In a recent AMA on Reddit, Bill Gates explained he does not invest in bitcoin or other cryptocurrencies because they do not add to society.
- Bill Gates recently hosted an AMA on Reddit where he discussed why he does not invest in bitcoin or other cryptocurrencies.
- Gates explained that bitcoin provides no valuable output and therefore does not add to society.
- We need to change the lens through which we define value and output to correct this misunderstanding.
Bill Gates, fourth-richest person in the world and legendary founder of Microsoft, held an Ask Me Anything (AMA) on Reddit, which was proven to be true on Twitter, where he explained he does not invest in bitcoin because it is not “adding to society”. Is he wrong?
When a Reddit user asked Gates what he thought about bitcoin and other cryptocurrencies, he replied:
“I don’t own any. I like investing in things that have valuable output. The value of companies is based on how they make great products. The value of crypto is just what some other person decides someone else will pay for it, so not adding to society like other investments.”
However, in an interview with Bloomberg this past February, Gates commented on his foundation’s opinion towards forms of digital money, when he explained:
“It’s not got the visibility of bitcoin, but the move towards digital money, that we are very engaged in, is a super positive thing that eventually will get to even the poorest countries.”
The issue is not the technological innovation of bitcoin as a digital form of money or its ability to help poor countries, because Gates clearly supports that. The issue is how Gates defines value.
Initial stock offerings create a direct interaction where investors give companies money to accomplish their goals for a share in the company. The same can be said for the bond market, where investors are giving money to governments so they can accomplish a goal, and the government agrees to pay investors back a specific amount of money for the loan.
Gates defines value by the output that is achieved by a central entity receiving money to further their own goals. This is the antithesis of bitcoin, so of course Gates opposes it.
Bitcoin is a decentralized form of currency that functions as a store of value and medium of exchange, something to be traded for something else the user wants. There is not a company you are investing in when you acquire bitcoin, therefore the output Gates uses to determine value does not exist.
Not being able to invest in bitcoin is similar to how one does not invest in cash. One simply holds cash as a means to acquire other goods. The difference between cash and bitcoin is there’s no central entity controlling it, manipulating its supply, or hindering one’s ability to use it as intended by the user.
In order for Gates to accurately value bitcoin, he must first separate bitcoin from the ideology of benefitting the output of a centralized entity.
This article was originally published on bitcoinmagazine.com