Al­ter­na­tive cur­ren­cies


TechLife Australia - - WELCOME -

CRYP­TOCUR­RENCY WAS BIG news for a while. The vir­tual money sys­tem, which es­sen­tially works by ex­chang­ing unique to­kens on­line (and, in rare oc­ca­sions, ex­chang­ing those unique to­kens for goods, ser­vices and real money) caught a lot of pub­lic at­ten­tion, mainly be­cause it seemed to be a ma­chine for gen­er­at­ing free money. That state­ment is about a fifth true. Some peo­ple did profit, but the ma­jor­ity did not; the cryp­tocur­rency value spike of 2017 is, by all ac­counts, over for now.

The mar­ket seems to have sta­bilised, and the ma­jor­ity of the hype has died down. But per­haps, posit some de­vel­op­ers, the con­cept be­hind cryp­tocur­ren­cies is strong enough to sup­port new ideas? We’re scep­ti­cal, but there are cer­tainly schemes out there that have been in­spired by the crypto boom. Ini­tia­tive Q( ini­tia­ is one of the more prom­i­nent, founded by the cre­ator of a fraud-de­tec­tion scheme later pur­chased by PayPal. With much hy­per­bole, it claims to be cre­at­ing a net­work of to­kens that could be worth $3 tril­lion once the cur­rency has ma­tured, and is launch­ing through what is, re­al­is­ti­cally, a pyra­mid-scheme ap­proach. The ear­li­est adopters get a few hun­dred thou­sand free to­kens from the pool, and tell their friends, who get a smaller chunk, and so on and so on.

It sounds pre­pos­ter­ous. It’s an of­fer of free money. Ex­cept it’s not money yet, and it has no value, but it might be money one day. That’s quite the thing – but per­haps what Ini­tia­tive Q is re­ally try­ing to do is not launch a cur­rency (be­cause it will al­most cer­tainly be a cur­rency that’s worth noth­ing) but to ask ques­tions about the way in which we deal with real money trans­ac­tions, and col­lect as many email ad­dresses as pos­si­ble.

Per­haps Ini­tia­tive Q is look­ing in the wrong di­rec­tion, though. Hedge fund Numerai (nu­ has its own dig­i­tal cur­rency, Numeraire, which has a phil­an­thropic bent. Its aim is data sci­ence col­lab­o­ra­tion; datawran­glers bet the cur­rency on the ef­fi­ciency of dif­fer­ent al­go­rithms, and when those al­go­rithms suc­ceed, the value of the cur­rency goes up for ev­ery­one, and the fund grows. That is a good thing.

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