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

The billionaire and philanthropist assured that he “had nothing to do” with NFTs, these unique virtual images, which are exchanged at a price of gold, but whose usefulness is becoming more and more disputed.

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

According to him, these NFTs would only be a ” asset class that exists according to the principle of the greatest fool theory “, meaning ” someone will pay more money [pour cet actif] which I used to acquire it. ” I have nothing to do with it concluded Bill Gates.

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

Bill Gates rejects speculation about NFTs

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

However, there is a difference between speculating in real estate or businesses and speculating in NFTs. This is what Bill Gates mentions: I’m more used to companies creating things or products. Like farms, for example! he simplified to explain the concrete absence of any inherent value to virtual images.

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

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

The (temporary?) End of the depression for cryptocurrencies

The theory of “biggest fools” has been used for several years to talk about the phenomenal rise in the value of bitcoin, the most popular cryptocurrency, whose price first rose in 2017 and then again in 2021. While some praise the inherent qualities of this cryptoactive (based on a decentralized protocol that allows transactions that are both anonymous but public), the majority of bitcoin investors have primarily seen it as a way to get rich as they see the price increase. By buying cryptocurrencies, they pulled their virtual value ever higher.

After months of dramatic increases, 2022 heralds the end of playing time: the crypto market has entered a bear market (a sharp and lasting decline), and the decline of bitcoin is likely to last for some time. Some believers, however, see it as a positive sign: a kind of “cleansing” of short-term investors who were only there to get fast, leaving only bitcoin owners who truly believe in the technology and its potential.

On the NFT side, debacle is currently less obvious, although certain signals are starting to emerge. The contractor, who had bought the NFT for the first tweet for $ 2.9 million, for example, tried to resell it less than a year later at 15 times the price, but bids flopped. While it is too early to say that this is the end of NFTs, these virtual objects are understood and celebrated only by limited communities with different motives. Opposite them are many skeptics, including Bill Gates, who criticize both the speculative ecosystem but also the disproportionate ecological impact on the mining of cryptocurrencies needed to exchange NFTs.

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