#TechCheck Initiative Q: Latest Scam or Genuine Currency of the Future?
Unless you have been living under the rock recently you would have seen atleast one of your Facebook friends sharing an invite to Initiative Q. They would have called it the currency of the future and asked you to sign up ASAP to get a free “money”. In just four months, the self-proclaimed ‘payment system of the future’, Initiative Q has built a network of nearly three million adopters by offering ever-decreasing sums of their future currency in exchange for an e-mail address.
What is Initiative Q?
Initiative Q uses multiple level marketing techniques to get more people to sign up for their website, and in turn, invite others. Each invitee gets a decreasing sum of “Q” allotted to them.
Q is a currency which the company believes will be the currency of the future. You get more “Q” tokens by joining early and all you have to do is give up your email address, and your friends’ email addresses, and promote Q on social media. Do note that that currently “Q” has 0 (zero) value.
If it has 0 value, why are so many people signing up?
Initiative Q founder, Saar Wilf had stated to Fobes that Initiative Q was not a “get rich quick” thing. And neither were they simply handing out free money as it might seem. Before we understand how Initiative Q plans to work, we need to realize that paper money has only a perceived value and no real value. Paper currency works as it is traded against gold or oil and people believe and trust in the value system. So for a new currency to be created it is important that first trust is generated in the medium of currency, which is called “Q” in this case. What Initiative Q plans to do as per to own website timeline, is gather atleast “10s of millions of registrations” by mid-2019 following which they will test existing payment methods and launch tests, and create a monetary committee. It will only be around mid to late 2021 when they would be able to raise 100 million USD as capital to start trading Q against.
Do note that this means that your “Q” riches would be worthless till atleast late 2021 or even further.
Legality of Initiative Q?
Short answer, is the business model of Initiative Q illegal? No. It is not essentially a pyramid scheme in the sense it doesn’t pay early adopters through the money received from late adopters.
Is Initiative Q a crypto-currency? Not at its current state. For the simple reason, “Q” doesn’t exist. Essentially a cryptocurrency is a digital or virtual currency that uses cryptography for security. A currency normally is traded against something and has a value, even if the value fluctuates based on demand and supply of the currency (which is due to international trade). In this case, “Q” has no value, and as per the companies timelines, will essentially, have no value till late 2021 at least.
It is important to point out here that the RBI had in 2018 notified that Bitcoin and other cryptocurrencies shall not be considered a legal tender in India and banks could not trade with them. While Cryptocurrency exchanges had appealed to the Supreme court against the notification of RBI, the apex court had refused to stay the notification. As such, even though it’s not illegal per se to hold cryptocurrency in India, it has no legal value in our jurisdiction, till the Parliment decides otherwise.
Red Flag: Initiative Q has its signees share a standard post on social media to invite others;
“Initiative Q is an attempt by ex-PayPal guys to create a new payment system instead of credit cards that were designed in the 1950s. The system uses its own currency, the Q, and 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 – so better to join early). Signing up is free and they only ask for your name and an email address. 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.”
The biggest problem with this is that the first line is either misleading or a complete lie, depending on how you look at it. As per the “About” of Initiative Q’s own website, the founders had started a payment security space, which was brought by PayPal. The Founder of Initiative Q was not associated with PayPal ever nor is PayPal behind IQ in any way. This usage of the wording in the message can be considered as a fraud against potential unsuspecting signees.
What do experts think about Initiative Q?
The opinion about sceptics is fairly the same. As Initiative Q looks like a pyramid scheme, offers free money for merely spreading its outreach, and is extremely vague, experts at Bitcoinexchange Guide, Cryptobriefing, and DigitalSpy are advising its readers to err on the side of caution, but are stopping short of calling it a direct scam.
In the opinion of David Gerard, a technology journalist and crypto-expert, “as far as I can tell, they’re completely sincere! It’s just their ideas that are bad or don’t actually exist yet.”
Keeping in mind that you would be sharing your email id, it is recommended that you create an alternate email id which is not linked to any of your personal accounts or resources, and same the same for registration purposes at Initiative Q. We do not see any major red flags at IQ, apart from the one already pointed out above, but it’s always better to be safe, rather than sorry.