Skip to main content
Move the World.
"Q" Probably Won't Make You Rich, but It's an Experiment Worth Watching
The future according to Initiative Q. Credit: Initiative Q

Could free units of a new digital currency end up being worth thousands of dollars?

Initiative Q, which is aggressively marketing itself on social media, wants you to think so. It urges you to sign up now, and get your friends to do so as well, to maximise the value of your free “Q” currency. This has invited comparisons to pyramid schemes and suspicions about its legitimacy.

It’s not a scam. It also won’t make you fabulously wealthy. It is, nonetheless, an interesting idea.

I want to use institutional cryptoeconomics – the study of the basic rules governing emerging economic systems such as cryptocurrencies – to show you how Initiative Q is an interesting experiment, criticisms of its marketing methods aside. If you sign up, you might help the world discover a remarkable new payments system.

Cryptocurrency basics

Initiative Q’s marketing explicitly draws comparisons with the best-known cryptocurrency: “Think of it as Bitcoin seven years ago.” The implication is this is the next Big Thing in internet money.

Yet Initiative Q also states it is not developing a cryptocurrency.

The basic definition of a cryptocurrency is simply any form of digital money consisting of entries in a cryptographically secure virtual ledger, rather than physical coins and notes. In this sense “Q” can be thought of as a cryptocurrency.

However, cryptocurrency is increasingly defined further as using a decentralised system to manage and secure the virtual ledger that records transactions.

Bitcoin, for instance, uses blockchain technology to “distribute” the virtual ledger across a network and “decentralise” the process of coming to agreement on how to update it.

Blockchain protects a cryptocurrency from manipulation by hackers or governments, but it comes with costs.

What makes Q different

Initiative Q is not like Bitcoin in most technical respects.

It will not use blockchain but control the “true” ledger centrally. This makes blockchain enthusiasts uncomfortable, because it cuts against the cryptoanarchist aversion to any one group holding power over a system. But it will avoid some costs of Bitcoin and similar cryptocurrencies.

One is the feared environmental cost of energy-intensive “proof of work” algorithms that prove to the whole network a blockchain is compiled correctly.

“Q” will avoid that by the company deciding what is the “true” ledger. That also allows the company to counter fraud and resolve disputes by “reversing” transactions, where blockchains can typically only do this with an intensely difficult “hard fork”.

By design the Q won’t fluctuate wildly in value, either. The goal is a stable private currency for payments processing rather than a vehicle for speculation. It is clearly designed with the current “stablecoin” trend in mind.

Lawrence White, who helped design “Q”, is known for advocating systems where money does not fluctuate wildly in value. He has clearly built Initiative Q around monetarist theory, which says the money supply should be controlled to keep prices stable.

So the value of “Q” will not fluctuate wildly like many cryptocurrencies.

All of this makes Initiative Q unlike Bitcoin, although it creates a private digital currency.

Experiements in institutional technologies

My colleagues at RMIT Blockchain Innovation Hub call cryptocurrencies “institutional technologies”. Anyone who wants to use the system has to act within the institutions it creates - that is, obey its fundamental rules.

These systems can be privatised. Any private citizen with a laptop can write a protocol that administers large-scale institutional systems like money, which historically only the centralised state could enforce.

For example, Bitcoin’s creator, Satoshi Nakamoto, is said to have belted out the source code for the cryptocurrency on a laptop at home during spare time. Now millions of people around the world use the system to interact every day.

What’s exciting is that this allows people to invent all sorts of different institutional systems to see which ones work best – feeding a process my colleagues have called “institutional discovery”.

From this perspective, what is interesting about Initiative Q is that it creates a novel blend of institutions oriented around streamlined payments processing. It is supposed to take all the good things about PayPal and improve on them.

Not the new Bitcoin, but still interesting

One can understand why Initiative Q’s marketing strategy has caused it to be dismissed as a “pyramid scheme”. But like any payments system, it faces “network externalities”. It needs lots of people to use it. The more people do, the more value it has.

If it does succeed, though, it won’t make you fabulously wealthy. You’ll get something more like a gift card. The value of “Q” is designed to be stable, so you shouldn’t be expecting to become a crypto-billionaire.

If you do sign up, you might at least enrich the field of institutional cryptoeconomics. Experiments like this are how we improve our institutions, through a process much like scientific discovery.The Conversation

Brendan Markey-Towler is a researcher at the School of Economics at The University of Queensland. This piece was originally published on The Conversation.

Up Next

Animals
Scientists Use 40-Year-Old DNA to Clone Endangered Horse
genetic diversity cloned horse
Animals
Scientists Use 40-Year-Old DNA to Clone Endangered Horse
The first cloned Przewalski’s horse could inject the critically endangered species with a much-need dose of genetic diversity.

The first cloned Przewalski’s horse could inject the critically endangered species with a much-need dose of genetic diversity.

CRISPR
Scientists Use CRISPR to Reverse Diabetes in Mice
reverse diabetes
CRISPR
Scientists Use CRISPR to Reverse Diabetes in Mice
Scientists have used CRISPR to correct a diabetes-causing mutation in stem cells and then use those cells to reverse diabetes in mice.

Scientists have used CRISPR to correct a diabetes-causing mutation in stem cells and then use those cells to reverse diabetes in mice.

Criminal Justice
Algorithm Clears Thousands of Marijuana Convictions in Just One Minute
criminal record clearance
Criminal Justice
Algorithm Clears Thousands of Marijuana Convictions in Just One Minute
With this new system that identifies candidates for criminal record clearance and even auto-fills forms, offenders don’t even need to apply.

With this new system that identifies candidates for criminal record clearance and even auto-fills forms, offenders don’t even need to apply.

Cybersecurity
We’re One Step Closer to a Super-Secure Quantum Internet
We’re One Step Closer to a Super-Secure Quantum Internet
Cybersecurity
We’re One Step Closer to a Super-Secure Quantum Internet
Scientists have successfully entangled photons across a 52-mile-long quantum loop in Chicago, a major milestone along the path to a quantum Internet.

Scientists have successfully entangled photons across a 52-mile-long quantum loop in Chicago, a major milestone along the path to a quantum Internet.

Seachange
The Fight to End Illegal Logging
illegal logging
Seachange
The Fight to End Illegal Logging
Citizen scientists are collecting tree samples to build a genetic database that will help identify the origins of stolen lumber and stop illegal logging.

Citizen scientists are collecting tree samples to build a genetic database that will help identify the origins of stolen lumber and stop illegal logging.

Superhuman
Advanced Prosthetics Are Not Only Powerful, They’re Beautiful
Advanced Prosthetics Are Not Only Powerful, They’re Beautiful
Superhuman
Advanced Prosthetics Are Not Only Powerful, They’re Beautiful
"There's a deep, deep relationship between the functionality of the device and a person's identity of what their body is."

Before he was director of the Human Engineering Research Laboratories, Rory Cooper was customizing his own wheelchairs for racing. His racer was lighter than traditional chairs, optimized for racing on the road, but many of its modifications have since become commonplace in wheelchairs designed for everyday use. Cooper's chair demonstrated the importance of performance and functionality, ensuring that the user's quality of...

Superhuman
The Exoskeleton Marathon Racer
The Exoskeleton Marathon Racer
Watch Now
Superhuman
The Exoskeleton Marathon Racer
How do you bounce back from a life-changing car accident? Adam Gorlitsky decided he would break a world record.
Watch Now

How do you bounce back from a life-changing car accident? Adam Gorlitsky decided he would break a world record. In a weird way, it’s a good time to be paralyzed Adam Gorlitsky Adam was paralyzed from the waist down in a terrible wreck and thought his track and field days were over. But once approved for an experimental exoskeleton, he...

Dispatches
What's the Deal with the Giant Mosquitoes after Hurricanes?
What's the Deal with the Giant Mosquitoes after Hurricanes?
Dispatches
What's the Deal with the Giant Mosquitoes after Hurricanes?
These suckers grow to be three times larger than other mosquitoes, but they may not be as bad as you think.
By Michael Reiskind

These suckers grow to be three times larger than other mosquitoes, but they may not be as bad as you think.

Why Advanced Cancer Patients Need Genetic Sequencing
Why Advanced Cancer Patients Need Genetic Sequencing
Watch Now
Why Advanced Cancer Patients Need Genetic Sequencing
Genomic sequencing saved his life. Now he wants everyone to have access.
Watch Now

After he was diagnosed with life-threatening prostate cancer, Intel’s Bryce Olson sequenced his genome which offered clues to new treatments for his disease. While the current standard of care for cancer patients includes surgery, radiation, and chemotherapy, genetic sequencing opens the door for new possibilities beyond these traditional approaches. Bryce explains his personal mission to encourage others to get their...