Bill Gates Slams Crypto and NFTs as 'Greater-Fool' Theory

Who is Bill Gates?

Bill Gates, an entrepreneur and businessman, and his business partner Paul Allen founded and built Microsoft, the world's largest software company, through technological innovation, astute business strategy, and aggressive business tactics. In the process, Gates became one of the world's wealthiest men. Gates announced in February 2014 that he was stepping down as chairman of Microsoft to focus on charitable work at his foundation, the Bill and Melinda Gates Foundation.

In 1975, Gates and his friend Allen founded Micro-Soft, a combination of the terms "microcomputer" and "software" (they dropped the hyphen within a year). The first product of the company was BASIC software for the Altair computer.

At first, things were not going well. Although Microsoft's BASIC software program for the Altair computer paid a fee and royalties, it did not cover the company's overhead. According to Gates' later account, only about 10% of those using BASIC on the Altair computer paid for it.

Microsoft's BASIC software was popular among computer hobbyists, who obtained pre-production copies and distributed them for free. Many computer enthusiasts at the time were not motivated by monetary gain.

They felt that because of the ease of reproduction and distribution, they could share software with friends and fellow computer enthusiasts. Gates had a different viewpoint. He considered free software distribution to be stealing, especially when it involved software designed to be sold.

In an open letter to computer hobbyists in February 1976, Gates stated that continued distribution and use of software without payment would "prevent good software from being written." In essence, software piracy discourages developers from investing time and money in developing high-quality software. The letter was unpopular among computer enthusiasts, but Gates remained firm in his beliefs and used the threat of innovation as a defense when accused of unfair business practices.

Gates had a fractious relationship with MITS president Ed Roberts, which frequently resulted in shouting matches. On software development and business direction, the combative Gates clashed with Roberts. Gates was considered spoiled and obnoxious by Roberts.

Roberts sold MITS to another computer company in 1977 and returned to Georgia to attend medical school and become a doctor.

Allen and Gates were on their own. To keep the software rights they had developed for Altair, the pair had to sue the new owner of MITS. Microsoft created software in various formats for other computer companies, and Gates relocated the company's headquarters to Bellevue, Washington, just east of Seattle, in early 1979.

Bill Gates and the cryptocurrency projects.

At a climate conference on Tuesday, billionaire Bill Gates dismissed cryptocurrency projects such as nonfungible tokens as shams "based on the greater-fool theory," reviving previous criticisms of digital assets.

"Obviously, expensive digital images of monkeys are going to improve the world enormously," Gates remarked sarcastically at a TechCrunch event in Berkeley, California. He stated that he is neither long nor short on the asset class.

Gates has previously criticized cryptocurrency, arguing with Elon Musk last year about whether Bitcoin is too risky for retail investors and the environmental damage caused by mining coins. Speaking as the founder of Breakthrough Energy Ventures, the climate-focused fund he established in 2015, Gates emphasized the difficulty of recruiting Silicon Valley engineers to work in industries such as chemicals and steel production that require lower greenhouse gas emissions.

Bitcoin fell more than 15% on Monday and another 5.4 percent on Tuesday, part of a larger crypto selloff fueled by higher-than-expected US inflation and the suspension of withdrawals by lending platform Celsius. Popular NFT collections, such as the celebrity-favored Bored Ape Yacht Club (BAYC), have also taken a beating.

Gates also defended digital banking initiatives he's supported through his philanthropic foundations, calling them "hundreds of times more efficient" than cryptocurrencies.

Breakthrough Energy Ventures is supported by Michael Bloomberg, the founder and majority owner of Bloomberg LP.