Initiative Q: Scam, pyramid scheme, or next PayPal?
In the last few days the social networks have been pushing something called Initiative Q, “launched by ex-PayPal guys to create a new payment system instead of credit cards that were designed in the 1950s.”
Q wants to “integrate the best technological improvements that have been made in the payment industry over the last few decades to create a flexible, easy-to-use and inexpensive payment network.” The Q payment system will use its own currency, the Q.
To get people to start using the system once it’s ready, they are allocating Qs for free to people that sign up now. The amount drops as more people join.
Why should you want to bother? The Q team say:
“There’s nothing to lose but if this payment system becomes a world leading payment method your Qs can be worth a lot. If you missed getting bitcoin seven years ago, you wouldn’t want to miss this.”
You can join Initiative Q only by invitation, but there are plenty of invitations around. Once you are in the system, the person who invited you must confirm you, and then you’ll have five invitations to give. I accepted an invitation received by a Facebook friend, and after confirmation I sent my own invitations.
The front page of the Q website gives an “estimated future value of next spot,” which is currently more than $50,000 for those who invite and confirm other five persons, and assuming parity between Q and USD, which is a design goal. The estimated future value when I joined was higher, so hurry up if you want to jump on board.
Some comments on the social network quickly dismiss Q as a scam, perhaps because the first venture of Q founder Saar Wilf, eventually bought by PayPal, was called “ Fraud Sciences.” My own first impression was that Q is some kind of multi-level pyramid scheme. This must be a common first impression, because it’s answered in the Q FAQ:
“Pyramid schemes collect money from new members and distribute it to earlier members. In contrast, joining initiative Q is completely free. So, clearly, there is no money to hand up the ‘pyramid’ to earlier members.”
The same FAQ makes it clear that Initiative Q has nothing to do with cryptocurrencies. In fact, privacy and decentralization, two key drivers of the cryptocurrency movement, are dismissed by the Q team as useless or worse.
“Initiative Q is designed to succeed as a mainstream payment network, which means fully complying with all laws and regulations… Initiative Q’s main goal is to achieve global adoption, and Initiative Q therefore prioritizes ease of use, stability, security, efficiency, and legality, over abstract goals like decentralization. This is a real world solution for real world problems.”
In case the attitude of the Q team toward cryptocurrencies isn’t clear, they say that one of the reasons you should join the Q network is:
“You will help reduce the enormous waste and pollution caused by Bitcoin and cryptocurrencies, currently consuming as much energy as 6,000,000 households!”
The hordes of cryptocurrency enthusiasts might be tempted to retaliate by dismissing Initiative Q as a joke or a scam. But perhaps there’s more to Q than meets the eye.
FT Alphaville, a daily news and commentary service for financial market professionals operated by The Financial Times, notes that Initiative Q’s economic and monetary models were developed by Lawrence White, a well-known economics professor at George Mason University who favors the idea of free banking. Perhaps it’s the involvement of White that has pushed Q above critical mass:
“Alphaville has been contacted by a handful of people in the past 72 hours — all of them young(ish) men — about the project, and the Twittersphere is abuzz with Q chat.”
While the FT article is essentially negative, it quotes an email received by Wilf:
“Clumping [Q] with the cryptocurrency nonsense completely misses the point — we’re doing something way more interesting. It’s a way for the world to come together and solve economical problems that impact every person on the planet, which until now were unsolvable due to financial structures created centuries ago.”
“[The] ultimate question on many people’s lips is: is Initiative Q real or fake? Short answer — we have absolutely no idea.”
The only detailed analysis of Q is available so far comes from David Gerard, the author of “Attack of the 50 Foot Blockchain” (2017), who first covered Initiative Q in June. His conclusion:
“It’s not impossible they’ll get something up … but pure ideas are near-worthless. The hard part is always execution.”
Gerard’s recent update is more skeptical:
“I think the chances are almost zero that you will get anything worth anything from signing up. You might get targeted by future spammers, though.”
I tend to skepticism, but I have joined and invited others. Non-crypto payment systems DO need plenty of improvements, and PayPal is becoming more mainstream than central banks and more annoying than ever. So, best wishes to Q, and perhaps one day I’ll be able to sell my Qs for a lot of money. You never know.
Picture from pxhere.
