Initiative Q: The Next Bitcoin or the Next Scam?
Disrupting Traditional Currencies
Harry Isenstein Newcastle 25/02/19
Entrepreneurs Society, Newcastle University
Last month, Initiative Q hit headlines after its launch by Israeli entrepreneur Saar Wilf as an attempt to create a new payment network and digital currency. With all the discussion of innovative currencies in recent years, what’s different about this one?
Initiative Q is another attempt to disrupt todays payment systems (e.g. cash) by replacing them with digital currencies and hoping enough people sign up to disrupt the current system being used. Using just your email and your name you can sign up and reserve a ‘Q’, which currently sits at a ‘future value’ of $17, 584. You reserve 10% of this after registration, 40% after referring 5 friends and the rest for ‘future tasks’, which will include downloading their app.
So, what’s the catch?
Like Bitcoin itself, Initiative Q will always be pursuing its ‘tipping point’, which is the point where buyers and sellers are happy to exchange the currency during transactions. Until then, any value it claims to have is prospective, and it runs the risk of not taking off at all. It could find itself in the trap that Bitcoin finds itself in currently, where people are holding it as an asset as its future value rises, rather than trading it daily.
There are many claims it is a glorified pyramid scheme, but as a pyramid scheme requires a ‘buy-in’ with actual money, Initiative Q differentiates itself here.
How’s it Different to Bitcoin?
The hype around Bitcoin often focuses on the way it will disrupt the current system as it doesn’t rely on government intervention, whereas Initiative Q believes that by accepting legal controls placed upon it that its wide scale adoption will be sped up as people will trust it more and governments will prioritise it over currencies that refuse to co-operate.
Wide scale adoption could also come from the fact that it’s free to join and doesn’t rely on the restrictive joining process that Bitcoin demands where few are able to ‘mine’ them due to the cost of the supercomputers needed to perform the rigorous tasks.
However, even though it’s a digital currency its not blockchain based, meaning it is totally centralized posing as a payment network within a smartphone network. Founder Saar Wilf (who sold a fraud detection system to PayPal) believes that by establishing ‘patterns of appropriate and inappropriate behaviour’ Initiative Q will detect fraud more efficiently. However, without de-centralized currency, they still know your transactions, which is essentially how banks and credit cards operate now.
Most of the discussion you’ll find online is against Initiative Q but that’s usually due to the fact its promise seems too good to be true, meaning it is perceived as a scam. However, without any money switching hands so far, it’s hard to argue this. Other criticisms state that no new technology is being used, as promises of things Q will build have already been implemented by Apple Pay or smartcard systems. However, Q isn’t selling itself as massively innovative, instead it innovates through the new process it will use if successful.
For now, it could be worth signing up just to see how it plays out in the future, with Q hoping to be up and running by 2021. Whatever happens, it’ll be interesting to observe how it handles the integration of legal controls from the government, as well as how it continues to fight off criticism in the future from competitors and commentators.
Other Viewers have also read: