Tag Balaji

“You buy 1 BTC. I will send $1M USD.”

Those were the stakes that venture capitalist Balaji Srinivasan proposed over Twitter to pseudonymous writer and self-described “tax enthusiast” James Medlock on March 17. The bet? Within 90 days, one bitcoin will be worth $1 million.

Medlock, who had jokingly tweeted earlier that he would “bet anyone $1 million dollars that the US does not enter hyperinflation,” quickly accepted the terms. With bitcoin hovering around $26,000, Srinivasan had made an approximately 38–1 wager that “hyperbitcoinization” would unfold over the next three months as the Federal Reserve devalued the U.S. dollar to backstop the nation’s shaky banks with new infusions of cash.

Critics have said the bet is a promotional ploy to launch a new media brand or to pump the price of bitcoin to increase the value of his holdings. His doubters include George Mason University economist Tyler Cowen, who predicts that “the US will muddle through its current problems and patch up the present at the expense of the future,” and bitcoin mega-booster Saifedean Ammous, author of The Bitcoin Standard, who writes “I feel dirty sounding bearish on bitcoin, but I do not think bitcoin will hit $1m in 90 days & and I do not think the dollar can possibly hyperinflate this quickly.”

So what is Srinivasan thinking?

Find out this Thursday at 1 p.m. Eastern as Srinivasan joins Reason‘s Zach Weissmueller and economist Lawrence White, author of Better Money: Gold, Fiat, or Bitcoin? to discuss the bet and their analyses of the state of the U.S. banking system. Watch and leave questions and comments on the YouTube video above or on Reason‘s Facebook page.

Show notes:
Balaji Srinivasan’s bet with James Medlock—https://twitter.com/balajis/status/1636822077775941633

Federal Reserve to provide additional funds for banks, backstopped with $25 billion from the Treasury—https://archive.is/qrZYB#selection-4839.93-4839.251

Bloomberg: Fed could inject up to $2 trillion—https://www.bloomberg.com/news/articles/2023-03-16/jpmorgan-says-fed-s-loans-will-provide-2-trillion-of-liquidity

Study on uninsured bank deposits in 2023—https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4387676

Bloomberg: Fed discount window lending surpasses $164 billion -https://www.bloomberg.com/news/articles/2023-03-16/banks-rush-to-backstop-liquidity-borrow-164-8-billion-from-fed#xj4y7vzkg

St. Louis Fed: Fed balance sheet since 2004—https://fred.stlouisfed.org/graph/?id=WALCL

Tyler Cowen: The banking crisis won’t wreck the economy—https://marginalrevolution.com/marginalrevolution/2023/03/this-banking-crisis-wont-wreck-the-economy.html

Ammous Safeidean: A bank crisis is deflationary—https://twitter.com/saifedean/status/1638453109033664513

FedNow Service launches in July: https://www.federalreserve.gov/newsevents/pressreleases/other20230315a.htm

Jerome Powell addresses banking crisis and rate hikes—https://www.youtube.com/watch?v=WK6EfnYkejc

Janet Yellen voices concern for a ‘few’ banks—https://www.youtube.com/live/je-6S97KKqY?feature=share&t=4049

DeSantis announced Digital Bill of Rights—https://www.youtube.com/watch?v=mLPcqRS8978

In 2013, the serial entrepreneur Balaji Srinivasan gave a widely discussed talk at the tech incubator Y Combinator on a paradigm derived from the work of political economist Albert O. Hirschman. There are two basic paths to reform, he explained: You can speak up and remake a system from within (“voice”) or you can simply leave and build something new that might one day takes its place (“exit”).

That latter concept is the framework through which Silicon Valley tends to solve problems, and it captures the worldview of Srinivasan, whom venture capitalist Marc Andreessen says has “the highest output per minute of new ideas of anybody I’ve ever met in my life.”

In his new book, The Network State: How to Start a New Country, Srinivasan makes the case for migrating much—though not all—of our lives onto the internet while changing how we get together in meatspace. Ever-improving digital tools give humans an unprecedented and always-accelerating ability to create opt-in, fully voluntary communities where people choose to meet, work, live, and love.

From existing, terrestrial countries that are attracting immigrants with the promise of a better standard of living to blockchain communities that draw participants by laying out clear-cut, contractual rules, responsibilities, and obligations, Srinivasan articulates a future that is profoundly democratic and consensual—thus liberating us from a status quo in which self-determination is little more than a pipe-dream.

Raised in suburban Long Island, Srinivasan holds a Ph.D. in electrical engineering from Stanford. He co-founded the genetic testing firm Counsyl and served as the first chief technology officer of Coinbase, the cryptocurrency exchange. He’s been a fierce critic of the FDA, which might account for his being short-listed to head up the agency under President Donald Trump.

“What if this coronavirus is the pandemic that public health people have been warning about for years?,” he tweeted in January 2020, as Vox and mainstream outlets were busy attacking Silicon Valley venture capitalists for taking the crisis too seriously. “It would accelerate many pre-existing trends,” he wrote, “border closures, nationalism, social isolation, preppers, remote work, face masks, distrust in governments.”

I talked with Srinivasan about The Network State, the rise of China as a tightly centralized global power, and the future of freedom both online and offline.*

CORRECTION: The original version of this writeup mischaracterized Srinivasan’s opinion on whether Peter Thiel is part of the “descending class.”

• Better Help online therapy. Are you having trouble solving problems in your life? Start talking to a licensed therapist who won’t judge you but will listen and help you with your problems, whatever they are. Better Help is cheaper than most traditional forms of therapy and lets you talk with your therapist via chat, phone, or video—all within 48 hours of signing up and without the hassles of in-person appointments. Go here and get 10 percent off your first month as a listener to The Reason Interview With Nick Gillespie.

In 2013, the serial entrepreneur Balaji Srinivasan gave a widely discussed talk at the tech incubator Y Combinator on a paradigm derived from the work of political economist Albert O. Hirschman. There are two basic paths to reform, he explained: You can speak up and remake a system from within (“voice”) or you can simply leave and build something new that might one day takes its place (“exit”).

That latter concept is the framework through which Silicon Valley tends to solve problems, and it captures the worldview of Srinivasan, whom venture capitalist Marc Andreessen says has “the highest output per minute of new ideas of anybody I’ve ever met in my life.”

In his new book, The Network State: How to Start a New Country, Srinivasan makes the case for migrating much—though not all—of our lives onto the internet while changing how we get together in meatspace. Ever-improving digital tools give humans an unprecedented and always-accelerating ability to create opt-in, fully voluntary communities where people choose to meet, work, live, and love.

From existing, terrestrial countries that are attracting immigrants with the promise of a better standard of living to blockchain communities that draw participants by laying out clear-cut, contractual rules, responsibilities, and obligations, Srinivasan articulates a future that is profoundly democratic and consensual—thus liberating us from a status quo in which self-determination is little more than a pipe-dream.

Raised in suburban Long Island, Srinivasan holds a Ph.D. in electrical engineering from Stanford. He co-founded the genetic testing firm Counsyl and served as the first chief technology officer of Coinbase, the cryptocurrency exchange. He’s been a fierce critic of the FDA, which might account for his being short-listed to head up the agency under President Donald Trump.

“What if this coronavirus is the pandemic that public health people have been warning about for years?,” he tweeted in January 2020, as Vox and mainstream outlets were busy attacking Silicon Valley venture capitalists for taking the crisis too seriously. “It would accelerate many pre-existing trends,” he wrote, “border closures, nationalism, social isolation, preppers, remote work, face masks, distrust in governments.”

Reason talked with Srinivasan about The Network State, the rise of China as a tightly centralized global power, and the future of freedom both online and offline.*

CORRECTION: The original version of this writeup mischaracterized Srinivasan’s opinion on whether Peter Thiel is part of the “descending class.”

Produced by Nick Gillespie and Adam Czarnecki; Edited by Adam Czarnecki and Justin Zuckerman.

Credits:
Depo Photos/ZUMAPRESS/Newscom; Tolga Ildun/ZUMAPRESS/Newscom; Daniel Diaz/dpa/picture-alliance/Newscom; David Peinado/ZUMAPRESS/Newscom; Tim Wagner/ZUMAPRESS/Newscom; Richard B. Levine/Newscom; LAURENT CHAMUSSY/SIPA/Newscom; Yonhap News/YNA/Newscom; Li Gang / Xinhua News Agency/Newscom; James Lee/Newscom; Douliery Olivier/ABACA USA/Newscom; Kay Nietfeld/dpa/picture-alliance/Newscom; Sheldon Cooper / SOPA Images/Sip/Newscom; John Lamparski/Sipa USA/Newscom; Ron Adar / SOPA Images/Sipa USA/Newscom;
Creative Touch Imaging Ltd/ZUMA Press/Newscom; Mark Finkenstaedt/ZUMAPRESS/Newscom; Michaal Nigro/Michael Nigro/Pacific Press/Newscom