The most anticipated part of the North American Bitcoin Conference in Miami was supposed to be a Q&A with Josh Garza, the embattled chief executive officer of GAW. He was going to simultaneously defend Paycoin, an imploding bitcoin-like currency he launched in December from a horde of angry investors and detractors, and celebrate it with his legion of true believers.

On January 15, the day before the three-day conference, organizers announced Garza’s appearance had been canceled. Garza said it was a misunderstanding – it was only that the talk's original time and place was cancelled while the bitcoin conference looked for a more appropriate venue. But even though he was widely seen at conference events, it ended without Garza taking the stage.

As of Monday, Paycoin is the fourth largest of the so-called cryptocurrencies. But it's slipping fast. Last week it held the No. 3 spot. Today, the combined value of the 12 million Paycoin is nearly $35 million, down $10 million since the conference.

In the world of bitcoin and its alternatives, Garza has emerged as one of the most polarizing figures. On Hashtalk, GAW's official public forum, he's considered the savior of cryptocurrency. On Reddit and Bitcointalk, his skeptics have been calling him a con man for the better part of a year, ever since he first established a bitcoin mining operation. GAW's businesses have been accused on all three forums of Ponzi schemes, fraud, securities violations and censoring critics. Paycoin has been mired with unmet expectations.

“There's this witch hunt,” said Garza in a Passcode interview in advance of the Miami conference. “You're automatically guilty unless you prove you’re not.”

Amid a trail of controversies, even many of his faithful want to know: Is Garza a huckster, a hero being martyred by bad publicity, or simply a well-intentioned businessman in over his head? And for many of the people who have invested in Paycoin, they just want to know what's happening to their money.

The first GAW

In 2006, Garza was a main attraction at a campaign rally for then-congressional-candidate Peter Welch. Mr. Welch held up Garza as a prototypical Vermont business owner he would nurture to put the state "at the front of an emerging world economy [with] well-paying jobs today and tomorrow.”

Garza was 21. His two companies, Optima Technology and Great Auk Wireless, already had 20 employees. He was only in high school when he started the computer repair company Optima out of his bedroom.

“Senior year I really struggled with ADD, going to the specially tailored classes but couldn't pay attention. So I struggled a lot grade-wise,” said Garza. “So I said, ‘Hey, I should go start a business.' "

Optima quickly outgrew Garza’s home. “We had just enough money for first months and last rent for an office,” he said. “We were so convinced we were going to make money we bought a safe that was worth more than we’d ever put in it.

Garza leveraged Optima's success to start Great Auk Wireless (the original GAW), a wireless broadband provider for underserved rural areas. It was his start of a career as a serial entrepreneur.

Years later, detractors would use one of the original GAW’s biggest scrapes to discredit the second GAW, though it was a textbook example of why major providers avoided rural services. GAW was offered a $40,000 grant to serve Ashfield, Massachusetts, but the city went years without access before Garza gave up in 2012, unable to find a tower location. He never completed the job.

Garza's roots in cryptocurrency

Bitcoin is the most prominent cryptocurrency, but it’s far from the only one. There are coins that donate transaction fees to charity, coins based on Internet memes including Doge and a coin that honors Juggalos, the clown-make-up-wearing fans of the Insane Clown Posse. There are successes, scams, and everything in between.

Though they are called currency, coins are more like bartered commodities, establishing market value through how difficult they are for speculators to harvest. Many cryptocurrencies are “mined,” awarded for solving complicated math problems requiring specialized computers. The value of those coins are set by the cost of the facilities to mine them.

Enter Garza’s GAW Miners.

GAW, now standing for “Geniuses at Work,” is pronounced like “GAWsome,” slang the company regularly uses since it opened in February. In that short time, GAW has been a mining hardware vendor, a hardware host, a cloud-based mining service, a simulated mining service, a digital wallet, and a currency. Garza moves at breakneck speed. He had only been interested in Bitcoin for a couple of months when he opened shop.

Garza’s initial plan was to mine Bitcoin for himself. But everything changed when he paid for equipment that a vendor never sent.

“It wasn't even the financial loss that got to me,” Garza told Passcode. “It was knowing that these guys had no idea whether or not I could have afforded it. I could have been someone that had a billion dollars just as easily as someone who had cashed out every bit of their life savings to make that purchase and these guys didn't care one way or the other.“

Fly-by-night mining companies cheating customers is common. Cryptocurrency is the Wild West. Just this October, the Federal Trade Commission shuttered Butterfly Labs for providing obsolete equipment.

Garza sat down and made a list of companies known for scamming customers. He had decided to run them all out of business.

The second GAW

If GAW wanted to be an honest vendor in a sea of corruption, they were by many accounts pretty good at it. But by March, GAW changed business plans, the first of many times. Cryptocurrency mining gets harder over time so ever-improving hardware doesn’t inadvertently flood the market. The week it took mining hardware to ship would mathematically be customers’ most lucrative week. Now GAW would host miners they sold for free, eliminating shipping entirely.

“I think we did $50,000 our first day,” Garza says. It was an immediate success.

It was here that Scott Booth got involved with Garza, first as a client and then as a friend. Mr. Booth runs the Nevada-based embedded-systems company SGB Enterprises. “I saw a little of myself in him,” Booth said.

Booth became part of Garza’s inner circle. But the relationship soon began to sour when Garza again shifted the company’s focus. This time, GAW stopped selling hardware. Instead it would sell “Hashlets,” increments of processing power on a cloud-based mining network. “I explained, in a nutshell, that he needed to stick to a business plan,” said Booth. “Every three or four weeks, there seemed like a new concept he wanted to pursue.”

Booth thought Hashlets’ initial price was exploitative, yet it kept rising.

Like many of Garza's critics, Booth claims that he was banned from public comment on the forums. GAW has a reputation among its detractors for filtering Hashtalk of any negative comment and scrubbing Garza’s posts whenever new circumstances contradict them. They keep an image archive of what they claim to be Garza’s deleted posts.

As GAW amassed Hashlet sales, customers noticed something strange. Cryptocurrency mining is too complex for a single computer; users join massive, profit-splitting computing pools to up their processing power. But while GAW let users pick pools to join and paid users based on those pools' successes, the pools themselves didn’t see any increase in traffic. GAW sold too much processing power for that to be possible.

Customers began wondering if GAW was a Ponzi scheme. “There was no solid evidence, but there were a lot of hints and red flags,” said Grant Honeycutt, a Washington financial services provider who purchased Hashlets in August and now tries to “rescue” current investors.

Garza said there was nothing nefarious. As clients rolled in, he said, GAW’s processing power became too large to mine small coins without damaging market scarcity. He risked “blow[ing] them up.”

Instead, Garza used the computers to make money independently of clients’ choices, but paid clients based on their chosen pools.

Forum posts make clear, however, that many customers claimed they were not aware Hashlets were not actually miners.

“Actually, we let the customers know that a lot,” Garza said, in response to those complaints. “In some cases we might not have been as clear. In some cases we might not have let them know more than one time.”

Buried within the terms of service is the line: “Selecting a Pool does not imply … mining at the selected Pool.”

Where GAW made the money it distributed is still a controversy.

Garza says it came from mining Bitcoin in a private pool. This is a crucial point. If any distributed funds did not come from mining, his critics point out that selling Hashlets would be in part dangerously similar to selling securities in GAW. And since GAW never registered with the Securities and Exchange Commision, it could be prosecuted for possible civil and criminal violations of securities laws. A purported screen capture of a since-deleted Hashtalk post widely distributed on forums criticizing GAW shows Garza admitting payouts came from renting out mining hardware.

Booth has led a charge to see Garza punished for this and other violations, publicly reporting GAW to agencies including the SEC.

Birth of a new currency

As mining became less profitable, Garza introduced another service: loyalty points customers could exchange for an upcoming GAW cryptocurrency, eventually titled Paycoin.

Garza points out he was under no obligation to even offer the points. Other mining services simply allowed their customers’ investments to collapse.

Paycoin came with a series of promises worded ambiguously enough to seem implausibly profitable. Intentional or not, the ambiguity came back to bite investors – and Garza, too.

Garza promised "top tier" retail partnerships and the ability to use Paycoin at Amazon, Target, and Walmart. Users took this to mean they could use Paycoin directly on Amazon, Target, and Walmart websites. Instead, Garza says, he meant purchases could be made through GAW’s digital wallet service or Paycoin debit cards – a far less impressive promise to people looking to establish Paycoin's legitimacy. He admits he should have corrected misconceptions sooner.

“There have been times where what we've said has rolled forward in a game of telephone,” says Garza.

So it would have been no surprise to Garza that those retailers denied a partnership when the cryptocurrency news site Coin Fire asked. Coin Fire’s article concluded noting GAW declined to comment. GAW threatened to sue Coin Fire, claiming they were never contacted by the reporter.

Coin Fire provided Passcode with evidence they had contacted GAW through its website. Editor Mike Johnson says they have more than a terabyte of evidence to back his story’s claims, including emails to several GAW representatives.

Garza wouldn’t comment on a legal matter. He did, however, say cryptocurrency supporters should consider “whether or not their actions are helping move this industry forward or backward.”

This wasn't GAW's first, or last run in with Coinfire. Coinfire broke the story that Hashlets weren't mining ("We didn't set out to slam them," said Johnson. "They were advertisers.") Last week, Coin Fire reported a SEC investigation was underway. The SEC would not confirm or deny a current investigation.

Despite the "partnership" hiccup, Garza still promises integration with merchants.

“We have tons and tons of merchants a day calling, trying to incorporate Paycoin – more than 100 already have,” he said, unwilling to answer who these might be. “I’ve gotten in trouble bringing names up before.”

Until Coin Fire published its report of the alleged SEC investigation, Hashtalk users took no stock in the site. Those on the forum have a common phrase to describe the sentiment from critics such as Johnson: FUD – fear, uncertainty and doubt. But after the report – and a subsequent dip in Paycoin's value – it's been harder to ignore Coin Fire's reporting.

And the decline of Paycoin

Garza claimed Paycoin would be worth $20 and GAW had capital set to "shift the market” and maintain that value. But the December launch thudded. One Paycoin currently sells for under $3.

Twenty dollars was a prediction, said Garza, not a promise, based on “reasonable” assumptions. Still, he never corrected users' expectations that GAW would enforce a price floor of $20.

“There are variables we never saw and we didn’t factor in. The one that matters most is the organized effort to see Paycoin fail,” he said.

That conspiracy would be no small effort: amassing substantial amounts of coins at a rate that didn’t arouse suspicion and precisely coordinating sales to thwart buying momentum.

GAW was unable to contain outrage over the allegedly promised pay floor. In early January, Garza announced a program to buy back at least $100,000 Paycoins a month at $20. Five thousand coins is only $100,000. Processing the 12 million Paycoin could literally take millennia.

For many, it was too little too late. Many more threw in the towel after his role in the Miami conference evaporated.

Cracks in confidence are beginning to show, even on his forum.

Garza posted a lengthy note on Hashtalk trying to rally the troops away from fear, uncertainty and doubt. "We will make this happen. Period. Not through my strength, but ours," he wrote.

But an investor's post in another thread summed up a growing sentiment. “Is it FUD if it's true?”