Skip to content

“The Dumbest Theory”: Bill Gates’s harsh criticism of cryptocurrencies and NFTs

In finance, the dumbest theory starts with an investor doing something stupid in the hope that someone else will later decide to do something even more stupid.

The first buyer pays an inflated amount of money for a good that he will then put up for sale at an even more exorbitant price trying to find someone even “dumber” to buy it.

LOOK: How airless tires can make flats a thing of the past

In this dangerous game, what is exchanged may be tulips -as happened in the first great financial bubble in world history in the first half of the 17th century – or according to the last declarations of Bill Gates, bitcoin.

the founder of microsoft stated at a conference in Berkeley, California, that the market for cryptocurrencies and NFTs (digital tokens) are based “100%” on the theory of the great fool.

And it is that according to this theory, it is possible for investors to obtain a profit buying too expensive and then selling it to another investor.

LOOK: How LaMDA works, the artificial intelligence system that “gained consciousness and feels” according to a Google engineer

This whole cycle works without anyone stopping to think what the real value of the asset is And many investors fall into this trap, experts say, probably without knowing it.

Bitcoin has lost more than half of its value so far this year.

The price of gasoline can go up and up, but oil is always backed by its usefulness. It is useful for something.

Gates added that he prefers invest in companies that create real products.

And not in a service whose “anonymity is used to evade taxes he said in reference to the most famous cryptocurrency.

He said that people bought cryptocurrencies and NFTs regardless of their price and convinced that they could sell more expensively because “someone is willing to pay more for it than me”.

LOOK: Cryptocurrencies: the methods by which cybercriminals steal digital currencies

And he stated that he had never invested in that market.

Warren Buffett is a role model for the ultra-rich.

Warren Buffett is a role model for the ultra-rich.

Other investors and wealthy executives, including Warren Buffett or Jamie Dimon, have also expressed skepticism about cryptocurrencies.

Buffett once called bitcoin “rat poison squared”.

Gates was also ironic about the value of NFTsor non-fungible tokens.

LOOK: Bitcoin: how much did the value of the cryptocurrency fall after Russia’s attack on Ukraine?

They are certificates of ownership of virtual or physical assets often used in the world of art or digital music. After becoming extremely popular last year, their demand seems to have plateaued recently.

“Obviously expensive. digital images of monkeys will improve the world a lot. It’s unbelievable,” Gates said sarcastically on the forum.

The Bored Apes, released in April 2021, are generated programmatically.

The Bored Apes, released in April 2021, are generated programmatically.

The 66-year-old philanthropist and billionaire was referring to the Bored Ape Yacht Club’s digital art collection, a limited run of 10,000 unique pieces from the image of a monkey with minor variations that were sold for thousands of dollars.

But now that the world economy is going through a rough patch, investors prefer to place their capital in less risky investments and they flee from the most speculative bets such as cryptocurrencies or digital certificates, two markets that do not have legal protection.

LOOK: Companies bet on using NFTs for the sale of crypto art

Bitcoin accumulates falls above 50% in 2022, while ethereum has lost 69% of its value.

Monkey NFT has also lost more than half its value.

bitcoin and dollar

bitcoin and dollar

All this suggests that the chain to search for the “dumbest” has stopped affecting many other parts of the market.

Just this week the platform Celsius, one of the largest lenders in digital currencies and a key player in the world of decentralized finance, decided to protect itself from “extreme market conditions” freezing the accounts of its 1.7 million users and imposing a kind of “corralito” to its clients.

In the same vein, Binance, the world’s largest cryptocurrency exchange platform, also had to “pause” bitcoin withdrawals for a few hours while Coinbase Global, another major platform, announced that it would lay off almost a fifth of its staff.

Source: Elcomercio

Share this article:
globalhappenings news.jpg
most popular