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A few years ago, my brother told me about Ethereum and Bitcoin before most people had ever heard of cryptocurrency. He said, “You should really buy some, even if it’s just $1,000.”

Of course, I didn’t buy any cryptocurrency. I thought, What kind of idiot would pay for something that has no intrinsic value and will most likely be worth nothing in a few years?

Needless to say, I missed out.

My brother works as a full stack web developer at Chime Bank, a no/low-fee online bank, so he’s pretty tapped into what’s going on in tech and finance.

So when he recently told me about Initiative Q, I was intrigued. I didn’t want to make the same mistake I did last time he told me about a new technology that would change the future of finance.

Initiative Q Review

In this article, I’m going to provide my personal, biased review of Initiative Q based on my very limited research and understanding of how the company works and the kind of payment system they say they’re working on building.

What is Initiative Q?

Initiative Q is a startup company created by ex-Paypal entrepreneur Saar Wilf and economist Lawrence White.

The company is working to build a new global payment system that will replace outdated credit cards, and outdated financial systems in general. It’s kind of like cryptocurrency, except it’s not. Right now, you can’t buy Q’s, the currency, but you can earn them by inviting your friends to sign up for free to the platform.

If you spend just a few minutes researching the founders of Initiative Q, you’ll probably come away, like me, realizing that they’re obviously pretty smart people, and that they’re probably not con artists given their track records in business and academia.

How to Join Initiative Q

In order to join Initiative Q, you have to be invited by someone and sign up via their referral link. Every new member of the network must be verified and approved by an existing member (who was also verified and approved). This approval process is genius because it helps prevent fraud, bots, and scammers from manipulating the system and overwhelming the network.

How to Earn Qs

You earn Qs when you sign up for Initiative Q if you’re an early adopter. The amount of Qs you earn when you sign up is constantly decreasing as more members sign up.

You can earn more Q’s by inviting friends and verifying them for a limited time.

Is Initiative Q a Scam or Pyramid Scheme?

Based on my personal, limited research, I don’t believe Initiative Q is either a pyramid scheme or a scheme.

Pyramid schemes work when new members must add money to a system and get basically nothing in return except empty promises. Pyramid schemes only continue to work as new members are added.

Although you do get Qs when you sign up or invite friends, Qs are currently worthless, so you are getting paid in “currency” but it’s not actually worth any money yet, and, of course, there’s a good chance Qs will never be worth anything. Or they could become worth as much as $1 (basically, in the perfect world, where Qs take off and become the leading global system for payments).

Because you aren’t paying to join, and you never have to pay to join, Initiative Q isn’t a pyramid scheme, in my own personal opinion.

Disclaimer: I am not an attorney and can’t give legal advice.

As for being a scam, it seems pretty clear to me that the company is serious about solving a major global financial problem, and that the best way to do so is to build a massive userbase quickly. Qs will never be worth anything unless hundreds of millions of people use the network, so they’re faced with a chicken and egg problem. By offering free Qs to early adopters, the company can build a giant userbase before building the payment platform, which will dramatically increase the chances of success for the payment platform itself.

This phenomenon is called the network effect—as the network grows, it becomes more and more valuable, just like with Facebook and fax machines. Fax machines and Facebook would be worthless if you were the only one on the network. They are valuable because billions of people use them, and as the network grows, each user gets more benefit from the network. Initiative Q will work the same way, assuming it works.

The Problem With Credit Cards

The problem with credit cards and the global financial system in general is that the fees are absurdly high. We’re just a small business at TCK Publishing, but we end up losing 10’s of thousands of dollars every year in credit card fees alone.

Merchant fees for processing credit cards generally range from $0.15 to $0.30 per transaction plus  1.51% to 2.75% of the transaction amount. That’s a ridiculous amount of money.

In other words, a small business doing $1 million in revenue will spend $15,000 to $30,000 in bank fees, just from processing credit card transactions, not to mention all the other banking fees. And that’s $15k to $30k per every 1 million in transactions, so the numbers get huge for larger businesses.

In other words, if we eliminated credit card processing fees, businesses would save enough money for every 1 to 2 million dollars in business revenue from credit cards to be able to hire a new employee and create a job.

Given that there is $927 billion in credit card debt currently, the savings for businesses and consumers would be astronomical.

And that’s just credit cards—there are many other areas of banking and finance where banks gauge consumers like you and me, and if Initiative Q or something like it were to actually succeed, it would mean a better quality of life and a better economy for everyone.

Fraud Prevention

Fraud prevention is the #1 most important part of any financial system. If you don’t have tight controls on fraud, a few bad apples will destroy the entire system. Paypal almost failed because of fraud in its early high-growth days, and many other would-be successful payments systems failed or were badly harmed by fraud.

Fraud is incredibly expensive, and we all pay for it. You don’t notice the cost of fraud directly—your credit card company protects you from fraud, usually. So you get their “protection” thanks to high credit card fees, which businesses and sellers pay when they process a credit card transaction from you and other consumers.

That means you end up paying more money for goods and services because businesses have to raise their prices in order to cover the cost of credit card and other transaction and banking fees.

Initiative Q seems to be addressing fraud head-on using some fairly new and innovative approaches. I won’t bore you with the details, but you can read more about how they’re reducing fraud and how the Q payment system will work.

If a global financial system could reduce fraud by just 10%, that would end up making all of us a little bit wealthier, and the numbers are huge (Fraud costs more than $3 Trillion globally every year).

Personally, I believe fraud costs much more than what the research shows because fraud doesn’t just cost money—it costs humans time, emotional pain, lost opportunities, and more. Reducing fraud would unequivocally make the world a better place. I believe the ripple effects of significantly reducing fraud would make our societies better and healthier, and would make people healthier, happier, and safer.

Will Initiative Q Succeed?

I have no idea if Initiative Q will actually succeed or not.

If I had to make a wild guess, I’d say there’s a 5% chance Initiative Q will make a serious impact in the global financial system, and a 95% chance it will fail.

I don’t know about you, but I’m more than willing to roll the dice and give them my email address in hopes that someday I won’t have to give banks and Paypal so much money for doing something so ridiculously simple as transferring money from one account to another.

However the future of payment systems turns out, I sure as heck hope it’s better than Paypal and credit cards.


Legal Disclaimer: I signed up for Initiative Q, have referred dozens of people to Initiative Q, and have been given 72,036 Q by the company for my referrals as of the time of writing this article. Those Q’s are probably never going to be worth anything, but you should know I have a “vested” interest in Initiative Q and that therefore this article is highly biased and you should do your own research before doing something risky like buying cryptocurrencies.