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Tuesday, December 30, 2014

PayBase Goes Live; Price Hits $22 then Plummets, PayBase Premier, etc.

At long last (well, let's be real: we're only looking at about three weeks since PayCoin launched, and less than a couple months since the intention to even launch PayCoin was announced), PayBase is live. And I have to admit, it has some pretty cool features. The best one right now: all you need to send someone PayCoin is their email address. Sounds a bit like PayPal, doesn't it? But that replaces all the cryptocurrency wallet address insanity that we've all been dealing with since Bitcoin first appeared.

Don't get me wrong -- I can use wallets and they're not that hard; the thing is, "normal" users can't be expected to figure that stuff out, and now they don't have to. It's actually sort of funny, though -- I have some very non-technical people in my family, and even PayPal is still a bit of a mystery to them. But this is definitely much better than downloading a QT wallet, syncing with the block chain, etc. So if you want to tip me some XPY for my writing efforts, just send some to my email address at PayBase! (Crickets....)

Signing up was totally painless for me, and as with ZenCloud there's integrated Two Factor Authentication that's required to get things working. That should prevent any of the stupidity we've seen with various scam companies claiming hacks and such.

With PayBase now live, there's also the question of that $20 price floor Josh has talked about since the coin's inception. There are various ways of looking at things, but I'll give you my perspective. First, GAW promised they would buy PayCoin for $20 once PayBase launched. Second, and more importantly, there was absolutely no promise that they would hold that $20 price floor at all cost. So what do you think happened? Yup: as soon as the price hit $20, there was a massive dump.

GAW says they're still committed to reaching and holding $20, but we need to give them some time. Because if everyone with XPY tries to sell at $20, well, that's going to equal at least $120 million (give or take) -- keeping in mind that at least 6.8+ million XPY is "locked up" in Prime Controllers for the time being. Actually, we can even limit things a bit more: according to the block explorer Rich List, 11,837,506 XPY is in the Prime Controllers plus the top 20 or so addresses with a balance of 20,000 or more XPY, and from what I can see none of those coins as moved anywhere.

Which means really, there are only about 500,000 XPY that might realistically be sold right now. That's only $10 million, so GAW should be able to support their $20 price without too much trouble, but I'm guessing they're going to take things nice and slow. Josh said at one point that today was basically the "worst case" of what could have happened, but that's being a bit generous. He also said they were burning through $500K per minute for a bit to support the price floor, which also seems a bit unlikely (unless we're talking about two or three minutes). CoinMarketCap in total only reports $1.5 million worth of trades on XPY today, so unless there was a ton of trading directly on PayBase....

Oh, and don't forget that GAW also put a $700 per week (in BTC) cap on PayBase sells for now, which means unless they had literally thousands of accounts all cashing out for BTC at once, there may be a bit of hyperbole. But that's nothing too unusual for Josh, and he at least has made good on far more of his promises than anyone else in the cryptocurrency world (AFAICT). Including buying at least some coins at $20 after PayBase launched -- just not all of them.

Anyway, only eight or so hours after the launch of PayBase, the price for XPY right now is sitting at roughly $12.18 according to the PayCoin Block Explorer, while if you want to sell on PayBase the price is $12.11 and the buying price is $12.75. (Update: and dropping!) Umm... what happened to "no fees"? That's a 5.3% spread, which would be the same as a 2.5% fee on buying and selling. But I digress....

It's going to be interesting to see what happens to XPY prices over the next few days. Will we hit $20 again in the near future, or will we maybe sit in the $10-$15 range for a while? I couldn't really say. What will perhaps change things is the first PayBase Premier perk that Josh has announced: one week of staking at the full Prime Controller stake rate (which should be similar to the staking rate of HashStaker I'd assume). In order to get a Premier account, you need to be invited... or perhaps even pay for it. Well, I'd happily pay 5 XPY for a one year Premier account if Josh wants to make that offer. That's similar to the yearly Amazon Prime membership, right? And to get a Premier account, you pretty much need to not dump a bunch of XPY on the market, so I'm qualified!

Here's my prediction for what's going to happen -- and I've been wrong plenty, so don't bet the farm on this. I expect PayCoin may touch $20 on occasion during the next month, but until all of the additional PayBase features are running (like debit cards, PaySave, and Bill Pay) it's not going to stay above $20. Medium term, XPY will likely break $20 and stay above $20 in the next month or two, and long term I think there's a very real chance XPY could hit triple digits before the end of 2015. So think about that before you dump your XPY: if you invest $1000 at the current market price, it could be worth eight times as much before next Christmas.

I'll probably sell some of my XPY at $20, but I'm still very optimistic and I'm looking for that bigger payout. If I could pay bills with XPY, it becomes a lot more useful, and people will start to take notice. Once people can send a car or house payment to their bank via XPY, well, even $100 per coin might be too low. In other words, keep your eye on the real prize. If you have to sell to pay bills and such, fine, but don't end up kicking yourself for being too shortsighted in a few years. Have I mentioned I sold at least 400 BTC when the price was under $5 back in late 2011? Imagine if I had kept just half of those coins! I don't intend to make that same mistake again.