A lot of people who have been pushing for the adoption of cryptocurrencies including sheer scammers who want to convince unsuspecting people to join their ponzi schemes have often quoted Bill Gates as having expressed belief in cryptocurrencies
Of course when the second richest man in the world (yes, he was recently surpassed by Amazon’s Jeff Bezos) says something, you sit and listen especially if you are the type that wants to get rich quick and would fall for ponzis. Even those who have bought cryptos and are not part of any scheme really have also taken comfort in the belief that Bill Gates seemed to endorse cryptos.
The quote that everyone in the crypto world loved to quote is this one from a Bloomberg interview:
Well, Bitcoin is exciting because it shows how cheap it can be. Bitcoin is better than currency in that you don’t have to be physically in the same place and of course for large transactions currency can get pretty inconvenient.
Now Bill Says Cryptos Have Caused Death
Fast forward to today and social media is ablaze, people commenting on Bill Gates’ more recent comments on cryptos. This is what he said on Reddit Ask Me Anything:
The main feature of crypto currencies is their anonymity. I don’t think this is a good thing. The Governments ability to find money laundering and tax evasion and terrorist funding is a good thing. Right now crypto currencies are used for buying fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and crypto currencies is super risky for those who go long.
But Has Bill Really Changed His Mind?
The truth is Bill did not start expressing the reservations above recently. In the 2014 Bloomberg interview I initially quoted Gates didn’t just say just the one thing. It’s a classic case of people hearing what they want to hear. Bill Gates was already skeptical about the supposed anonymity of crytpocurrencies particularly bitcoin transactions.
He said:
The customers we’re talking about aren’t trying to be anonymous. You know they’re willing to be known, so the Bitcoin technology is key, and you could add to it or you could build a similar technology where there’s enough attribution that people feel comfortable that this is nothing to do with terrorism or any type of money laundering.
Bill has always viewed the anonymity characteristic as problematic. He was not comfortable with the fact that there is no discretion between transactions, every transaction goes through. This means you can sell drugs, or even humans more easily.
In the Ask Me Anything, Gates responded to a comment that said the problematic transactions he highlighted could still be done with cash just as easily and as anonymously. He correctly responded that cash requires you to be present for the transaction to happen which then makes it more difficult for criminals particularly for things like kidnapping.
Gates Is Not Entirely Right
Crytocurrencies are not as anonymous as people think. First these currencies are bought on exchanges and sold on exchanges and the exchanges can be regulated or even shut down. As a result the exchanges have KYC requirements just similar to banks or sometimes even more stringent.
The bigger misconception that Bill fell into is assuming that cryptos are anonymous by deesign. They are not. Cryptos are pseudonymous meaning that crypto transactions can be tracked by forensic audit since they are recorded in the blockchain. This is why the criminal elements on the dark web use some coin mixing serves that make their transactions more difficult to trace.
Even If He’s Right
A lot of commentators on social media are using the age old knife analogy to dismiss Bill Gates’ comments:
A knife in the hands of a surgeon saves lives but the same knife in the hands of a terrorist…
But It’s Not Just The Crime Bill Is Concerned About
Bill Gates also spoke about the economics of the whole thing. He commented on the “speculative wave” of ICO’s and cryptocurrencies calling them super risky. This is probably retrospective after seeing how the cryptos plummeted after some crazy growth last year.
Billionaire Buddy Consensus
Fellow billionaire and friend of Biill Gates, Warren Baffet dismissed bitcoin and cryptocurrencies early January this year saying that it’s all gonna end badly. Baffet is an undisputed maestro when it comes to investing and understanding markets. I would take his caution seriously.
I Agree With What Gates Said In 2015
In his interview with Backchannel in 2015 Bill Gates expressed optimism about cryptocurrencies and the problems they solve. He however expressed that bitcoin would not be dominant in the future. I agree with this position and I already discussed this here on Techzim when I gave a Zimbabwean perspective to bitcoin.
Blockchain Yes, Cryptos I Don’t Know
My response to questions around cryptocurrencies is usually that I am very bullish about the blockchain technology and it’s use cases. I don’t see it going anywhere, a lot of applications are going to be built on it and it will be part of our daily lives. That does not necessarily translate to cryptocurerencies although they brought blockchain innovation to the world.
If cryptocurrencies survive, I don’t think the dominant one will necessarily be bitcoin because of the complexity of the blockchain it’s built on (possibly giving it less utility) and the cost and speed (slowness) of transactions.
Obviously
The billionaires have spoken and it is wise to listen. Let’s probe more and be careful even as we are excited about the possibilities of this new technology. As with all life, bitcoin and cryptocurrencies are a paradox, the challenge is on how to get the paradox into balance.
5 comments
Great, so you at techzim are finally coming to your senses, and realizing that Bitcoin is a scam after all!! Happy to know that, did you lose a lot ? Is that why none of your recent articles are punting Bitcoin and golix or whatever its called anymore?
I personally do not think that bitcoin is a scam but yes there are a lot of ponzi schemes popping up everywhere and it’s dangerous territory.
I am not confident that bitcoin will survive the long haul even if cryptos do survive (which is not a given) BUT I am super confident that blockchain will survive. It’s usefulness is far beyond currency. A lot is already being built utilising this technology.
You asked about losing: I am not bullish about bitcoin in the long term but I am very speculative and optimistic in the short term so I am still holding some coins but so far I am on the losing side of the game…
You don’t know what you’re talking about buddy 😂😂😂😂leave it to the experts.
Good journalism is dying, this whole article is based on a cognitive bias know by the name “Appeal to authority.” Quoting Bill and Warren’s comments on an industry they don’t yet understand is lunacy. Have you read Satoshis paper? I doubt it. The current state if cryptocurrency is not what or why it began. The markets will correct and individuals will come up with a better form, bitcoin was meant to be an economic experiment from the get go not a full blown system. But with anything that has a lucrative opportunity everyone else wanted a slice tons of alt coins now exist and not all of them are useful. In fact 85% of them are “me too” products. As for the quote on drugs. Did people start buying drugs after bitcoin was on the scene? Hell no 😂😂😂😂that’s why the war on drugs dates back to the late 60’s. People have always bought drugs with fiat, why is now any different that people use crypto? Moving on to ICOs first thing to understand is this. The people who come up with these ideas aren’t all that schooled in the financial markets nor law. They make them to satisfy their own problems. ICO make 0 sense if you understand economics or simply the stock market. Now instead of just telling all these crypto and ICO believers off, why not point out the flaws and help give solutions to them? Let’s be constructive about this, it’s a new technology with it’s perks and downfalls. But a novel contribution To global economics and international finance all the same. Let’s look at it in all perspectives. – The Lost Cause
Email me at axtechinc@gmail.com for those of us Modern Rogues. I’ll leave the door open 😉
RIP Good journalism then