Bill Gates Explains Why Bitcoin Won’t Help the Poor
Friday, January 30, 2015
According to the World Bank, approximately 2.5 billion people (roughly half of the world’s adult population) does not have a bank account due to reasons such as lack of money, high fees, long distances, and complicated paperwork.
Bill Gates believes that digital currency has huge potential to help people access financial services. In his Reddit “Ask Me Anything” thread today, Gates said, “Bitcoin is an exciting new technology.”
However, he said that the Bill & Melinda Gates Foundation does not help the poor using bitcoin.
Two reasons why Bitcoin won’t help the poor
His first reason was that the value of bitcoin is too volatile compared to most people’s local currencies. The large downswings in the cryptocurrency’s value make it likely a person to lose money. For example, the bitcoin price has fallen by -9.37% in the last 24 hours, and -56.82% in the last 6 months. This volatility prevents it from being used as a store of value.
The second reason Gates cited was that transactions made with bitcoin cannot be reversed. Payments that are made with bitcoin can only be returned by the person or company they were sent to. Small mistakes could end up being very costly, especially for those living in poverty. Gates also added that “anonymity doesn’t work”, because there is no personal information linked to a bitcoin address that can be used to contact its owner.
However, Gates recognized that some digital currencies could still benefit the world’s unbanked.