BITCOIN IS SO LAST YEAR – BUT COULD THERE STILL BE VALUE IN INTERNET-BASED CASH?
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( initiativeq.com) 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 (numer.ai) 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.