NEW YORK (InsideBitcoins) — Bill Gates has been all over the news lately due to the release of the 2015 Gates Annual Letter. This year’s letter focused on the idea that the standard of living for people in the poorest countries around the world will improve over the next 15 years more than it has at any other point in human history.

One of the technologies listed as a possible catalyst for this improvement in living conditions is mobile banking. While some in the bitcoin community have assumed that this means Bill Gates is a fan of bitcoin, that’s not entirely true. The Verge was able to ask Gates about bitcoin specifically in a recent interview with the Microsoft mogul, and he had three main criticisms to share with the public.

Poor people cannot currently rely on bitcoin

“The effort to make sure your bitcoin provider isn’t going to lose your money and your understanding of the volatility of bitcoin — I’d hardly say that it’s ready for, you know, poor people to have it go up and down by a factor of two and, you know — ‘Oops, I was at Mt. Gox. Now that’s not good. Now I’m at Bit-whatever.’”

This first issue Gates sees with bitcoin can be broken up into two separate categories: bitcoin bank thefts and volatility. One of the main benefits of cryptocurrency is supposed to be that you have the power to be your own bank. The main issue with this in any poor nation is that you need to have the right tools to secure your own digital bank. These sorts of tools, such as multisig addresses and hardware wallets, are only now becoming available to the general public, and it could take quite some time for them to become affordable for the developing world. Of course, it should be noted that bitcoin banks aren’t as much of an issue if they’re fully insured.

Gates’s other main issue having to do with trust in bitcoin, volatility, is also a fair point at this point in time. Although many bitcoin enthusiasts like to point out the troubled fiat currencies found in Venezuela, Russia, and Argentina, the reality is that bitcoin does not offer much of an improvement for someone living on the tightest of budgets — at least not right now. It’s possible that smart contracts for hedging built on top of bitcoin could help limit volatility in the future, but we’re not at the point where bitcoin is an obvious choice for someone looking to preserve the value of their income and savings.

Lack of transaction reversals

“So that basic technology shows that digital can do these things very cheaply, and the fees that have been building up over time won’t stand up even for small transactions. Now making sure that the thing is fraud-resistant and that money can be refunded – there’s somebody that you call up if you think you transferred to the wrong account or your account balance is not what you’d expect.”

There are pros and cons to the irreversible nature of bitcoin, but it should be pointed out that the possibility for refunds can be built on top of the base protocol. If someone wishes to pay an extra escrow fee to make sure that they can reverse a transaction after it has been sent, there is nothing stopping that platform from being built tomorrow. One unique property of bitcoin is that it separates the escrow agent from the payment platform. If you use PayPal for payments, you also have to use their escrow service. In the case of bitcoin, the competition between escrow services is unlimited. Multisig transactions can also ensure that the escrow agent cannot run off with the money — although he or she could still collude with one party.

Potential Anonymity

“Also governments, for most transactions, will want attribution, that is, the idea of a system where you can’t see — is that drug money, is it terrorist money? Should that be taxed? You’re going to have some tension between the attributed systems like credit card [or] debit card systems where there’s actually a record of who’s engaging and the purely anonymous ones. The one where I see it getting to critical mass, along with the government regulatory support we need is where it’s attributed; where we can see who actually did this transaction.”

Although he doesn’t make a political statement on whether or not anonymous digital transactions should be allowed, Gates does point out that payment systems with transparency will be preferred by regulators. The viability of a government ban on bitcoin still needs to be tested, but the blessing of governments could certainly give other forms of digital currency, such as the mobile debit card systems endorsed by Gates, an edge over cryptocurrency.

Overall, it seems that Gates has made some fair criticisms of bitcoin, and it will take some time to see if these issues can be solved by the thousands of developers currently working on projects related to the digital currency. You can watch The Verge’s full interview with Bill Gates below:

You can follow @kyletorpey on Twitter.

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