- Date : 27/07/2022
- Read: 2 mins
Why did Bill Gates, a non-believer of expensive digital images or NFT crypto, denounce cryptocurrencies as illusions “based on greater fool theory," renewing earlier criticisms of digital assets. According to this theory, expensive assets will increase in value as more individuals are prepared to spend on them.
What are cryptocurrencies?
Cryptography is used to safeguard cryptocurrencies, a type of online virtual currency. This indicates that they are pretty secure and impossible to duplicate or falsify. Cryptocurrencies are different from NFTs or Non-Fungible Tokens. They are blockchain-stored digital assets.
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How does NFT works?
Each NFTs has a unique reference code and set of data that makes it distinct from other NFTs and makes it possible to monitor and verify its owner. These asset classes can be purchased, traded, and exchanged more effectively by tokenising, which theoretically lowers the risk of fraud.
Here’s all you need to know about the NFTs:
What opinions does Bill Gates have about cryptocurrencies and NFTS, and why?
Gates stated that he desired to put money in funds with observable outputs, such as farms, industries, or businesses that manufacture goods, and that he had no viewpoint in digital currencies or NFTs. Gates was speaking at a TechCrunch event on changing climate. Gates commented that the world would be greatly improved by the expensive digital images of apes used in the NFT's Bored Ape Yacht Club initiative.
Tokens known as NFTs cannot be traded for one another. They are frequently promoted as a technique to establish ownership of digital goods like works of art or sports memorabilia. Analysts, however, believe that because cryptocurrencies are energy-intensive, they are overvalued and might even be bad for the environment. The network that supports ethereum, the second-largest coin, is the foundation for many NFTs.
Gates had accurately predicted volatility. Bitcoin was soaring in value when he spoke in 2021, but it sharply declined later in the year toward the end, according to the report.
The cryptocurrency industry has altered significantly since 2021. Gates was probably correct, though, as the price of cryptocurrencies has been falling recently. The price of Bitcoin has dropped significantly over the past few weeks. This mostly took place following last month's crash of the "stablecoin" Terra. In a related manner, NFT prices have also dropped significantly during the past several weeks.
Disclaimer: This article is for general information and should not be construed as insurance, investment, tax, or legal advice. You should separately obtain independent advice when making decisions in these areas.