“The Biggest Fool Theory”: Bill Gates Takes Away NFTs

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

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

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

The greatest fool, or the greatest fool theory, is not a scientifically constructed concept, but it is a prescription that is increasingly popping up in the economic and financial spheres in the era of cryptocurrency. This idea is that a buyer would be willing to buy an asset for an amount greater than its true value because he believes he can resell it for even more money to someone who is persuaded to buy it for more. to sell. †

Bill Gates Protests Speculation Around NFTs

For anyone familiar with the mechanics of the stock market, it’s hard not to underline the irony of such a statement, as this theory could hold true for a great many stock market actors, in the current neoliberal system that rules the Western world. Many investors, who might be called “short-term investors,” buy stocks only to get a higher resale value. Some even bet on falling 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 NFTs. This is the one Bill Gates mentions: I’m more used to companies that make things or products. Like farms for example! he simplified, to explain the concrete absence of any intrinsic value in virtual images.

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

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

The (temporary?) end of the crypto recess

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 rose first in 2017 and then again in 2021. While some may deny the intrinsic qualities of this crypto- asset pricing (based on a decentralized protocol that allows for transactions that are both anonymous and public), most bitcoin investors have seen it primarily as a way to get rich given its price rise. By buying cryptos, they pulled their virtual value higher and higher.

After months of dramatic gains, 2022 has heralded the end of playtime: the crypto market is a bear market (a sharp and lasting decline), and bitcoin’s fall is likely to continue for a while. However, some believers see it as a positive sign: a sort of “purge” of short-term investors who were only there to get rich quick, leaving only bitcoin owners who truly believe in the technology and its potential.

On the NFT side, the debacle is less clear at the moment, even as certain signals are starting to emerge. For example, the entrepreneur who bought the NFT from the first tweet for $2.9 million tried to resell it less than a year later, for 15 times the price, but the bids flopped. Even if it’s too early to say that this is the end of NFTs, these virtual objects are only understood and praised by limited communities with different motivations. Opposite them are many skeptics, including Bill Gates, who has criticized both the speculative ecosystem and the disproportionate environmental impact of mining cryptocurrencies needed to exchange NFTs.

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