I have just finished reading Nathaniel Popper‘s book, Digital Gold (2015).The book is an intriguing inside story of the Bitcoin community and discusses key figures who are trying to reinvent money with Bitcoin.There are many passages in the book that, I think, will forever stick with me.In this post, I would like to share one such passages.The passage I have in mind is the ending part of the book in which Popper discusses how Bill Gates was attracted to Bitcoin through a conversation he had with Wences Casares, an Argentinian technology entrepreneur who had founded Argentina’s first internet service provider.Through his many connections with high profile people in Silicon Valley, Wences Casares was already able to convince the likes of Max Levchin, Marc Andreessen, David Marcus, Reid Hoffman and many more of the promise of Bitcoin.According to Popper, Wences Casares’ conversation with Bill Gates went like this: At the Allen & Co.conference, Wences was given one of the speaking slots before Jeff Bezos and Warren Buffett took the stage.

Wences gave what was becoming a standard talk, beginning with the history of money, and going on to discuss the potential for Bitcoin to provide financial services to poor people who had long been shut out.He touched on Xapo [Wences’ latest Bitcoin startup] only briefly, at the end.After Wences came down and took a seat with Belle [Wences’ wife], Bezos said from the stage that it was the kind of talk that kept him coming to these events.In the hallway walking to lunch, after the Bezos-Buffett conversation, Wences spotted Bill Gates, who had been notably reticent about Bitcoin.bitcoin in austin texasWences knew that Gates’s multibillion-dollar foundation had been making a big push to get people in the developing world connected financially, and Wences approached him to explain why Bitcoin might help his cause.bitcoin 10k

As soon as Wences broached the topic, Gates’s face clouded over, and there was a note of anger in his voice as he told Wences that the foundation would never use an anonymous money to further its cause.Wences was somewhat taken aback, but this was not the first time he had been challenged by a powerful person.He quickly said that Bitcoin could indeed be used anonymously—but so could cash.And Bitcoin services could easily be set up so that users were not anonymous.ethereum trend priceHe then spoke directly to the work that Gates was doing, and noted that the foundation had been pushing people in poor countries into expensive digital services that came with lots of fees each time they were used.bitcoin litecoin capitalizationThe famous M-Pesa system allowed Kenyans to hold and spend money on their cell phones, but charged a fee each time.bitcoins gra

“You are spending billions to make poor people poorer,” Wences said.Gates didn’t just roll over.He vigorously defended the work his foundation had already done, but Gates was less hostile than he had been a few moments earlier, and seemed to evince a certain respect for Wences’s chutzpah.Wences saw the crowd that was watching the conversation, and knew he had to be careful about antagonizing Bill Gates, especially in front of others.But Wences had another point he wanted to make.bitcoin does not syncHe knew that back in the early days of the Internet, Gates had initially bet against the open Internet and built a closed network for Microsoft that was similar to Compuserve and Prodigy—it linked computers to a central server, with news and other information, but not to the broader Internet, as the TCP/IP protocol allowed.bitcoin sports betting usa

“To me it feels like you are trying to get the whole world connected with something like Compuserve when everyone already has access to TCP/IP,” he said, and then paused anxiously to see what kind of response he would get.What he heard back from Gates was more than he could have reasonably hoped for.I told the foundation not to touch Bitcoin and that may have been a mistake,” Gates said, amicably.“We are going to call you.” After Wences got back to California, he received an e-mail from the Gates Foundation, looking to set up a time to talk.kraken bitcoin feesNot long after that, Gates made his first public comments praising at least some of the concepts behind Bitcoin, if not the anonymity.linux live usb bitcoinAnd so Bitcoin and its believers attracted one more person who was willing to give this new technology a look, and remain open to the possibility that the whole thing wasn’t, at least, entirely crazy.

There are not many online videos of Bill Gates discussing Bitcoin.Interestingly, in this video, we can find him comparing Bitcoin to currency and asserting that “Bitcoin is better than currency”: Source Nathaniel Popper – Digital Gold: Bitcoin and the inside story of the misfits and millionaires trying to reinvent money (2015) Share this:Like this:Why are we giving Bitcoin house room?Surely it is akin to a counterfeiting scam promoted by people who like the idea of their computer making them rich without lifting much more than a finger?The story on Wednesday of the Newport IT worker James Howells who threw away a hard drive with £4m worth of Bitcoins stored on its memory is a case in point.If Howells had set up a printing press in his bedroom and run off a whole bundle of banknotes, only to throw away the suitcase he stored them in, sympathy would evaporate and the police would pay a call.Of course, Howells is no fraudster, yet somehow, because he generated the money based on computer programs designed in the hallowed confines of Silicon Valley tech offices, the process is deemed, at least by some people, as a legitimate way of generating funds.

As an article by my colleague Alex Hern described earlier this week, Bitcoin is being taken seriously in the US Congress, by US central bank boss Ben Bernanke and by some larger commercial businesses, notably Virgin.So why do we need Bitcoin?Is there something about existing currencies, or even the lack of a global currency, that makes Bitcoin attractive?Likewise, is there something about the way we buy and sell electronically at the moment – the speed and the cost – that can be made faster and cheaper by a new electronic currency?As an aside, these questions reinforce my general view that graduates of Stanford, MIT and Cambridge – to name just three science-oriented universities – are potential weapons of mass financial destruction, adopting the term used by Warren Buffett when asked to describe the mortgage derivatives behind the Lehman Brothers crash (he said they were WMFDs).Where once these graduates were small in number and locked in a room with the letters NASA on the door, these excessively clever people (I didn't say worldly or wise) are now appearing in their millions, bored and restless and in search of a quick way to grab the kind of fortune that buys a mansion and a big car.

More central to the argument, the drive to create a peer-to-peer currency that operates outside the existing authorities and exchanges is the same one that encouraged investment banks to devise peer-to-peer trading platforms away from the central exchanges in London, New York and Tokyo.These exchanges were deemed to be slow and subject to excessive charges.They were regulated by government or quasi-government agencies and sometimes subject to taxes.When governments refused to back radical reform, the JP Morgans and Citibanks took their trading to these so-called dark pools where no regulator could see what was going on.Five years after the financial crisis there is still a debate about size, scope and legitimacy of a global trade that the Bank of England's deputy governor Charlie Bean has said could create "a serious problem".Regulators say they are worried about the growth of shadow banking as much in China as in the US and Europe (China has its fair share of restless, clever graduates).

They should be equally worried about Bitcoin.Regulation is annoying and banks can charge too much for processing transactions, but that is not a justification for a shadow currency with the potential, should it be allowed to proliferate, to wobble and crash.The Bitcoin early adopters and the people who are currently using computer programs to "mine" Bitcoins want a new currency so they can make trading profits from doing nothing other than trading.There is no higher motive.In the early days of its operation individuals can go bust – so who cares?They took the risk of a collapse in the currency's value (so far it has only gone from $1 to $1,000 in its five-year life).But once institutions are trading with other people's money – pension money – then it becomes serious when losses occur.Before you know it there will be a clamour for regulation and the regulators will impose charges to cover their costs, place restrictions on trading and possible apply a tax.And the reaction from the Bitcoiners?