Quantum

Bitcoin

Satoshi

Billionaire venture capitalist and entrepreneur <a href="https://www.thestreet.com/crypto/markets/billionaire-warns-of-gold-rivals-structural-flaw" rel="noopener noreferrer nofollow">Chamath Palihapitiya</a> used to be one of the most bullish voices on Bitcoin (BTC).&nbsp;In January 2021, he <a href="https://www.youtube.com/watch?v=o4JEVCLJxDw" rel="noopener noreferrer nofollow">had predicted</a> that the leading cryptocurrency would hit $200,000.&nbsp;
But over the years, he has become increasingly skeptical of the asset. When tech entrepreneur Peter Diamandis recently asked him if Bitcoin is cooked, the billionaire gave a stark answer.
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 Grayscale's head of research: Quantum computing is 'just another hurdle' Bitcoin will clear (3:10)
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<h2 id="chamath-palihapitiya-s-changing-views-on-bitcoin">Chamath Palihapitiya's changing views on Bitcoin</h2>
After spending a few years leading advertising and growth at Facebook,&nbsp;Palihapitiya founded a VC firm called Social Capital in 2011.
He has launched several high-profile special-purpose acquisition companies (<a href="https://www.thestreet.com/crypto/markets/billionaire-chamath-palihapitiya-drops-a-banger-says-wall-street-backs-his-spac-comeback" rel="noopener noreferrer nofollow">SPACs</a>) as the Social Capital founder, earning the moniker "SPAC King."
A SPAC is a publicly traded shell company that is created with the sole purpose of acquiring or merging with a private company to quickly take it public.
Among the leading tech investors,&nbsp;Palihapitiya used to be extremely bullish on Bitcoin a few years ago.
When Bitcoin was trading around $130 in May 2013,&nbsp;he <a href="https://www.bloomberg.com/opinion/articles/2013-05-30/bitcoin-the-perfect-schmuck-insurance" rel="noopener noreferrer nofollow">argued</a> that it's "gold 2.0" and provides an "insurance"&nbsp;against uncertainty created by the 2008 economic crisis.
<blockquote>
 "I personally think that Bitcoin is already superior to gold."
</blockquote>
He even recommended that it's "entirely rational" to allocate 1% of one's assets to Bitcoin, revealing he had done so.
When Warren Buffett <a href="https://www.cnbc.com/2018/05/05/warren-buffett-says-bitcoin-is-probably-rat-poison-squared.html" rel="noopener noreferrer nofollow">called</a>&nbsp;Bitcoin "probably rat poison squared" in 2018, Palihapitiya <a href="https://www.cnbc.com/2018/05/09/palihapitiya-i-am-a-buffett-disciple-but-hes-wrong-about-bitcoin.html" rel="noopener noreferrer nofollow">said</a>&nbsp;that though he was a "disciple" of the veteran investor, the Berkshire Hathaway boss was wrong about the cryptocurrency. 
In an interview in January 2021, he <a href="https://www.youtube.com/watch?v=o4JEVCLJxDw" rel="noopener noreferrer nofollow">predicted</a> that Bitcoin will eventually hit $200,000 because it's a hedge against uncertainty.
But he is not so certain about Bitcoin anymore.
In March this year, he <a rel="noopener noreferrer nofollow">said</a> in a podcast that&nbsp;Bitcoin's inherent design could make it difficult for central banks to adopt it. The asset lacks&nbsp;fungibility and privacy, the two features he considers essential for central bank accumulation.
Bitcoin's transaction record is very transparent. If a coin has a history of association with criminal or sanctioned&nbsp;actors, it won't be treated just like any other coin and an institution could refuse to accept it, he explained. Similarly, its&nbsp;transparent ledger makes it very difficult for governments to keep their transactions private, he warned.
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<h2 id="is-bitcoin-cooked">'Is Bitcoin cooked?'</h2>
On Oct. 22,&nbsp;Palihapitiya&nbsp;<a href="https://www.youtube.com/watch?v=kAwG9E1W_ME&amp;t=6428s" rel="noopener noreferrer nofollow">appeared</a> in the "Moonshots with&nbsp;Peter Diamandis" podcast in which the host asked what the billionaire thought of Bitcoin in the face of the "meteoric rise" of&nbsp;artificial intelligence (AI).
Palihapitiya&nbsp;reiterated his argument that Bitcoin's lack of&nbsp;fungibility stops it from being adopted by central banks.
<blockquote>
 "So, it's capped from that perspective."
</blockquote>
Addressing the risk posed by AI, he said a bad actor could take advantage of self-improving AI models to&nbsp;target Bitcoin’s SHA-256 security and even hack the Bitcoin developer Satoshi Nakamoto’s wallet.
SHA-256 is a mathematical function called a cryptographic hash function that&nbsp;turns any digital information&nbsp;into a fixed-length output of 256 bits, usually shown as a 64-character hexadecimal string. But&nbsp;Palihapitiya&nbsp;warned AI hacks could break the SHA-256 function and hack Bitcoin in the future.
Not only that, the hacker can then take a short position on Bitcoin before announcing the hack and make the money twice, he expressed his concern.
It is imperative that Bitcoin should transition to quantum-secure, quantum-resistant cryptographic mechanisms but it's impossible in a community that "can't even agree where to meet," he decried.
<blockquote>
 Diamandis:&nbsp;"Do you think Bitcoin is cooked?"
 Palihapitiya:&nbsp;"I just think it's capped, and then I think eventually it gets hacked and then it goes to zero."&nbsp;
</blockquote>
When the host asked the investor if he owns Bitcoin, he revealed that he transferred his Bitcoin holdings to a company&nbsp;called the Digital Currency Group in exchange for&nbsp;equity.
Palihapitiya said it was much better for him to get rid of the custody and security risks than have direct crypto exposure.
<figure><a href="https://app.decibel.trade/trade/BTC-USD" rel="noopener noreferrer nofollow"></a>
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 BTC/USD, Source: Decibel
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Bitcoin was exchanging hands at $81,160 at the time of writing, <a href="https://app.decibel.trade/trade/BTC-USD" rel="noopener noreferrer nofollow">as per Decibel</a>.
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'Is Bitcoin cooked?' Chamath Palihapitiya gives a stark answer

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