The founder of the American corporation Microsoft has been recognized as the richest man in the world more than 20 times, and as of December 2021 he is ranked 4th in the rating with a value of $135 billion. Bill Gates (one of the leaders of the IT sector and public figure) is interested in cryptocurrency not only from the point of view of its impact on the financial industry, but also on the ecological situation in the world. Proof-of-Work consensus mining of digital coins requires a lot of computing power, which consumes a lot of electricity.
Bill Gates’ opinion on bitcoin
Back in 2018, the billionaire spoke out about Bitcoin as an unreliable speculative instrument that belongs to the class of nothing-creating assets. In 2021, his rhetoric changed: now his position has shifted from categorical to neutral. He still does not advise private investors to invest in digital assets because of high volatility and the possibility of losing all their money, but recognizes that blockchain technology can bring huge benefits to society, not only in the financial sector.
Criticism
According to Bill Gates, bitcoin’s main problem is the high energy cost of conducting a transaction. Within the cryptocurrency’s algorithm, there is a mechanism in place to make mining more difficult as the overall computing power of the network grows. This is done on purpose so that a new block is generated not earlier than 10 minutes. The calculation of the hash itself does not carry a useful load, it is needed only for the integrity of the data chain and the introduction of new information into the register.
About 98 terawatt-hours are spent annually to mine bitcoin, which is more than the electricity demand of the entire New Zealand. Naturally, such volumes leave a huge carbon footprint and harm the environment in the form of increased greenhouse gases due to the burning of coal and fuel oil to generate electricity in thermal power plants.
Praise
Shifting from a sharply negative stance to a neutral one, Bill Gates recognized that cryptocurrencies reduce cross-border barriers and allow digital money to circulate freely around the world. High transfer speeds and small fees bring the economies of all countries closer together on the road to shared globalization. The importance of blockchain technology itself is also emphasized, which makes recorded information immutable through multiple copying to computers and cryptographic protection.
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Examples of the application of cryptocurrencies in different industries are shown in the table.
| Scope | How it can be used |
|---|---|
| Healthcare | Blockchain will allow hospitals to share access to electronic patient records and other documentation without compromising data security and integrity. It will also make it possible to track medication dispensing and verify doctors’ licenses. |
| Banking | Technology will provide a secure and cheap way to send payments. It will remove the need for third-party verification and reduce the processing time of traditional banking transactions. Plus, cross-border transfers will become more affordable. |
| Insurance | Blockchain will improve risk analysis, automate document verification processes and speed up claims settlement |
| Philanthropy | The technology will ensure accountability and transparency of charitable donations. It will also have a positive impact on tracking irregularities in the distribution of collected funds (when money does not reach those for whom it was intended). |
Some companies have started to introduce a token system to track the production process and delivery of materials from the supplier. This helps to raise the quality level of goods and find the source of problems that arise.
Developing your own cryptocurrency
In early 2021, Gates announced that his foundation would begin developing new digital money with low fees. This eventually led to a large grant from the Mojaloop Foundation to create interoperable virtual payment systems. These should enable seamless and accessible transactions between individual users, banks, government businesses and merchants, mobile network operators, vendors and technology companies. The goal is to connect underserved people to the digital economy. As of the end of 2021, it is unknown whether this development will remain at the level of data technology or become a cryptocurrency.
Frequently Asked Questions
❓ When and by whom was bitcoin invented?
The world’s first cryptocurrency appeared in 2009, and its author is believed to be an unknown developer named Satoshi Nakamoto.
💰 Where can I buy BTC?
You can buy coins using exchanges, exchangers, Telegram bots. When choosing a method, the volume of trading, the size of commissions and customer feedback are important.
🔎 Does Bill Gates own cryptocurrency?
According to the billionaire’s own statement, as of December 2021, he does not invest in or own digital assets (bitcoin and others).
✅ Are large companies using blockchain?
Microsoft is developing a SQL Azure database registry and introducing cryptographic verification of business processes within a trusted centralized system to reduce costs and increase productivity inherent in a decentralized network.
💡 How to reduce power consumption in mining?
By changing the consensus method of the network from PoW to PoS, cryptocurrency miners significantly reduce the need for high computing power. Miners are replaced by validators, and the energy intensity of the network falls.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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