bitcoin after a thirty-day period beginning February 1st for coin holders to sign up has passed. A third-party will be involved to house the coins and ensure transparency in the process, but the program apparently reserves the right for the company to only have to pay a min of $100,000 per month until the coins are all paid for.
It is hard to tell if this move on PayBase’s part will do anything to staunch the bleeding caused by such a great deal of negativity and polarization, but certainly it offers those who want the $20 (in BTC as it were) price an easy way out.
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