GAW Miners, a leading Bitcoin mining hardware manufacture and digital cloud mining provider, announced last week an Initial Coin Offering (ICO) with the introduction of a new digital currency called Paycoin.
“Positioned as the cryptocurrency of the future, Paycoin addresses all of the inherent shortcomings that have prevented Bitcoin from achieving mainstream adoption,” said the Connecticut-based company in a news release. “Paycoin improves upon existing coins by producing a decentralized network structured to promote price stability, fast transaction times, and rich features for achieving widespread consumer and merchant adoption.”
On a website dedicated to this new digital currency, Paycoin is described as bringing “control of cryptocurrency back to individual miners. By using the latest encryption techniques and the world’s first Coin Adoption Fund, Paycoin gives miners an ideal cryptocurrency, fit for global adoption and whose network is fair to individual miners.” The website says the Coin Adoption Fund, established by the ICO, aims to create a stable price; promote mass adoption for merchants, miners, and the general public; and foster an ideal environment for individual miners worldwide.
The Wall Street Journal’s Money Beat blog reported that Paycoin’s core technology is modeled on Bitcoin and the blockhain; however, Paycoin operates on a separate blockchain that, unlike Bitcoin, will entail another layer of “mining” computers beyond the base level of miners tasked with routinely confirming transaction validity and maintaining the ledger. The blog said the higher-level “controller” miners will compress data to make Paycoin transactions more streamlined. This class of miners will periodically bid on the right to do this task, for which they will receive Paycoins. Theoretically their efforts should allow Paycoin transactions to be confirmed and settled much quicker than the minimum 10 minutes that applies to Bitcoin, said Money Beat.
Paycoin will be available to the public starting January 2, 2015, with what GAW Miners founder and CEO Josh Garza told Money Beat will be an anticipated market capitalization of $250 million. The firm will partly back that with a store of fiat currency worth approximately $100 million. The blog said those funds will not function as a 100% reserve, but they will combine with added features within the Paycoin protocol, such as a supply schedule that varies based on miner demand level, to mitigate exchange-rate volatility and therefore aims to resolve one of Bitcoin’s biggest obstacles to mass adoption.
Money Beat said that in a move that could appease digital currency enthusiasts who might accuse GAW Miners of “centralization,” the firm itself will not sell “pre-mined” Paycoins for its own account, but will from the beginning join other miners in competing for “controller” mining contracts.
Image via GAW Miners press release on Market Wired