Picture of Bill Gates, text saying he made comments about crypto and nfts where e correct?

Bill Gates is very critical against Cryptocurrency and NFTs, do I agree with him?

By Patch | Things of note and other interesting stuff | 16 Jun 2022

Bill Gates recently took part in a TechCrunch conference about climate change where he was asked about NFTs and Crypto and he was not overly positive about them, to say the least. Let us find out what he said and if he is correct or not.

The inspiration behind this post was actually a post made by my good friend The Crazy Dude and his post Bill wants to fool us again. Check them out and give him a follow.

What did Bill Gates say?

When asked about NFTs and crypto during a QA Bill Gates said the following in jest.

Obviously, expensive digital images of monkeys are going to improve the world immensely -Bill Gates

He also said he is not into Cryptocurrencies long or short. And also followed that up by saying that.

100% based on greater fool theory -Bill Gates

The type of assets he usually is involved with are the types that have an output, like a farm, or produce things like a company or a factory.

https://edition.cnn.com/videos/business/2022/06/15/bill-gates-crypto-bored-ape-orig-dp.cnn/video/playlists/intl-business/

This was in short what Bill gates said on the question, I have not been able to find the full clip with him. So this will have to do. In this, you can hear what he is saying for yourself.

Is Bill Gates correct in what he is saying?

Let us take a look at what he said one thing at a time. The first one was his joke about a Bored Ape. And I have seen people being upset about what he said focusing on the saving the world aspect. But if you think about where he was, talking at a conference about how tech companies can help combat climate change. Then the wording makes much more sense.

But does Bored Ape provide any value, well no. Just like with most Cryptocurrencies, you can use them to transfer wealth between individuals. The rest of the value is purely speculative. And I would argue that NFTs are even worse than Cryptocurrencies in this aspect. As many of them completely fall apart and become useless as soon as the project leader or figurehead walks away. Compare this to Bitcoin, Satoshi Nakamoto has virtually been nonexistent for the majority of Bitcoins life. Did it fall apart as so many NFTs have, well spoiler it did not.

I will jump over the long and short comment and get back to it further down. Let us now take a look at when 100% greater fool theory remark.

In case you do not know what the bases of this theory are. In short, it says that in a bubble economy you can buy something and always sell it at a higher price. Because there is always a greater fool out there willing to pay more for that something. One of the first examples of this was the Tulip mania in the Netherlands way back. And one of the most recent ones was the housing bubble in China that burst during the pandemic. Their people were buying virtually unlivable apartments as investments hoping that someone further down the line would be willing to pay even more for it.

If you find economy or bubbles interesting I can really recommend giving this topic a go, you will find many fascinating videos on the topic.

I would argue that he is correct, well the speculation part of it is entirely made up of this. How much an NFT is made up out of speculation compares to the ability to transfer wealth P2P. Well, I will let someone else decide. For me, as long as there are Cryptocurrencys I see no value at all in NFTs. Not completely true. Let me rephrase that. I see no value at all in those mass-produced autogenerated NFTs.

Crypto-Monkey has summed this all up excellent in his post called We Have Been Using NFTs Wrong in it he even offers a solution to how they can be used in order to provide an actual value and function. I can not recommend you to read this post enough.

Are cryptocurrencies also subject to this greater fool theory, well yes they are. At least the speculative part of them. If you want to read a little bit more about this I wrote a post a little while back where I took a look at Warren Buffett´s statement about Bitcoin. And in that, he shared a similar sentiment as Bill Gates here, where they both prefer assets with an intangible value to them.

You can read more about my thoughts on that topic here: Warren Buffett is correct regarding Bitcoin, hear me out.

Regarding his long and short comment. This I think can mean two things. One is he has no long or short-term crypto holdings. The other is he has not bet against the market, or with it. Either way, he is just saying he has not involved any of his money in crypto.

My thoughts

Well if you have read my post on Warren Buffett´s comment you know I pretty much agreed with him, and I agree to the same extent with Bill Gates´s statements as well. If we want crypto to survive long term we need to find ways for it to provide real value. And if you have been paying attention I recently posted about researchers who claim to be able to make the world's first E-Stablecoin that is pegged to electricity.

Scientist invents new Stablecoin pegged to electricity

And if they can make it into a reality that would be a huge gamechanger for both crypto and probably the world as well. At least the way I understood it. If I were, to sum up, my experience reading the research publication it would be that my mind was literally blown. I know people throw around that statement a lot, but this was truly the first time I can remember feeling my mind was blown.

Because I am not great at understanding all the moving parts of the paper, I asked my friend that is a patent lawyer to read it and see what he thought about it. And to quote him: "well this is a great way to make a blockchain if you want the noble price". He has so far not found any flaws or reasons why it should not work, in theory at least. The main flaw he sees is the scalability, as the level of power they are talking about generated by one atom is so small it serves no real practical implementation.

But that does not mean science won't find a way to make it work. Just look at quantum computers. We were able to make them work, now it is just a question of being able to scale them up to make them really useful. So a similar problem we seem to be facing there as ith the E-Stablecoin.

So I am really optimistic about the future of crypto. If we can come up with things like this, and make them work. Then it should only be a matter of time before we will have a crypto asset with an intrinsic value. And maybe some NFTs as well.

I hope that you found this post to be interesting, and if you would like to discuss any part of it feel free to leave a comment down below. But please try and have a fruitful discussion. Posting "you are stupid monkey NFTs are the best" is not very fruitful. And keep it civil as well, please.

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