Business News

Initiative Q is not the new Bitcoin, but here’s why the idea has value

  • Written by Brendan Markey-Towler, Researcher, The University of Queensland

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

Initiative Q[1], 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[2].

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[3] – 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.

Initiative Q is not the new Bitcoin, but here’s why the idea has value You might think of it as Bitcoin, but know it is not like Bitcoin in most important respects. initiativeq.com[4]

Yet Initiative Q also states it is not developing a cryptocurrency[5].

The basic definition of a cryptocurrency[6] 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[7] to manage and secure the virtual ledger that records transactions.

Bitcoin, for instance, uses blockchain technology to “distribute”[8] the virtual ledger across a network and “decentralise”[9] 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.

Read more: Bitcoin turns ten – here's how it all started and what the future might hold[10]

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[11], because it cuts against the cryptoanarchist[12] 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[13] 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[14]”.

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[15]” trend in mind.

Read more: Four factors driving the price of Bitcoin[16]

Lawrence White[17], 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[18], which says the money supply should be controlled to keep prices stable.

So the value of “Q” will not fluctuate wildly like many cryptocurrencies[19].

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[20] call cryptocurrencies “institutional technologies[21]”. 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.

Read more: Rise of cryptocurrencies like bitcoin begs question: what is money?[22]

For example, Bitcoin’s creator, Satoshi Nakamoto[23], 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[24]”.

From this perspective, what is interesting about Initiative Q[25] is that it creates a novel blend of institutions[26] 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”[27]. But like any payments system, it faces “network externalities[28]”. 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.


  1. ^ Initiative Q (initiativeq.com)
  2. ^ legitimacy (www.news.com.au)
  3. ^ institutional cryptoeconomics (www.coindesk.com)
  4. ^ initiativeq.com (initiativeq.com)
  5. ^ it is not developing a cryptocurrency (initiativeq.com)
  6. ^ cryptocurrency (cointelegraph.com)
  7. ^ using a decentralised system (www.merriam-webster.com)
  8. ^ “distribute” (www.coindesk.com)
  9. ^ “decentralise” (medium.com)
  10. ^ Bitcoin turns ten – here's how it all started and what the future might hold (theconversation.com)
  11. ^ uncomfortable (medium.com)
  12. ^ cryptoanarchist (www.activism.net)
  13. ^ environmental cost (theconversation.com)
  14. ^ hard fork (cointelegraph.com)
  15. ^ stablecoin (www.afr.com)
  16. ^ Four factors driving the price of Bitcoin (theconversation.com)
  17. ^ Lawrence White (economics.gmu.edu)
  18. ^ monetarist theory (www.investopedia.com)
  19. ^ like many cryptocurrencies (theconversation.com)
  20. ^ RMIT Blockchain Innovation Hub (sites.rmit.edu.au)
  21. ^ institutional technologies (www.cambridge.org)
  22. ^ Rise of cryptocurrencies like bitcoin begs question: what is money? (theconversation.com)
  23. ^ Satoshi Nakamoto (bitcoin.org)
  24. ^ institutional discovery (papers.ssrn.com)
  25. ^ Initiative Q (initiativeq.com)
  26. ^ novel blend of institutions (initiativeq.com)
  27. ^ “pyramid scheme” (davidgerard.co.uk)
  28. ^ network externalities (www.investopedia.com)

Authors: Brendan Markey-Towler, Researcher, The University of Queensland

Read more http://theconversation.com/initiative-q-is-not-the-new-bitcoin-but-heres-why-the-idea-has-value-106148

Business Daily Media Business Development

Food you need to try in Beijing

Beijing is a beautiful and interesting destination for any kind of traveler. However, foodies will find a new heaven and will be able to try out tasty, flavorful and sometimes very special...

News Company - avatar News Company

4 Best Budget-Friendly Attractions in Las Vegas

Perhaps no other city in the world deserves the moniker “Sin City” more than Las Vegas. This city has been illustrated in countless works of art as the place where dreams are made, lives a...

News Company - avatar News Company

Bahrain Property Show 2018: How does it reflect the real estate market development in Bahrain

It is no secret that the Arabian Peninsula and the Gulf Cooperation Council (GCC) countries are currently going through a lot of pivotal changes. Such changes do not include economic or po...

News Company - avatar News Company

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The black-tie Gala Dinner s...

Helen Hull - avatar Helen Hull

Five Reasons Melbourne Rules

If you are traveling in Australia and have left Melbourne off your destination list, then you are going to want to reconsider. Many people consider Melbourne to the best city in the world...

News Feature Team - avatar News Feature Team

Making Friends During Your Campsite Stay

Part of the excitement of vacation is meeting people who you would never otherwise encounter. Staying at a campsite isn’t just about taking in nature. It’s also about sharing the beauty of n...

News Feature Team - avatar News Feature Team

Business Daily Media Business Reports

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The bla...

Helen Hull - avatar Helen Hull

Eclipse Travel Expands Operations to New Zealand

Eclipse Travel, specialists in key adventure destinations such as Antarctica, the Arctic, Africa and Latin America, have announced today their expansion of operations to ...

Yvonne Kong - avatar Yvonne Kong

How medical professionals can benefit from an overall wealth management solution

As a health care professional, you have made it your life's work to focus on the care and health of the general public. While this kind of work can be extremely rewarding...

News Feature Team - avatar News Feature Team

Why Pinterest Should Be Part of Your Marketing Strategy

Pinterest is a growing social media platform that can deliver significant traffic to your website and new followers to your brand. With it’s steady growth and outrageous ...

Greg Nunan - avatar Greg Nunan

The top reasons why gyms fail

Steve Grant is a Business Coach and Founder of GymHub.com.au   Every month thousands of new trainers walk out of their 6-month course with the qualifications needed ...

Steve Grant - avatar Steve Grant

WHITE LABEL NOBA’s Winter 2016 season: Earth + Country

Taking cues from the warm winter colours of tobacco and caramel, and combining them with the strength of navy and the embracing lightness of whites and creams; and then...

Kath Rose - avatar Kath Rose

Former Etihad boss brings substantial event insight to PMY Group Board

Paul Sergeant PMY Group, the architects of the digital insurgency occurring at major venues across Australia and New Zealand, are delighted to welcome 35 year even...

Annie Konieczny - avatar Annie Konieczny

More training for coffee making than property sales: REINSW

Sydney 9 May 2016. An overhaul of education and training standards for the real estate profession must take place to help prevent illegal activities, according to the Rea...

Helen Hull - avatar Helen Hull