FAQ

General Questions

Is the Qbit money?

Yes. It is as valid as any other currency in circulation.

What gives the Qbit its value?

The value of the Qbit comes from the same properties that give all money its value. It is fungible, recognizable, limited, private, liquid, costly to obtain, valued, useful for trade, useful as a store of value, and possession is ownership.

Are Qbits as safe as my credit cards?

No. Qbits are as safe as cash. Actually, they are somewhat safer because they can be backed up. Carrying and spending Qbits is somewhat safer than carrying and spending cash. But it is not as safe as credit cards.

It is possible for a bank to create a Qbit credit card. In that case, the answer is yes.

Are Qbits as safe as my debit cards?

It really depends on how you define safe. If you lose your debit card and your PIN is written on the back of it, your money isn’t very safe.

Carrying and spending Qbits is somewhat safer than carrying and spending cash. But it is not as safe as monetary instruments backed by banks, such as debit cards. However, it is possible for banks to create Qbit-based debit cards. In that case, the answer is yes.

What happens if I lose my phone containing my Qwallet?

Your Qwallet requires a PIN to access it. If your PIN is easy to figure out, you’re in trouble when you lose your mobile device.

If you have backed up your Qwallet to your Qsafe, you must quickly access your Qsafe. You use your Qsafe to invalidate the Qbits on your mobile device so that you can use the backup instead.

You must act fast to preserve your lost Qbits. If someone finds your phone and figures out your PIN before you can access the backup in your Qsafe, it is possible for them to move your Qbits to their account. The Qbit system will see the Qbits as no longer belonging to the account in your Qwallet. They will have successfully stolen your money.

If you have not backed up your Qwallet, then it is just like losing a real wallet with real cash. It’s probably gone.

What happens if my phone dies? Do I lose my Qbits?

If you have backed up your Qwallet to your Qsafe, you have not lost anything. You just transfer your Qbits in the backup to another account in your safe. The Qbit system will see the Qbits as no longer belonging to the account in your Qwallet. When you get a new phone with Qwallet software, you can transfer the Qbits from your new Qsafe account to your new Qwallet.

If you have not backed up your Qwallet, then it is just like losing a real wallet with real cash. It’s gone.

What happens if many currencies in the world lose their value at the same time? Won’t that affect Qbits as well?

No. The value of other currencies does not necessarily affect the buying power of the Qbit. This is one of the primary reasons that the Qbit was created.

If, for instance, the value of the US dollar collapsed, it would cause a domino effect that would destroy the value of most national currencies around the world. That is because the US dollar is used to back some 50-60 other national currencies. The current world economic system can’t survive such an event.

However, the Qbit would continue because it has no connection to the politics or finances of any particular nation. In a worldwide economic collapse, it is likely that the Qbit would become more valuable, not less.

Isn’t this a pretty subversive idea?

Bwahahahahahahahaaaaaaa!

Ok, the real answer is that it depends on your point of view. Qbits are definitely a disruptive technology. History is filled with disruptive technologies (examples: mass produced cars, hydraulic backhoes, angioplasty, mainframe computers, personal computers, smartphones). It is normal that disruptive technologies should occur in a free market. Disruptive technologies always produce something better.

A free currency market vastly democratizes money and the economy. Everyone can be a player. Anyone can issue a currency and have it succeed if they can gain the trust of a large enough group of people and if their currency has features that people want.

Qbits apply free market principles to money itself. This produces a more stable economy that is designed to maximize the benefit to all of its participants, not just a select few. 

The Qbit System

Why do you use the Qbit Federation to control the money supply? Isn’t that just the same as having a central bank?

The Qbit Federation is not a central bank and doesn’t act like one. It does not control the value of the Qbit. The Qbit system manages that by itself.

The only involvement that the Qbit Federation has in regulating the value of the Qbit is in creating the product codes that your wallet uses to report Qbit transactions when you have reporting turned on. The QFed tries as hard as is humanly possible to make codes for as many products as possible. In this way, it makes the Qbit Value Formula’s commodity basket as large as it can be. The larger the basket, the more complete picture the system has of the current state of the economy and the more accurately it can respond to inflation and deflation.

Other than that, the QFed is not involved in regulating the value or supply of Qbits.

Central banks issue money by using debt. That is, all money gets into the economy through lending. Debt-based money requires the payment of interest, which concentrates wealth and power from the many to the few.

Central banks use central planning to control the economy. A few unelected people decide what interest rates will be, what unemployment levels will be, how easy or hard it is to get a loan, and so on. They control virtually all aspects of a nation’s economy.

The Qbit Federation does not create or distribute money through debt. There is nothing in the system that concentrates money or power to the QFed. It finances itself by providing services and making investments. Because it is a nonprofit corporation, any excess money that the QFed makes goes into the escrow fund that distributes money out to the economy when it is needed.

Because the QFed is not run by the government, it is not subject to political expediency. The QFed survives by maintaining the buying power of the Qbit at a reasonably constant level over time. If it fails in that task, people will stop using the Qbit and the QFed will be gone. It has a vested interest in keeping the Qbit at a stable value and making it as easy and convenient to use as possible.

Unlike central banks, the QFed can’t make the Qbit into a centrally planned economy. Attempting to do so would cause them to have the same problems as central banks. That is, the Qbit would go through periods of boom and bust. Customers would react by dumping the Qbit and moving to another form of money. To maintain the value of the Qbit, the QFed must react to changing market conditions, not try to plan them. The market must drive the QFed, not the other way around.

I still don’t like having a central organization. Isn’t there a way you could build the system without the QFed?

If you can think of a way to do that, we invite you to do so. The primary reasons that the QFed exists are to promote the use of the Qbit and to keep the commodities basket current. If you can think of a way for the system to maintain its own commodities basket, please contact us immediately.

Why are Qbits priced against a basket of commodities? Why don’t you just price it against gold?

Pricing Qbits against gold is a tempting idea because the value of gold is universal. It’s true that you pay different amounts for an ounce of gold when you use different currencies. But you pay the same value. That is, if gold is $1500/oz in US dollars and at the same time it is $1600 in Canadian dollars, it is because $1500 US dollars equals $1600 Canadian dollars. Therefore, one ounce of gold bought with Canadian dollars has the same value as one ounce of gold bought with US dollars.

However, tying the price of Qbits to the price of gold means that the value of the Qbit will rise and fall with the value of gold. The price of gold does not reflect what the economy is doing. For example, if someone comes up with a new technology for mining and refining gold, the value of gold will plummet. This already happened once with silver. That’s why no one wants to pet their currencies against silver.

The Qbit Federation seeks for a more stable currency than that. The goal is to maintain the buying power of the Qbit at the same level over time. We see this as more advantageous to both consumers and businesses. Using the Qbit Value Formula and a large commodities basket means that the value of the Qbit is reflective of what’s going on in the economy.

Isn’t your basket of commodities similar to the basket used by governments to calculate inflation?

No. The QFed’s basket of commodities that it uses to maintain the buying power of the Qbit is specifically designed to be an accurate representation of the use of the Qbit in the real economy. Therefore, it is a real reflection of how much you can buy with a Qbit. The commodities in the basket are selected in a way that will give long-term stability to the Qbit.

On the other hand, the basket of commodities that governments use to measure inflation is primarily a propaganda move. The basket does not reflect the real use of the government’s money in the economy. For instance, the basket used by the US government to measure inflation does not contain food or gasoline, both of which have risen by far more than the reported inflation over the last several years. The US government has been reporting that inflation has been around 3%-4% during the first and second Obama administrations. This is completely false. They manipulate this figure by manipulating the commodities in the basket. Economists estimate that real inflation has been at least 6%-9% and possibly as high as 13%-15% during Obama’s entire tenure. Similar manipulation has been common in every US presidential administration for decades.

How do you know what value to maintain the Qbit at?

The goal of the QFed is to get the value of the Qbit to have approximately the same buying power that $10 US dollars had as of June 2014. It will then maintain the Qbit as close to that level as possible.

Admittedly, we are arbitrarily picking this level of buying power as the standard that we want to hold the Qbit to. But it is just as good as any other and it will make it easy for people around the world to make conversions in their heads.

For example, Americans will know that 1 Qbit equals approximately $10 and 1 milliQ equals about one penny; Japanese will know that 1 Qbit equals approximately 1000 yen and one milliQ is about the same as 1 yen; and so on.

Qbits and Government

Qbits are seen in some countries as a foreign currency. Don’t legal tender laws make it illegal to pay in foreign currencies?

No and yes. The answer varies by country. For example, legal tender laws in the US state that you must pay debts with US dollars IF you incur the debt first. That is, if you eat a meal at a restaurant in the US, you are in debt to the restaurant and required to pay in US dollars.

On the other hand, if you go to a store to buy something and you and the store agree in advance to pay in something other than US dollars, you can.

Note that it is also possible to pay the restaurant owner in another currency if and only if both you and the owner agree on that in advance. So if the restaurant has a sign that says, “We Accept Qbits” you are free to pay in Qbits and the restaurant owner is free to accept them.

It is also legal in the US to incur debts, take out loans, etc. in foreign currencies if you and the other party agree to do so in advance. As long as everyone involved knows what they’re getting and agrees to it in advance, it’s ok.

In some countries, it is illegal to buy, sell, or fulfill contracts with anything other than the national currency. However, the number of countries that have such laws is around half a dozen.

Some countries may see the Qbit as a commodity rather than a currency (like gold). These countries do not make it illegal to use commodities to buy and sell. But you may have to pay capital gains tax. The Qwallet software is designed to handle this for you.

Won’t the government see this as bad? Isn’t it illegal to mint your own currency?

Some governments will definitely see Qbits as bad, especially repressive regimes.

In most countries, Qbits are perfectly legal because they are a foreign currency or just a commodity like gold or silver. Most countries do not prevent you from using them if both the buyer and the seller agree to do so in advance.

We already use many forms of private currency and currency-like products. Here’s a partial list:

  • Checks
  • IOUs
  • Discount coupon books sold for fundraising activities
  • Discount coupons in newspaper ads
  • Rebates on preferred customer cards
  • Airline miles used to gain discounts on flights
  • And many, many more.

Outlawing Qbits means outlawing all of these as well. Virtual cash is deeply engrained in our economic system. The Qbit system is just a generalization of existing practices.

What if the government tries to shut down the QFed?

Nothing, that’s what. As far as we know, Qbits stay well within the laws of all democratic governments. Free societies will be the place where the Qbit system thrives. Qbits are by the people and for the people. They strengthen individual rights and empower everyone in the system.

Suppose one repressive government (or other group) shuts down the QFed’s headquarters by bombing it completely out of existence. It won’t make any difference at all. Protocols are in place for the system to survive that. The QFed can reform where it is legal to do so.

Even if a repressive government or a group of repressive governments does get the entire system shut down, it still won’t matter. Almost all of the software is built on free and open source libraries. Anyone can use them to create their own digital currency system anywhere in the world. It really only takes one dedicated person to reconstitute the Qbit system or something very similar. Going after any one person or group won’t make any difference at all. You can even shut down the entire Internet and the system can survive using the telephone network, CB radios, or HAM radios.

Qbits and Bad Guys

Can’t bad guys use Qbits to evade taxes, launder money, and stuff like that?

Yes. But they already do that with cash and by many other means. Anything of value can be used to accomplish those purposes. Qbits are no different in that respect. Therefore, the Qbit is no worse than what we already have. And in many ways, it is better.

Talking about the bad guys using Qbits is, in fact, deception by misdirection. The preferred currency of dictators, drug cartels, warlords, and bad guys around the world is the US dollar. In fact, these days, bad guys in certain places in South America, Asia, and Africa actually buy banks so that they can launder their ill-gotten gains . They move their money across national borders disguised as legitimate bank transactions.

Note: For more information on the activities of organized crime using legitimate banks to launder money, please see How the Russian mafia use the banking system (especially Britain's). For information on known members of organized crime that are owners or officers of mainstream banks, see http://rumafia.com.

Qbits are not even a consideration to most criminals. If we say that the Qbit should be eradicated because bad guys use it then we must say the same of the US dollar.

In addition, criminal organizations are already issuing their own digital currencies based on bitcoin technology. Western law enforcement reports that at least three such currencies are already in circulation in Russia and central Asia, and their acceptance is quietly growing around the world . If legitimate organizations don’t get into this, the bad guys will. They won’t care if countries outlaw it. They’ll do it anyway. 

Note: For information on digital currencies minted by organized crime, see Bye, Bitcoin: Criminals Seek Other Crypto Currency, and Mo Money Mo Problems.

And with the problems most national currencies are experiencing, people around the world will have profound motivations to accept and use digital currencies sponsored by criminal organizations as long as they’re stable. It’s actually possible that if we don’t create a free market of competing currencies and our national currencies collapse, we could unintentionally hand over control of our entire worldwide economy to criminals. And no one could buy or sell unless they participated in the criminal economy. Hopefully we never see the conditions that could lead to such an extreme scenario. But applying free market principles to money itself ensures that this can’t happen.

Technical Questions

Coming Soon

© Qbit Federation 2014                Home | Site Map | FAQ