Bitcoin is an "exciting new technology" but Bill Gates doesn't think it's a proper tool for the world's roughly 2.5 billion 'unbanked' poor.



"We don't use bitcoin specifically for two reasons," Gates said Wednesday during a Reddit 'Ask Me Anything' session. "One is that the poor shouldn't have a currency whose value goes up and down a lot compared to their local currency. Second is that if a mistake is made in who you pay then you need to be able to reverse it so anonymity wouldn't work."



Those are "valid criticisms," according to Wall Street Journal reporter Paul Vigna, but should not detract from bitcoin's huge potential to fundamentally change the world of finance.



Bitcoin is "one of the most powerful innovations in finance in the past 500 years," Vigna and co-author Michael Casey argue in their new book: The Age of Cryptocurrency. (Coincidentaily, the authors did their own Redditt AMA today which can be found here.)



In the accompanying video, Vigna compares bitcoin to the "horseless carriage" in the late 19th century. "This thing was just invented," he says of the digital currency. "We are just figuring out what can be done with this. They are just starting to build it."



Indeed, bitcoin has come a long way since its launch in late 2008: More than 82,000 merchants currently accept bitcoin, including Microsoft, and global usage of the currency averaged $50 million a day in 2014, The WSJ reports. Coinbase, the first U.S.-based bitcoin exchange, just launched this month after receiving $75 million in backing from investors including the NYSE and Spain's Banco Bilbao. And the Winkelvoss twins have committed to launch their own exchange, Gemini, which they claim will be 'the Nasdaq of Bitcoin'.



"What most excites these" -- and other investors like tech legends Marc Andreesen and Reid Hoffman -- "is bitcoin's promise as a platform whose future applications are almost unimaginably broad," Casey and Vigna write. "Already, hundreds of specialized apps are being built on top of the digital-currency blockchain software, which is seen in this context as a kind of base operating system."



Bitcoin's benefits -- including transaction speed and anonymity -- and its potential to disrupt the current system where banks serve as financial intermediaries, aka middle men -- have been widely discussed and debated.



But what about the price? Bitcoin fell over 60% vs. the dollar in 2014, which also saw the bankruptcy of one of its biggest exchanges, Mt. Gox. This year didn't start much better in terms of price; an early drop to start the year left bitcoin, at its recent nadir, more than 80% below its 2013 high.



"The market is volatile because it is very thin and it is still being built," Vigna explains. "If [bitcoin] keeps growing, if it keeps building the price will smooth itself out. It will become a more stable currency as more people use it. And you’ll see that [volatility] go away and then they will build the rest of the products around it. The biggest thing is these are very early days for this. This is a very, in my mind, it’s a very exciting technology."



On that, at least, Vigna and Gates are in agreement.









































What do you think? Is bitcoin a scam? A flash in the pan? A profound advance in currency? Something in between? Let us know in the comments section below or reach out to me on Twitter: @aarontask