“The Biggest Fool Theory”: Bill Gates takes down NFTs

The billionaire and philanthropist assured that he has “nothing to do” with NFTs, these unique virtual images that are traded at a gold price, but whose usefulness is increasingly disputed.

Of course, digital images of monkeys will greatly improve the state of the world. “, sarcastically launched Bill Gates on the TechCrunch stage on June 15, 2022. The billionaire, known for his insightful analysis, was asked about NFTs (non-fungible tokens), these unique virtual items that are traded at a gold price with cryptocurrencies.

According to him, these NFTs would be just a ” asset class that exists under the principle of the greatest fool theory “, what does it mean ” someone will pay more money [pour cet actif] that I spent to acquire it. ” I have nothing to do with this concluded Bill Gates.

The theory of the greatest fool, or the greatest fool, is not a scientifically constructed concept, but it is a precept that emerges more and more in the economic and financial sphere in the age of cryptocurrencies. This idea is that a buyer would be ready to buy an asset for an amount greater than its real value, because he is convinced that he can resell it even more expensive, to someone who will be persuaded himself to sell it at a higher price …

Bill Gates lashes out against NFT speculation

For those familiar with the mechanics of the stock market, it is difficult not to stress the irony of such a statement, because this theory could apply to so many players in the stock market, in the current neoliberal system that governs the Western world. Many investors, who might be called “short-term investors”, buy shares only to get a higher selling value. Some even bet on the decline in stocks to get rich, without developing any interest in the intrinsic value of the asset in question.

However, there is a difference between speculating on real estate or companies and speculating on NFT. This is what Bill Gates quotes: I’m more used to companies making things or products. Like farms, for example! has simplified, to explain the concrete absence of any intrinsic value to virtual images.

An NFT is a visual that is considered unique: it is an image that has a virtual seal of authenticity. This “seal” is a sequence of numbers that corresponds to its registration in the blockchain, a virtual public ledger managed by millions of computers in a decentralized way.

The “Bored Apes Yacht Club” NFTs for sale on OpenSea // Source: OpenSea

The (temporary?) End of the hiatus for cryptocurrencies

The “greatest fool” theory has been used for several years to talk about the phenomenal rise in value of bitcoin, the most popular cryptocurrency whose price skyrocketed first in 2017 and then again in 2021. While some praise the qualities intrinsic to this crypto-asset (based on a decentralized protocol that allows both anonymous and public transactions), most bitcoin investors have seen it above all as a way to get rich, seeing its price increase. By purchasing cryptocurrencies, they have increased their virtual value higher and higher.

After months of dramatic rises, 2022 marked the end of playtime: the cryptocurrency market entered bear market (a sharp and lasting drop), and bitcoin’s drop is set to last for a while. Some believers, however, see this as a positive sign: a sort of “purge” of short-term investors who were only there to get rich quick, leaving only bitcoin holders who truly believe in the technology and its potential.

On the NFT side, the debacle is less evident for the moment, although some signs are starting to emerge. The entrepreneur who bought the NFT from the first tweet for $ 2.9 million, for example, tried to resell it less than a year later, for 15 times its price, but the offers failed. While it is too early to say that this is the end of NFTs, these virtual objects are only understood and acclaimed by narrow communities with different motivations. They are opposed by many skeptics, including Bill Gates, who criticizes both the speculative ecosystem, but also the disproportionate ecological impact of cryptocurrency mining, necessary for the exchange of NFTs.

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