When the Ad channel came out, I immediately suspected Daniel was attempting to unlock more ICO funds.

The Ad group seemed like a half-baked idea, and just a month prior, he stated that the AE had been put on hold. That's when direct questioning in chat revealed he had already unlocked the 50% milestone without an announcement.

It's obvious why he suddenly needs all the money: PayKey has 8 employees and they're hiring half a dozen more.

Yet over the past year, he spent so little on GG, he didn't need to touch anymore funding than what was given to him automatically after the crowdsale. Now he's attending all these fintech events looking for more investors. Each bundle of cash, if he can get any, will be a nail in GG's coffin.

Unlike agreements with VC's, he has no further commitments to ICO buyers beyond the initial exchange of bitcoins for gemz. Everything after the crowdsale is done on faith.

It was my hope that a bit of pressure could nudge GG back on track. But the situation only grows worse.

You'd think he'd care more about his personal reputation. But we already know what he'll do should everything implode: He'll return to his kibbutz, and conveniently disappear from public scrutiny.

The path Daniel has taken with GG is a common one for crowdsourced projects.

The euphoria of a successful fundraiser leads to the pursuit of an even grander vision that requires more capital.

Instead of completing the product as promised, the funding is used as a stepping stone to receive even more funding from a new group of investors.

As the company builds prototypes and pitches their new plans to those with deeper pockets, they begin making excuses, and eventually stop communicating with their original supporters.

Soon the window of opportunity closes and/or they go bust.

So many crowdfunded projects have ended this way because it takes incredible discipline to manage large sums of money that have been handed over with virtually no strings attached.

http://image.slidesharecdn.com/paykeypresentation-7-151223170351/95/paykey-startup-pitch-at-the-mobile-moentization-summit-2015-startup-contest-14-638.jpg?cb=1450891329

Daniel has already projected that PK will have significant revenue by 2018. There are no such predictions for GG. We don't even know where the development is going because the roadmap was abandoned long ago, likely when all the employees changed.

You forgot a big one: silence.

Even a cursory look thru this thread with show Daniel's abhorrent track record of remaining communicative and accountable to his supporters. The irony of GG being a social networking company is not lost on anyone, I’m sure.

The monthly newsletter has become a sort of personal confession, where he fesses up to things we've already uncovered by digging around ourselves.

I'm sure the next blog will tell us all about this new company he's quietly created. And how he would have informed us earlier, had he not been so busy... working on our behalf.

So long as the silent majority condones this behavior, we'll continue to see a divergence between what was promised and what is delivered.

I don't know if it's naivety, Stockholm Syndrome, or plain apathy, but coinholders can't seem to read the signs that something has gone terribly wrong. You'd think someone would start asking questions.

Sadly, the questions will probably come when it's far too late.

There is a pervasive fantasy that raw app downloads will lift the price of gemz.

Well, 80k downloads hasn't changed the sub-ICO value of Gemz. And a million users won’t do it either, because there isn’t a mechanism that ties app downloads to the coin’s market value.

Later this year, when the millionth user joins our network, their share of the daily airdrop will likely only be a tiny fraction of a penny, regardless of how many referrals they make, or how often they visit the Ad channel. This can be tested with simple arithmetic.

For airdrops to be actually worth something, the price of gemz has to increase by an order of magnitude. This can only happen thru a vibrant Attention Economy, where advertisers fiercely compete for ad space.

But with the AE nowhere in sight, we will greet our millionth user by gifting them a useless and near-worthless token, that they won’t even be able to sell, because they can’t afford the transfer fee.

Will they stick around for vaporware, assuming they’ve even heard of the AE?

Having a few million downloads is nothing special for an app these days. Especially for a free app built with $800k of funding, that's actually just a modified piece of existing software that connects to someone else's social network.

Two months ago, Daniel quietly cashed in 50% of the ICO funds, and now he’s formed a new company that is hiring workers.

We got tricked into funding the banksters. By the time we've hit our millionth download, they'll be little debate on this fact.

Look familiar?

https://www.paykey.com/#/team

Anyone looking for a job?

https://www.paykey.com/#/jobs

Now tell me, are coinholders on the boat? Or are they on the life raft?

It will take a miracle for PayKey to be successful.

Can you imagine each bank trying to convince its customers to swap their smartphone keyboards? Just so they can make payments to… other customers of the same bank?

It’s a flawed, confusing solution.

Platform agnostic mobile payments will eventually be handled at the OS level, where it makes the most sense. Grafting an ATM to the keyboard is as silly as it sounds.

But this is what startups do. They try ambitious, crazy ideas because the potential rewards can be enormous.

Unfortunately, none of us here are entitled to PK's rewards, and yet it's our funding that has contributed to its development.

The worst news is that the company has shifted their focus to PK as their top priority. Daniel is pitching at all these conferences without ever mentioning GG.

What about the GG network? The gemz token? The AE? He deceptively tells the audience that he’s raised $800K from “Koinify", which leads them to believe the funding was meant for PK.

GG has become his dirty little secret. The Paykey demo for Banks in the Play Store has “Paykey” as its publisher. Yet all the GG apps are still published by “Daniel Peled”, like it’s amateur homebrew.

I’m beginning to think that the AE made a lot more sense when the team was building their own network from scratch.

When they switched to Telegram it put them in a box. We’re seeing that now with the ad group, which is a bit of code sprinkled on a regular chatroom, that could have been released any time over the past year.

It’s becoming apparent that we’re just going to get more iterations of this ad group for the foreseeable future. It’s not some temporary mockup.

Of course we’ll be promised much greater things for the future. I just think we’ve bled away so much time, money and community interest that a radical change is in order.

For starters, we need a CEO and dev team that is solely working on the Getgems project right thru until its completion.

This is what every ICO buyer assumed when they handed over their bitcoins.

The advertisement group is a regular Telegram group, where you forward a short message (with a set fee) to the admin, who then manually posts your comment. 

This is not the AE. It is not even a cheap imitation of what is described in the white paper. 

I suspect the ad group was an unplanned development aimed to appease coinholders while the CEO of PayKey focuses on other things.

Waiting a year for this ad group is an insult, and calling it the AE is an insult to my intelligence. 

Imagine if Getgems was a car company that promised to build an exciting new engine that would only run on their special blend of fuel.

To fund the project, they sold fuel tokens.

But a year later, they announce that they’ve built an engine than runs on standard gasoline for their new customer, Toyota.

Well, you might expect that (still useless) token to take a dive in value.

And it has...

But as you’ve heard, some hope that the company's new product (PayKey) will be such a success that they’ll use profits from it to make their old product (Getgems) a success.

I’m sure you can see that this is a naive and desperate fantasy.

If GG/gemz is a success, it will get there on its own merit — not some convoluted path that hinges on Paykey’s success and the company’s outright charity.

Gemz was created to be the fuel for the engine that is the Attention Economy; it serves no other purpose. So if you want insight on what the token could be worth, take a look at the AE.

After 14-months, it’s still nowhere in sight.

Good exposure for GG?

Attacks new users for using Poloniex...

Doesn't realize that GG's hotwallet is hosted there...

Or that Daniel, as recently as last week, was lauding them for their reliability and trustworthiness...

Unlike coinholders, Magma owns an actual stake in the company. They chose not to buy any GEMZ, even though their $400k investment was announced during the ICO period.

On Magma's website, it doesn't mention Getgems' social network, attention economy, or token. Instead, it describes another product, PayKey, which is an app for bank customers to transfer fiat.

In short, the VC's backed PK, and coinholders backed GG. Magma doesn't care about the value of GEMZ, and coinholders have no claim to PK's future revenues.

Furthermore, these two distinct products compete with each other for development time and resources. That is, the same two devs that are working on GG are working on PK.

So saying that Magma's involvement with the company should bolster the confidence of coinholders could not be more ignorant of the situation.

It's ironic how you scold people for not doing their "research before buying".

Unlocking 50% of the funds is a significant, newsworthy event.

Keeping silent about it is not my definition of being "transparent and communicative on almost a daily basis".

You waited over a month to reveal this fact, and only under persistent questioning in the chatroom.

So please, no excuses about koinify.

Why did you not make an announcement about receiving the funds sometime in the past 38 days?

On Dec 15, you received 50% of the crowd sale funds, but decided not to announce it.

On Jan 4, you published a blog, but still kept the funds transfer a secret.

On Jan 22, facing direct questions regarding the funds in chat, you admit that you’re already in possession of them.

What's with the secrecy?

Do you not see the benefits of transparency and basic communication? Have the lessons of the PayKey debacle been wasted?

For reference, the first milestone (Android release) was announced 4 days after the fund transfer. That was completely reasonable.

Some major bombshells coming from GG's general discussion group:

The company unlocked 50% of the funds on Dec 15, 2015, but didn't announce it.

The remaining funds (25%) are no longer held in a multi-sig with keys held by third parties. The bitcoins were converted to cash on March 2015, and sit in a Circle account under the control of "high level executives".

Hopefully an official statement by the company is coming soon.

With the announcement of Koinify closing, what will happen to the remaining milestone funds?

Do you automatically get access to it all now? Has this already happened?

And why has nothing been said of this major event?

From the Q/A:


Daniel, can you point me to where I might find this spending budget?

Also, I can't seem to find the official milestones agreement anymore. A link please?

Begging Daniel for download reports -- this is the sorry state of GG as we enter 2016.

Only a month ago, it was all about how Paykey would be GG's savior. Instead, it destroyed gemz' value, as any rational person would've predicted.

One needs only to search for GG on social media to see how it's currently faring:

Outside of bagholders -- who are only concerned with the value of their tokens -- the app is not being used in any meaningful way. Attrition rates are likely close to 100%, or we'd see a lot more referral links being dropped to access the airdrop.

Here's something to think about for 2016:


Daniel has a plan B.

Do you?

There are objective, real-time measures that would indicate if the app is gaining traction. An exponential growth of users would be accompanied by a commensurate response on social media, if only to unlock the airdrop. So where are all the app reviews, tweets and youtube videos?

More likely, GG has a tiny userbase due to high attrition. Anecdotally, none of my refs continue to use the app, and I think this is common.

If you are confident in your fantasy numbers and believe that gemz are way undervalued, sell everything you own and borrow money to purchase more coins.

Funny how the loudest supporters never seem to be in a position to buy more coins. But they always urge others to do so.

There's something much worse than the halving value of gemz: GG has no buzz or virality after a year of existence.

Search the web and social sphere -- if there are really more people trying out the app now, why aren't we hearing about it? Why aren't they dropping referral links?

GG likely has a very high attrition rate, because its most compelling feature (AE) doesn't exist, and its current features are often bug-ridden.

The company doesn't seem to care about finishing or polishing GG for mainstream use. Maybe that explains their peculiar choice not to market the app. Coinholders are now trying to organize their own marketing campaign.

Because asking Daniel for a piece of the $800k they gave him to promote his own app would be unthinkable.