The second richest man in the world, with a a net worth of $91.7 billion, does not appear to like crypto much according to a reply in a new “ask me anything” session. Bill Gates said:
“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.”
That statement was criticized on many fronts. On anonymity, it is possible, but you have to work very hard for it. Just as it is possible with other financial instruments, including bank accounts, by creating complex corporate structures or moving to different jurisdictions or by sending them through charitable foundations for tax avoidance or other reasons, or indeed by having some government do so without a public ledger.
Trillions have been laundered with fiat after all. While terrorists weren’t selling their oil for crypto, not least because that would have added a complicating element of then having to transfer it into fiat, but instead sold their oil for hard cash, usually dollars.
They might have perhaps asked for donations by putting up some bitcoin address, but as all of that is publicly recorded, whoever wished to send to them would have had to exert considerable effort to not slip up while the entire world was watching.
And in any event, any such donation would have been tiny compared to the actual fiat generated revenue through oil sales and billionaires as well as governments fundings, which, had they been through a public ledger, might have been revealed a lot more fully by now.
The drugs angle is interesting because it assumes such drugs started being sold and bought only after cryptos were invented when we all know you can just walk down to the corner and buy whatever drug you want and usually they don’t accept cryptos.
Which makes us think Bill Gates has some other real reason why he doesn’t like cryptos because we don’t buy it for a second that the founder of windows computers is in effect arguing his technology caused child porn.
And with Gates so often being the richest man in the world, we can think of plenty of reasons why he would not like a technology that opens the barriers to value creation.
This is, after-all, a man who has been found guilty numerous times and by numerous courts for engaging in anti-competitive practices. No wonder thus he would not like a technology that challenges such monopolies or monopolistic practices.
But we do suspect his views might not be his own but those of Warren Buffett, who he says is his best friend of sorts. Buffet of course has very good reasons to dislike ICOs in particular because his model was to buy companies and then flip them. A model which would be more expensive if those companies did not have to beg VCs but could instead be funded by the people directly.
Gates however does have a good point. In reply to someone saying “The US dollar is also used to buy fentanyl and god knows what else,” Gates says:
“Yes – anonymous cash is used for these kinds of things but you have to be physically present to transfer it which makes things like kidnapping payments more difficult.”
Ignoring his moving the goal post, things like crypto-kidnappings and robberies are starting to become a problem. But the address where the money is sent is public, and remains so forever. A little slip up, which is highly likely in such tense situations, and the criminal can be locked behind bars with keys thrown away.
It has always been a game of cat and mouse between law enforcement and criminals. They both are humans, contain lateral thinking, they both innovate and so on.
Technology only changes the tools of the game, but the rules are the same as they have always been. However, there were far more criminals and crimes when we had less technology. As such, we can deduce technology, at least in part or as a combination with other factors like growing economic wealth, reduces crime.
We are sure William Henry Gates III is aware of that, just as he is probably aware that to directly blame a technology he called a tour de force for criminals being criminals is an argument that would not persuade anyone.
But it might make one think this is going the right way to break down those elitist barriers that keep making the rich richer, free to invest in any company they please, free to pay as good as zero taxes under their fiat based anonymity schemes, while the rest slave away under the gates that prevent their partaking in value creation.
