What does Bill Gates have to say about Bitcoin?

15 Feb, 2019 | Updated: 15 Feb, 2019
by Joeri Cant
What does Bill Gates have to say about Bitcoin?

Who doesn't know entrepreneur and businessman Bill Gates? The man who co-founded Microsoft in the mid-seventies, one of the world's largest software businesses, while surely becoming one of the richest and most influential men in the world. The man who founded the 'Bill and Melinda Gates Foundation', in an ongoing philanthropic endeavor to eradicate poverty on a global scale. We all know Bill Gates, but what does he have to say about Bitcoin?

Philanthropic billionaire Bill Gates has expressed a variety of opinions on the world's most popular cryptocurrency throughout the years. At times it is difficult to determine whether the self-made billionaire loves or hates Bitcoin.

Whatever his sentiments towards Bitcoin currently are, one thing is for sure: Gates loves to 'flip-flop' on Bitcoin.

Praising Bitcoin in 2014

Cautiously praising Bitcoin years ago in 2014, when the price of one Bitcoin traded around $350, Gates said that 'Bitcoin is exciting because it shows how cheap it can be'.

The Microsoft co-founder added that 'Bitcoin is better than currency', and that fiat currency can be 'inconvenient', especially when it comes to 'large transactions'.

Read more: Is Bitcoin at $1 million really possible?

Gates reined in his enthusiasm for Bitcoin

However, by 2015 Gates had reined in his 'Bitcoin enthusiasm'.

When he was asked if he was excited about the potential of Bitcoin he explained that he does believe that Bitcoin has the potential to do 'a lot to make moving money between countries easier and getting fees down pretty dramatically.'

'But Bitcoin won’t be the dominant system', he said. 'We need things that draw on the revolution of Bitcoin, but Bitcoin alone is not good enough.'

Read more: What happens to Bitcoin if the stock market crashes?

Gates blames cryptocurrencies for drug-related deaths

Three years later, at the beginning of 2018, Gates went totally dark on Bitcoin by focussing on its downsides.

'The main feature of cryptocurrencies is their anonymity. I don’t think this is a good thing', he said in a Reddit AMA post.

'The government’s ability to find money laundering and tax evasion and terrorist funding is a good thing. Right now cryptocurrencies are used for buying fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way.'

Gates did have to admit that anonymous cash can be used for the exact same kind of criminal activities.

'Nevertheless', he said. 'A person has to be physically present to transfer cash, which makes things like kidnapping payments much more complicated.'

Even though Gates changed his tune considerably on Bitcoin, he did remain very positive about the underlying blockchain technology.

'There's some really good technology in terms of sharing databases and verifying transactions that is talked about as blockchain, that is a good thing.'

Read more: 9 Bitcoin price predictions for 2020 by crypto experts

'I would short Bitcoin if I could'

Later that same year, Bill Gates had a sit down with Berkshire Hathaway CEO Warren Buffett and Vice Chairman Charlie Munger on CNBC's 'Squawk Box'.

The Windows creator explained that he actually never owned any cryptocurrency, but did say that he held some BTC briefly after it was given to him as a gift.

'Somebody gave me some for my birthday', he said. 'A few years later, I thought, Hey I'm going to sell that.'

His buddy billionaires, who previously called Bitcoin 'rat poison squared' and trading Bitcoin 'something like dementia', seemed to enjoy this little anecdote. Perhaps a little too much.

In line with his ever-changing views on Bitcoin, Gates added that one reason for him to have a negative forecast for cryptocurrency is because he sees the digital tokens as lacking intrinsic value. 

'As an asset class, you're not producing anything and so you shouldn't expect it to go up', Gates said. 'It's kind of a pure 'greater fool theory' type of investment.'

Gates also went on to say that Bitcoin is 'one of the crazier speculative things', and that if he could, he would 'short it if there was an easy way to do it.'

A comment that caught the attention of crypto billionaire Tyler Winklevoss, who took to Twitter and challenged the Microsoft co-founder, explaining to him that there is indeed an easy way to short Bitcoin and to put his money where his mouth is. A challenge Bill Gates never responded to.

He is slowly warming up to Bitcoin

Bitcoin enthusiasts will point out that Gates has been spreading out gloom and doom predictions for quite some years now, however, in a video posted at the end of 2018, Gates appears to be warming up (again) to Bitcoin and cryptocurrencies in general.

He apparently is realizing the massive opportunity which Bitcoin presents in helping those in poverty without access to traditional financial institutions. 

Read more: Will Bitcoin replace fiat currency?

'If we were building a financial system from scratch today, we would do it on a digital platform. Digital could lower the cost of a range of transactions by as much as 90%, providing nearly universal access to innovative financial products and services', Gates said.

Gates points to the astonishing fact that over 2.5 billion people don't have access to traditional financial services and relates to how cryptocurrency can help the world’s most impoverished.

'Poor people do have assets: their intellect, their labor, their savings', he said. 'Their problem is that they don’t have financial tools to capitalize on these resources. They are trapped in inefficient cash economies that rob them of opportunities to insure themselves against risk, invest in their productivity, and ultimately help lift them out of poverty.'

'Transforming the underlying economics of financial services through digital currency will help those who live in poverty directly.'

Read more: Will Bitcoin recover in 2019?

In October 2018, The Bill and Melinda Gates Foundation officially announced a partnership with Ripple, using the Interledger Protocol to send funds to underdeveloped regions of the world. The foundation had been using Ripple’s technology ever since an initial partnership with Ripple more than a year ago.

The Gates Foundation’s deputy director Miller Abel announced the news on Twitter.

Many cryptocurrency enthusiasts often make the understandable argument that characters like Buffett and Munger 'just don't understand' Bitcoin. After all, these two billionaires aren't exactly known for being tech-savvy. This is of course not something anybody can claim about 'tech heavyweight' Bill Gates.

In the case of Gates, it actually 'stings' to see that he has shown such deep skepticism about the prospects of Bitcoin over the years, despite having faith in the cryptocurrency's underlying technology.

However, the time might be right for Bill Gates to once and for all 'flip' to the side of Bitcoin and leave the 'flop' to somebody else.

Read more: Is Bitcoin dead? 8 reasons why it is NOT

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