Bill Gates says crypto and NFTs are '100% based on greater fool theory' (2024)

FAQs

What did Bill Gates say about NFT? ›

Microsoft co-founder Bill Gates said he thinks cryptocurrencies and NFTs are “100% based on greater fool theory.” “Expensive digital images of monkeys” will “improve the world immensely,” Gates joked, referring to Bored Ape NFTs.

At the core of how both cryptocurrency and NFTs are used is a form of tokenization. Cryptocurrency is functionally a token that is created on a blockchain to signify a unit of value, while an NFT is a token on blockchain enabling ownership of a unique digital asset.

“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,” he said.

Disadvantages of Using Bitcoin for NFT Minting

One significant limitation is its restricted functionality compared to Ethereum. Unlike Ethereum, Bitcoin's blockchain wasn't initially designed for smart contracts. This barred it from having complex capabilities to build smart contracts and, consequently, NFTs.

NFTs are blockchain representations of an asset. NFT investing is helpful for establishing a clear chain of ownership over an asset, but it still includes the possibility of counterfeiting, fraud, and money laundering. The asset tokenized by the NFT may be nonexistent, duplicated, or tainted.

Buffett is against Bitcoin and crypto in general. However, this stance does not entirely translate into his company's investments. Berkshire Hathaway is heavily invested in Brazilian fintech Nu Holdings Ltd. The investment was its strongest performer in 2023.

What is the difference between NFTs and crypto? The main difference between NFTs and cryptocurrencies is that NFTs are unique and non-interchangeable, while cryptocurrencies are interchangeable and can be easily traded or used as a form of payment.

NFTs can be traded and exchanged for money, cryptocurrencies, or other NFTs—it all depends on the value the market and owners have placed on them.

However, NFTs have expanded to many other blockchain networks, including Bitcoin. Bitcoin NFTs may surprise many, but the network has quickly gained traction for creators and holders of digital collectibles.

In a recent discussion on X (Twitter), Musk revealed he owns a "bunch" of one crypto and his space-focused companies holds another. Elon Musk recently confirmed that he still held the popular memecoin, Dogecoin, and that his SpaceX company continues to hold bitcoin, the world's largest cryptocurrency.

Does Mark Zuckerberg own any crypto? ›

In May this year, Facebook creator, Mark Zuckerberg just shared that he too, owns Bitcoin - but there's a catch. Facebook(Now Meta) CEO Mark Zuckerberg's on Tuesday posted a photo of his bitcoin investment on Facebook - except the post involved an animal: His pet goat Bitcoin.

You can't write up a list of crypto billionaires without mentioning the founder of MicroStrategy, a firm that has turned into a bitcoin investment vehicle recently. In October 2020, Saylor shared that he personally purchased 17,732 bitcoins for $175 million on top of the investments of his firm in the digital asset.

Buying either crypto requires a high risk tolerance. Looking at past performance, it's difficult to choose a winner between Bitcoin and Ether because their relative returns fluctuate depending on the time frame. In the past year, Bitcoin prices are up 157% compared to a 100% gain for Ether.

Bitcoin's use as a store of value is well-established, and it continues to get easier to use it as a medium of exchange, too. Crypto is riskier to invest in than Bitcoin because it is difficult for an investor to accurately assess the risk associated with code from a highly complex and opaque system.

Non-fungible tokens (NFTs) and ordinals are assets that are tokenized using a blockchain. Because blockchains use energy, NFTs can contribute to greenhouse gas emissions and climate change through their production, exchange, and storage.

NFT scams happen when they steal your crypto wallet login credentials or trick you into believing that you are trading with a legitimate or successful project. If they gain access to the wallet where you keep your crypto funds, then you won't only be a victim of an NFT scam but of crypto fraud.

Many critics see NFTs as hyper-capitalist schemes to enrich speculators by wasting energy on hypothetical value. This opposes the decentralization ethos of web3. Meanwhile, supporters view NFTs as expanding digital property rights, creativity, and economic opportunity.

Since most NFT trading activity used cryptocurrencies, the devaluation of these digital currencies meant that investors had less capital to invest in NFTs. The resulting liquidity crunch was a significant blow to the NFT market, which heavily relies on the health and stability of the broader crypto ecosystem.

Gamers buy NFTs for various reasons too, perhaps to upgrade their gameplay or to own a valuable in-game item. Most NFT projects now also offer special perks such as utility, community benefits, merchandise, and more.