How Bill Gates was attracted to Bitcoin

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. Wences 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. 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. He 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. The famous M-Pesa system allowed Kenyans to hold and spend money on their cell phones, but charged a fee each time.

“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. He 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.

“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.

“You know what? 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. Not long after that, Gates made his first public comments praising at least some of the concepts behind Bitcoin, if not the anonymity.
And 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)

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