Initiative Q – Nonsense spreading like a virus

Lately there has been a lot of buzz about Initiative Q in social media. Even people who usually aren't gullible to promote these kind of chain-letter type of schemes have been sharing invite links luring more and more people to do the same.

So what is this initiative of spam all about then?

According to the webpage of Initiative Q the aim of the company/people behind the scheme is to create "the payment system of the future". 

Joining Initiative Q requires an invitation to sign up. You only have to give your name and email address, no payment is required – yet.

People signing up and sharing invite links are rewarded with the future currency. Like the webpage says: "To get millions to join, we are giving away our future currency". As I'm writing this the webpage claims that the estimated future value of next spot would be about 19.000 dollars. And get this: that fat stack of dollars will be yours free of charge! Don't mind that it's just an empty nonsensical promise based on nothing.

Is it worth signing up?

Although there's no money asked (for now), and you'll probably only get your email address contaminated, should you trust the sincerity of this initiative? – I know I wouldn't.

I did not sign up but read through texts and information available on the webpage of Initiative Q. I also made searches online to check whether the company and the people behind the program were real.

Initiative Q is marketed as an attempt by ex-PayPal guys to create a new payment system instead of credit cards. Surprisingly that seems to be somewhat accurate marketing pitch. However, only one man is named on the website, an Israelian Saar Wilf, who in fact has a history with PayPal. According to Saar's LinkedIn profile he was a director at PayPal between 2008 and April 2010. He has also publicly presented himself as the man behind the concept of Initiative Q.

Wilf Saar on the left. Besides being an "ex-PayPal guy" he is also a poker player.

The registrant of the website of Initiative Q is an Israelian company SW Ventures LTD owned by Saar Wilf. There isn't much to be found about the company online. The only thing I managed to find was a patent application dated July 2018 for "system and method for locating and eliminating insects". – I guess it's the future of killing insects as well.

A lot of hype

The webpage is pretty much full of hype about this payment system of the future, boosted with some claims that are in fact ridiculous. There really isn't any explanation how this Q currency would actually work. – Well, at least nothing that would make sense or be reasonable.

Like scams usually do also Initiative Q makes predictions based on nothing and threaten that you would miss a chance of your lifetime by choosing not to sign up.

"It's a self-fulfilling prophecy. Don't miss your chance!" 

– Yeah, that's a direct quote from the site.

The following chapter from the FAQ tries to explain what is the value of Q based on by explaining that there really isn't any base for the value. There's a certain resemblance to OneCoin ponzi scam.

"What is your estimate of the Q value based on?

The reasoning behind the estimated future value of the Q payment network can be summarized as follows: 

1. The payment world is stuck with decades old technologies, since it is very difficult to get buyers to adopt a new technology that sellers don’t yet support and vice versa.
2. Initiative Q solves this problem by compensating early adopters with future currency.
3. This enables the building of a payment network that is far superior to current ones.
4. A payment network that is both superior technologically, and widely adopted, would be preferred by both buyers and sellers.
5. It is realistic to expect that such a network would eventually overtake credit cards, which account for $20 trillion in annual transactions.
6. The total amount of money in the world is roughly half the world’s annual economic activity. The value of all Q currency could thus reach half of Q’s annual volume (i.e. $10 trillion).
7. An alternative data point is the value of cryptocurrencies which peaked at nearly $1 trillion, despite hardly being used for real payments (nearly all activity is speculation).
8. Therefore, the total future value of Qs could reach a few trillion dollars. Since there are currently 2 trillion Qs, the goal of one US dollar per Q is achievable."

As already said, Initiative Q asks no money for signing up. However, the future plans of the company seem to require astonishing piles of cash for the sheer existence of the payment system. 

An independent monetary committee will be chosen via voting by all members and stakeholders in the Q payment network (don't ask me how). The committee has a huge responsibility and also an option to issue new coins for the purpose of maintaining stability, and increasing adoption.

But why would anyone trust that Qs have any value? Well, the answer is to have "large reserves of USD" managed by the monetary committee. According to Initiative Q that huge reserve of dollars will be financed through selling Qs for USD and selling future grants of Q. 

I still don't understand why anyone in their right mind would exchange their dollars to those worthless Qs. There simply is no base for the value before there's a base for the value. Nevertheless, I have a pretty good guess who would be asked to contribute for the greater good to get that reserve of dollars piling up. – Wink, wink, give me your name and email address and I'll tell you.

Signing up is free and you'll be gifted with Qs, but the lunch doesn't seem to be free:

"As an additional means of instilling trust in the long-term purchasing power of Q, the monetary committee will continuously offer to buy Qs in exchange for USD (and other currencies) at the target rate of 1 Q per 1 USD. This will assure sellers they can confidently accept Q as a payment method.

This requires the monetary committee to hold large reserves of USD. The reserve balance will be publically available, assuring members that they can convert to USD at any time, thus supporting Q stability. As Q becomes a global standard, and trust in its long-term value increases, the reserve ratio can decrease. 

These reserves are financed through two sources: 

1. Selling Q for USD — Buyers looking to benefit from the advantages of the Q payment network need to add Qs in their account, which is done by buying them from the monetary committee.
2. Selling future grants of Q — This option is available to accredited investors who believe in the long-term success of Initiative Q. They can purchase (at a significant discount) the right to receive Qs in the future, that will be released according to the network growth — similar to the new members rewards."

Furthermore, it seems evident that Q requires a worldwide heavy organisation to run its business. 

A chapter titled "Reversibility and dispute arbitration" describes how disputes need to be resolved by "trained representatives":

"The Q payment network can also include an automated dispute resolution process, with an easy to use interface that allows users to submit claims and upload evidence to support those claims.

Disputes that cannot be resolved automatically can be assigned to a trained representative, who investigates the claims to determine whether there has been a violation of the Q payment network regulations. If the agent finds that the seller was at fault, then the transaction can be reversed, while in cases where both sides acted appropriately (e.g. an unauthorized charge) the buyer can be reimbursed by Initiative Q. Such reimbursement can be paid from a global insurance pool financed from transaction fees."

Now, wait a minute, doesn't this all resemblance a lot how a credit card company or a bank would work. The only difference is that banks and credit card companies handle valuable assets whereas Initiative Q has nothing but worthless Qs to offer. All I see is future risks and lots of expenses to be covered and a massive capital to be raised.

Conclusion

As long as no money is required there's little to no harm done to the people signing up. However, I guess those email addresses could be stored for a later use to market other shady schemes. A database of email addresses belonging to gullible people could be a valuable asset to any scam. 

Despite being seemingly harmless Initiative Q has many red flags waving already. Although no money is asked for now, I see likely that if the company were to proceed with the concept, it would start asking for money from the participants. 

Personally I wouldn't sign up to this and neither would I recommend Initiative Q to anyone. In poker terms: Initiative Q has dealt the worst hand ever and I would definitely fold it.