Bill Gates warns 'super risky' cryptocurrency has 'caused deaths in a fairly direct way'

Microsoft founder and billionaire philanthropist Bill Gates has gravely warned against the use of "super risky" cryptocurrency, saying the use of the virtual currency can be "deadly". In his sixth Reddit "Ask Me Anything" (AMA) session on Tuesday, 27 February, the world's second richest man weighed in on various topics, including his time at Microsoft, quantum computing, new ways to fight malaria, the best books he has read in 2018 so far, and more.

The 62-year-old was also asked about his thoughts on cryptocurrencies given the current hype and soaring value of digital currency, despite it being notoriously volatile.

Gates, however, said the anonymity of cryptocurrency – one of its key features – can be harmful and even "cause deaths".

"The main feature of cryptocurrencies is their anonymity. I don't think this is a good thing," Gates wrote. "The government's ability to find money laundering and tax evasion and terrorist funding is a good thing. Right now, cryptocurrencies are used for buying fentanyl and other drugs, so it is a rare technology that has caused deaths in a fairly direct way."

He also warned against unwise and reckless Initial Coin Offering (ICO) investment habits, saying "the speculative wave around ICOs and cryptocurrencies is super risky for those who go long".

When another Reddit user pointed out that people can also buy drugs like fentanyl using regular cash, Gates responded, "Yes – anonymous cash is used for these kinds of things but you have to be physically present to transfer it, which makes things like kidnapping payments more difficult."

Gates' latest comments on cryptocurrency comes in contrast to some of his earlier statements on Bitcoin and the technology behind it.

"Bitcoin is exciting because it shows how cheap it can be," he had told Bloomberg back in 2014. "Bitcoin is better than currency in that you don't have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient."

In another interview with Backchannel in 2015, he praised the technology behind Bitcoin, saying it can "make moving money between countries easier and getting fees down pretty dramatically". However, he noted at the time that "Bitcoin won't be the dominant system".

"We need things that draw on the revolution of Bitcoin, but Bitcoin alone is not good enough," he said.

Gates' latest remarks, however, have already triggered a wave of criticism from cryptocurrency fans, venture capitalists, developers and investors.

Gates is not the first notable billionaire to voice concerns about cryptocurrency.

In January, billionaire investor and Berkshire Hathaway CEO Warren Buffett said he would never buy Bitcoin.

"In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending," Buffett told CNBC. "Now, when it happens, or how, or anything else, I don't know."

He also noted that he does not understand Bitcoin and other similar digital assets.

"We don't own any, we're not short any, we'll never have a position in them," he added. "I get into enough trouble with the things I think I know something about. Why in the world should I take a long or short position in something I don't know about?"

At a Council on Foreign Relations event in November last year, famed investor Jack Bogle said, "Avoid bitcoin like the plague. Did I make myself clear?"

Tech billionaire and Dallas Mavericks owner Mark Cuban took a more cautious approach, however, saying it was OK to invest up to 10% of your savings in high-risk ventures such as Bitcoin or Ethereum after you set up an emergency fund only "if you're a true adventurer" and you "really want to throw the Hail Mary".

"But, if you do that, you've got to pretend you've already lost your money," he told Vanity Fair.