For the sake of discussion, let's assume there is a buy wall on Paybase that's accessible to all Paycoin wallet holders.

How large would it need to be for the coin to last more than a couple of days?

How large for more than three months?

How large for more than six months?

If it can pass six months, it'll be around for a while, but how much backing do they need to get there?

I don't think it needs to be terribly large for the initial dump, considering how many HashStakers there are out there. Just pulling numbers out of my ass (hey, GAW's CEO does it, so why not me?) - Let's say they pass out 4 mil PC to Hashpointers, and around 500k are mined. I'm not sure how many hashlets have been converted, or have been sold, but let's guess 250k into perms, 250k six month, and 250k 3 month. Some people might keep coins in a normal wallet for 5%, let's say 10%. So you're looking at 3.75*.9 = 3.375 million coins in the initial dump. At $20 per,

$67.5 million for initial.

$2.5 million more for 3 months.

$7.5 million more for six months.

So, just guessing at the numbers, It would take a wall of $77.5 million to keep this coin sustainable, assuming that all large investors keep their coins more than six months.

It seems like that's reasonable. So I bought a little bit of PC on the open market. Not much, though, as my numbers are all guesses. But I think GAW has a solid shot of pulling this off.

Edit: In addition to making up the numbers, I'm assuming a return rate of 50% for hashstakers every three months.

He's not out a ton. Looking at nicehash rates, 50 Th for 12 hours is about $120 or so. It's not fun to lose that, but he's not going to lose his house over it. That's an education expense.

The market for primes on HashMarket is even stranger now. It used to have eerie stability with a pretty shallow market.

Now, with drastically reduced supply and reduced demand, there should be dramatic price swings. However, it kind of spurt up to $63 yesterday and ... stayed. Under $63 is still being bought up quickly, but $63+ languishes.

It's like there's one super-rich whale who sets a price and buys up everything beneath it. These hard price points are just weird, and they still exist even with a much more shallow market.

Because he'll relaunch with a hard fork, and only that blockchain will be supported by the price support fund. Since the price support fund is the only thing this coin has going for it, whoever controls what that fund supports controls the blockchain.

That's about a third of my pessimistic estimate a few pages back. I thought people would get 1.5 million, and even then I questioned the point. 500k? Ouch.

Because the coin is awful. At least with a Prime, you get DD for half a day without maintenance fees, and eventually you'll make some small amount of money. The staking wallets, on the other hand, are worthless unless they hard fork with about a gazillion changes to the coin and at least one major innovation that keeps the blockchain manageable.

There's no hybridflex anything here. That was all fantasy. This coin is unwieldy.

I believe at this point, anybody who chose to flip his miner into a staking wallet has to be facepalming pretty hard.

This is awful.

Jesus Christ this is going to be a nightmare. Instead of a compressed blockchain for user-level wallets, it's going to be incredibly massive since it shoots for 1 minute between blocks. Not to mention that 1 minute is still too long for point of sale, but whatev.

For those not looking at the source, PoW ends Fri 19 Dec 2014 01:00:00 PM EST

They might have enough reserve to handle the first wave of dumping. They might even be able to handle the wave three months from launch. Six months from launch, this coin dies.

This "for the miners" is total crap. He sucked almost all of the reward out of the mining phase.

It doesn't change the math for anyone else, but for people in the general public who want to mine some, there's not much left to mine (and they'll be competing with GAW).

He just should have cancelled PoW instead of having this pointless exercise.

So what's the point of the PoW phase? There's about 1.5 million coins, and GAW's going to throw all of the hashpower they free up from converting Genesis, plus any they had for their own mining, plus whatever portion of ZenPool that's SHA-256 and freed up from converting Zens and Primes. That's a lot of cycles, and they're probably going to come away with almost all of those coins. Why didn't they just "reserve" them, too, and skip the PoW? What's the point of it?

Well, it's likely $25,000 in Paycoin, which is 1250 Paycoin for the grand prize. Who knows how much that will be worth for reals? It could be $12.50. It could be $30,000.

Or he could surprise us and pay out in cash. lol.

You can't just black box it or any activity that ever involves resources and profit is a "security". It matters that it not just depends on computational resources but actually consists of computational resources. That's what a non-Zen solo hashlet is.

Now, you might not believe that, in which case there could be some kind of violation. But based on the evidence out there, non-Zen solo hashlets do not rely on the efforts of people besides occasional incidental maintenance.

Other than ZenPool and misrepresenting the risk involved in PayCoin price support, I don't see a lot here. ZenPool could kind of be a big deal, though. Even with ZenPool, though, there's a chance it could be some kind of subleasing arrangement, although it's very difficult to construct scenarios where there's not some kind of securitization.

I am familiar with the Howey case (and the Shavers case, which is where it came up). Buying a non-Zen solo hashlet is a different thing because what you're primarily buying is processing time. It's like buying time on a mainframe back in the 80s. Although there might be a small amount of maintenance, the computer is already set up, and you're renting timeslices on an item. In Howey and Shavers, the investors were primarily buying the efforts of people (harvesting, selling, etc.). Here, you're buying time with items.

Now, ZenPool is different because he's admitted that he does other activities that create the profits enjoyed by those "mining" the pool. That's where the Howey test scores big. For the other solos, I don't see it.

I don't think it's a financial instrument because crypto isn't "money" from a regulatory standpoint.

If I'm a physicist working on a hard problem that requires data from a hard problem I've already solved, so I rent space on a huge mainframe to do the calculations, is that like a CD or a bond? No, because that data isn't currency. It's an asset with value, but it's not currency. That's like saying planting seeds is like a CD or a bond. Or making widgets.

The more I think about it, the more (3) kind of stands out. There you're not renting anything because "mining" ZenPool involves things like taking money from renting hashpower to other companies, which pretty much sounds like a security under the scope of the SEC.

I get (3). That's been on my mind for a while. (1)'s kind of a bigger issue, but there's enough support now for bitcoin not being a security directly subject to SEC regulation that I don't think that's an issue.

How is (2) a SEC-scoped security? You're renting disk space, processing time, and software.

An LLC can have a president and a CEO. It can choose to be structured like a corporation, but it doesn't have to.

Actually, that's just about the only normal thing about this company.

I'm not going to make fun of people. The way I see it is that it's likely not a Ponzi, but it is a risky idea. The people still in either are staying in for entertainment purposes, think that the risk is low enough that the expected value of the investment is positive, or don't understand how risky Paycoin is or how likely it is to completely fail.

I tend to think most people are in the third category, seeing all of those calculations with 400 HP -> $20 as a basis. A failure to understand risk is either a symptom of low intelligence or poor education, and I don't feel comfortable taunting over either.