(Kitco News) - Tim Berners-Lee, the man credited with inventing the World Wide Web, recently revealed that he is not a fan of cryptocurrencies, calling the asset class “dangerous” and likening crypto investors to gamblers during Friday’s episode of CNBC’s “Beyond The Valley” podcast.
The comments from Berners-Lee came during a discussion on the future of the internet, with the computer scientist saying that digital currencies are “only speculative” and comparing the growth of the crypto industry to the dot-com bubble where internet stocks with little to no fundamental value became highly inflated.
“It’s only speculative. Obviously, that’s really dangerous,” Berners-Lee told CNBC. ”[It’s] if you want to have a kick out of gambling, basically. Investing in certain things, which is purely speculative, isn’t what, where I want to spend my time.”
While he is not a fan of the sector in general, Berners-Lee acknowledged that one area where digital currencies could be useful is in facilitating remittances, but said that such transfers would need to be immediately converted back into fiat once they have been received.
The British computer scientist has been unsatisfied with the direction of development of the World Wide Web since he was credited with its invention in 1989, and he is now looking to reshape the future of the internet through his startup Inrupt, with the goal of giving people more control of their data.
Many in the crypto industry are focused on the development of Web3, a decentralized version of the internet that runs on blockchain technology and takes away some of the power from companies like Google and Facebook that currently dominate the market.
Berners-Lee prefers to think of the future of the internet as Web 3.0, which he differentiates from Web3. “It’s not blockchain,” Berners-Lee said, suggesting the technology isn’t fast or secure enough.
His comments echo recent statements from Federal Reserve Board Governor Christopher Waller, who said that crypto-assets are nothing more than speculative assets, and are similar to baseball cards. Waller also acknowledged that there are some potentially beneficial applications of blockchain technology – like smart contracts and tokenization – but stressed that most cryptocurrencies have no intrinsic value and are risky investments.
"If people want to hold such an asset, then go for it," Waller said. "However, if you buy crypto assets and the price goes to zero at some point, please don't be surprised and don't expect taxpayers to socialize your losses."
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| Charlie Munger: The U.S. 'should ban crypto,' it's a 'gambling contract' |
Berkshire Hathaway Vice Chairman Charlie Munger also doubled down on his negative view of cryptocurrencies, saying in a recent op-ed published in The Wall Street Journal on Feb 1, "It isn't currency. It's a gambling contract with a nearly 100% edge for the house."
The gambling mentality is being encouraged by the lack of regulation in the sector, he added, noting that in recent years privately owned companies issued thousands of new cryptocurrencies in the U.S., which became publicly traded without any governmental pre-approval of disclosures.
"Such wretched excess has gone on because there is a gap in regulation," he said. "A cryptocurrency is not a currency, not a commodity, and not a security. Instead, it's a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity. Obviously the U.S. should now enact a new federal law that prevents this from happening."
Both Munger and Warren Buffett, the CEO of Berkshire Hathaway, are well known for their hard-line anti-crypto stance. Previously, Buffett referred to bitcoin as “rat poison squared” and said that not only does it do nothing and is backed by nothing, but it costs something to buy nothing.
