PayCoin - The Next Big Scam In Crypto

Categories: Fraud

PayCoin – The Next Big Scam In Crypto

What is paycoin?

PayCoin (XPY) an altcoin backed by GAW miners, which is believed to be a scam, recently joined the Top 5 club of cryptocurrencies according to its market valuation on CoinMarketCap. At the time of valuation, PayCoin was also informally launched on 16th December with an initial investment of $54.5 million brought into the market. It is also believed that PayCoin is part of a ponzi scheme with GAW Miners playing a major role.

This staggering amount of investment was coupled with an enormous surge in mining difficulty as miners rushed to get their first PayCoins. During the initial launch, PayCoin broke all previous records of alt coins and attracted 40 to 50+ peta hash of SHA-256 mining power, the equivalent of Bitcoin

network. “Surging from 0 to 40 petahashes is unheard of,” said Jonah Dorman, general manager and vice president of GAW Miners.

So, is it yet another hot thing to buy on the market for quick profit or is PayCoin really bringing something new to the table? During the early days of Bitcoin, there were obvious scams where red flags were raised all over and yet the new blood got slaughtered. More recently, it has become slightly difficult for the bad players to carry out their illicit behavior. By masking as the greatest thing ever since Bitcoin, PayCoin is now utilizing smart marketing tactics to get uninformed investors involved in their very carefully executed scam.

Lack Of Evidence

According to PayCoin’s whitepaper, they have implemented Hybrid Flex BlockChain – a ‘lite’ version of blockchain ledger that will enable quick transaction clearance for the merchants and prevent blockchain bloating at the same time. Yet, there are no technical specifications of how this groundbreaking technology will work except a brief mention of “Prime and Orion Controllers.” Thanks, but no thanks, I think we need a little more than than that just to believe yet.

A Floor of $20

Another red flag which is obvious as the sun in the sky is the “floor of $20.” according to GAW. One of value propositions of PayCoin is the price stability that it will bring to reach mass adoption. How will that be possible? GAW claims to have high net worth investors and banking institutions backing their project. They were going to bring as much as $100 million on the table to maintain a floor of $20 for price stability. The current price of a single PayCoin at the time of this post is $12.28. But, of course, no legitimate institution have shown any public ties with PayCoin and the current price may be associated with price discovery.

Paybase – ZincSave

PayBase is a platform to spend PayCoin at several merchant stores including Amazon, Walmart and Target. To this date, there has been no confirmation by any of these retailers about a prospective partnership deal. In fact, GAW recently purchased Zincsave which uses Amazon’s API to make purchases on Amazon. A reporter at Coinfire explains:

“Keep in mind that if they are using Amazon API’s they ARE bound to the Amazon TOS. Your use as a developer, company or anything else of the Amazon API means you had to agree to the Amazon TOS and they were quite clear to us in the latest statement that what GAW is doing is in violation.”

Conclusion

One thing that this wild west of crypto world have taught repeatedly is this: Do your due diligence before investing. 95% of the newly created coins are scams in one way or the other. Since there are no regulations, there is no accountability and never invest more than you can afford to loose. If you liked this article follow us on twitter @btc_feed