Note: I decided to write this story as an op-ed for two reasons. One, and most important, shady happenings around Paycoin is no longer breaking news. After everything that has happened, regardless if you feel it is a scam or not, more controversy has stopped being a man bites dog story and has become a dog bites man story. Two, I am tired of holding punches when it comes to Paycoin. There comes a point where objective journalism as it is perceived and taught in the mainstream no longer serves its function. Gonzo journalist Hunter S. Thompson spoke about it when speaking of Nixon and why he was elected. I am uncomfortable paraphrasing one of the greats, but the gist was that objective media failed the American public because they were too hesitant to call a spade a spade because they feared losing credibility. They knew Nixon was a corrupt, vote grubbing, greedhead, but calling a major presidential candidate that on national television or in print, even though they knew it to be the truth, couldn’t fit into their view of what objective journalism is.
And so we got shock and awe and secret bombings in Cambodia and sabotaged peace talks.
In this article, I don’t have an ax to grind. I don’t gain or lose by Paycoin’s success. I am a writer and a poor one at that. My Bitcoin holdings, while making up the majority of my savings, number in the single digits, the low single digits. Paycoin succeeding at the expense of Bitcoin won’t change my future plans. I would just start writing about Paycoin, I can do that, I am a cryptocurrency journalist.
I’m not going to shy away from what I see, what everyone who is paying attention and isn’t blinded by their previous investments already sees. I’m going to call a spade a spade, and Josh Garza, GAWMiners and Paycoin, in my opinion, are definitely spades.
It is a story fit for one of those satirical articles that writers love to write on April 1st, only it isn’t April 1st and Josh Garza is dead serious, or at least, he claims to be. Once again, serious or not, the situation is bad for cryptocurrencies as a whole.
Days after announcing that Paybase, once promised to be the shining jewel of the Paycoin cryptocurrency, will be shutting down, the Paycoin team has announced a new exchange in an attempt to keep the faithful remaining few around. Paycoin, if you haven’t heard, got a lot of mainstream press after it was announced by Josh Garza, the CEO of GAWminers. There was a heavily implied twenty dollar price floor, promises of a VISA card, Bill pay, partnerships with major retailers and a other features that convinced a not insignificant number of people to pay between four and twelve dollars a Paycoin. Paycoin is currently hovering around USD $0.50, in the same way twenty dollar Snake Oil may still hold some value after its scam is revealed. It should also be noted that Garza owns the rights to BTC.com and has been hinting at that domain’s eventual integration into the Paycoin ecosystem.
The Paybase announcement was made last week on the hashtalk forums. Josh Garza, now posting under the name “MrCEO” as opposed to his old forum name, GAWCEO, made an extremely brief announcement. The announcement itself should serve as a red flag for any remaining Paycoin believers.
Just some of the problems with the announcement include that it was posted on the forum and not Paybase’s official page, that the announcement was two sentences long and included no details on when Paybase would be shutting down or how long users had to withdraw their funds, and that people are still having issues withdrawing both Paycoin and Bitcoin from the site, should be enough to make reasonable people run for the hills. It would be an insult to individual butt cheeks to say that the announcement was “half-assed” it was utterly unprofessional and showcases how little concern the folks at GAW have for their investors and remaining believers. The post wasn’t even pinned, causing further confusing on the forum.
Truthfully, no one should be surprised. Swindlers rarely have concern for the marks they are scamming. Users were instructed to transfer their Paycoins to Paycoin.com for staking. Paycoin.com has had nearly as many issues as Paybase did.
Paybase still lacks any kind of official announcement, on its blog or elsewhere about the pending shutdown, despite an earlier blog post titled “A Message of Clarity: PayBase™ Is Here to Stay” where it was stated that “[The Paybase] blog will be the source reserved for announcements of this kind, and all future communiqués.” The one indication that it is shutting down: The signup page has been removed. Presumably, signed in users see a warning of some sort as well, although this has not been confirmed.
To replace it, a new exchange, dubbed “Mineral” just launched yesterday. It claims that it is the “fastest growing” cryptocurrency exchange on the web. The source of that claim is not clear. I suppose it is easy enough to claim going from one member to ten members represents a 1000% increase in users, but at the time of this writing there is hardly any volume on any of the five markets supported at launch.
The Mineral announcement, which was also posted on the forum and also wasn’t pinned, brought over a few of the promises from Paybase. Debit cards, Bill Pay, and the ability to stake your coins while holding them in the exchange. Suspiciously absent from the promised feature list is anything about the $20 pay floor or its replacement honor program. The announcement also stated that the hashtalk forums would be closed permanently. Supposedly, the archive will be moving over to Mineraltalk.com, keeping all the evidence for a potential SEC investigation in tact. We will see if that ends up being the case, or if “technical issues” end up preventing the merger.
Currently, none of those features are live and immediately after launch, the site has already seen its fair share of issues. Potential users are reporting trouble signing up and the forums going online and offline. One major difference from Paybase: Josh Garza is distancing himself from the exchange.
This has been a major trend for Paycoin in 2015. First, development was passed onto the “Paycoin Foundation” from GAW itself, and now the coin’s major exchange is being replaced with this new exchange that Garza claims to have no affiliation with, despite being given the honor of announcing it.
So to recap: After numerous downtimes, never fulfilled features and a long list of technical and other issues, Paycoin’s main exchange is shutting down and at the same time, a new exchange is opening up and already has featured one downtime, is promising still unfilled features and has a growing list of technical and other issues.
Just about the only change that has happened is the name switched from Paybase to Mineral and Josh Garza is publicly disavowing any responsibility of what happens at the new exchange. The new exchange is based in Hong Kong, by the way, and its ownership hasn’t been publicly disclosed.
Also not publicly disclosed, is what will Garza and GAW’s role at Paycoin be moving forward. GAW is in control of a significant premine, and possibly more, seemingly ill gotten, funds. If GAW is no longer in charge of Paycoin development, what do they plan to do with this not insignificant amount of coins?
At the risk of being insulting: What kind of idiot would stick around for this? Every promise given by GAW and Garza has turned out false. The closest thing to a Payfloor they have is hardly worth mentioning. “Coinstand” is a store where users can supposedly purchase items using Paycoin with each Paycoin being worth twenty dollars. A few users were selected by Garza to participate, and invites have been going out extremely slow (Garza claims they are in the “delta” phase of testing). Everything about Coinstand screams Ponzi scheme. Everything has the look of system designed to keep people around just a little longer. Sure, some people have posted videos showing products they claim to have come from Coinstand, but what is the cost of one laptop or HDTV if it raises the price of Paycoin up a few cents? Garza and GAW have plenty of Paycoins laying around, and they can apparently create as much as they want. That is assuming the videos are even real at all.
The Delta phase of software development in another name for the “Release Candidate” phase. This implies that the product is essentially done and will be released to the public soon. I have my doubts that will happen and will gladly eat crow if it does. I want to state this definitive: Coinstand will not honor $20 a coin for the general public, or if they do, it will be only for select and limited inventory that will quickly sell out and won’t be replenished at any kind of reasonable rate.
So, what is left? How has the cult of personality that is Josh Garza convinced so many people to stay the course, even with a mountain of evidence in front of them that he at the absolute least isn’t being honest with them?
Every story that comes out on here, Coinfire, Cointelegraph or even CryptoCoinNews (a site that previously posted positively about GAWminers) is called FUD by the believers, but what motivation do us journalists have to lie? How do those motivations stack up against Garza’s to do the same?
I can’t speak for other journalists, but I do not hold any Paycoin. I’m not trying to drive down the price so I can pick some up cheap and then sell it when Garza’s promises come true, because they won’t. I wouldn’t touch Paycoin if it was less than a penny, a satoshi even. It is cheap rip off of a more innovative coin, it hyped its way to prominence by promising features its creator knew he could never deliver on, and now that creator is, I suspect, just riding the train as long as he can, attempting to put as many miles, dollars and lawyers between himself and the SEC as he can. I’m not going to help him pay for it, you shouldn’t either.
The truth is, Josh Garza is running an internet cult. He has convinced thousands of people that he is their savior. They believe that if they pay enough tithing in Bitcoin, time and energy, he will eventually lead them into a paradise where everything is exactly how he promised it and Paycoin is worth twenty US dollars.
Mineral is nothing but a new digital take on Sugar Candy Mountain, the same way Coinstand is, the same way the Honor program was, the same way the non existent VISA deal turned non existent MasterCard deal was before that, and Paybase itself was back during Paycoin’s short lived high water mark in late December 2014.
If someone knocked on your door and asked for money while promising everything Garza has promised, you would tell him to get lost. If you gave him the money anyway, you would surely know now, four months later, that you have been had. Why would the internet world be any different?
After the “never expiring, always profitable” Hashlets died, the failed and weak attempt at a price floor, leaked emails showing malfeasance, GAW controlled Primestakers receiving 3500% interest on their coins, suspicious and unbacked claims of being “hacked”, supposedly “Burned” Paycoins coming back to life, the apparent aborting of the honor program and the death of Paybase, I have to ask the Paycoin faithful: What would it take to get you to believe you are being scammed?
Hanging over this whole thing is BTC.com, which Garza owns, and he hints he has big plans for. It is unfortunate that someone more reputable in the community didn’t snag that domain before Garza, and now we will have to deal with the consequences of that.
The next big Bitcoin adoption period will have thousands of people typing in BTC.com and being redirected where ever Garza wants to put them. If their experience is anything like Paycoin customers’ were, that would be just. . . Gawful.