A very theatrical Bitcoin bet collapses

A gentleman’s bet for the crypto world was solved this week — and not to the benefit of the Bitcoin booster that triggered it.

Back in March, my colleague Ben Schreckinger reported on a bet between gadfly venture capitalist Balaji Srinivisan and pseudonymous economics blogger James Medlock. The terms: Srinivasan bet Medlock that 1 Bitcoin, then (and still) hovering just below $30,000, would be worth more than $1 million in 90 days as a result of cataclysmic “hyperinflation.”

It’s possible Srinivasan really thought it would happen in the immediate aftermath of Silicon Valley Bank’s collapse. And it’s possible he just wanted to pump up the value of Bitcoin and take a theoretical loss on the bet with gains in its overall value. (Read Ben for more on that.)

However, it is also possible that he was righteous crap posting in the brash, consequence-free manner that is almost a requirement for participating in the Bitcoin community—an act that has subtly turned the tide of history in the modern Internet era.

But hold that thought. Whatever Srinivasan’s motivation, he lost the bet on Monday. (Inflation modestly reduced in March.) Or rather, he surrendered, 45 days before the expiration date – “The million dollar venture is now closed by mutual agreement” he tweeted, adding that he donated $1 million to charity and paid out $500,000 to Medlock. (Good work, if you can get it.)

But why did Balaji surrender so easily? Isn’t there still a chance that the US economy will tip over the edge in the shadow of the debt ceiling and ongoing bank collapses, ultimately driving Bitcoin to the moon?

His explanation is almost depressingly predictable. IN an essay emblazoned with the caption “I burned a MILLION to tell you they’re printing TRILLIONS,” Srinivasan reframes the effort as a familiar exercise in libertarian awareness of “the next Fed-precipitated global meltdown,” triggered by a combination of US government (allegedly) reckless spending and the Federal Reserve continues to raise the interest rate.

Doomsaying about the fate of fiat currency and the global economy is probably the only requirement more stringent for being a Bitcoiner in good standing than the aforementioned shitposting. In that light, Srinivasan’s explanation strains credulity, if it does not insult the reader’s intelligence. Srinivasan is an almost recreationally rich man for whom $1.5 million is a relatively paltry sum. But he didn’t get it by lighting money just to prove a point he’s already made, many times over.

Jeremiah Johnson, co-founder of the center-left Center For New Liberalism and a strong believer in old-fashioned fiat currency, suggested another explanation in a blog posts published this morning. Johnson suggests that another force inspired the doomed quixotic effort—a force strong enough to propel presidents took officeto siding Mars-thinking moguls and finally time-defining artist careers.

The power to post.

“Remember – posting is the most powerful force in the universe. Posts are seductive and make you think all your ideas are brilliant. It always feels like a good idea to hit the send button,” writes Johnson.

“This is ultimately why Balaji engaged in an absurd bet of one million dollars against one bitcoin, when he could have just bought 40 bitcoins for that money. He could have just logged off and bought more bitcoins, but that would mean logging off. It would mean NOT hitting the send button and letting a joke at his expense go unanswered, and it can’t be. The power to post is undefeated.”

It is a difficult argument to refute. Posts have brought the mighty low, and it earned Medlock a cool half a million dollars for doing nothing. The solution to this bet tells us less about the health of the economy, Bitcoin’s power as an inflation hedge, or American trust in institutions, and more about how the compulsion to mailto be correctand winning social media’s competition for status and influence remains largely undefeated.

This is not to say that the impulse is necessarily wasted, or unproductive. It’s driven real-world innovation, wealth creation, and intellectual discourse: The crypto ecosystem, which, incidentally, wouldn’t exist without publishing, has a multi-billion global market cap; Tesla built its market capital largely off Reddit word of mouth and then used it to innovate in battery technology; even the heated debate about an entirely theoretical existential AI risk is an ongoing exercise in publishing, dating back to era of BBS.

Srinivasan may have shelled out $1.5 million, but the act remains his rock, his sacrament, his safe haven. Last year he published a whole book about how societies built around publishing will eventually replace, or at least compete with, the nation-state. I was skeptical of the idea when I wrote about the book in September, and I remain so. But ironically, after considering his efforts and our entire modern era of technological innovation in light of the sheer willingness to post, I’m now far more sympathetic to it than I otherwise might have been.

Meta throws up a bright red flag to warn internet users about scams playing off the ChatGPT hype.

In the company’s Q1 safety report released this morning, its Chief Information Security Officer, Guy Rosen, noted that it has blocked more than 1,000 malicious links since March that use ChatGPT as a pretext to obtain users’ sensitive information.

As it turns out, the novel, potentially security-breaking imitative capabilities of ChatGPT is not the danger of these links – it’s the hype around AI itself. Scammers are simply taking advantage of the novelty of, and extreme levels of interest in, ChatGPT to trick users into thinking they’re accessing it when they’re actually just installing malicious spyware.

“This is not unique to the generative AI space,” Rosen writes. “As an industry, we’ve seen this across other hot topics of its time, such as crypto fraud fueled by interest in digital currency. The generative AI space is evolving quickly and bad actors know it, so we should all be on guard.”

Outspoken FTC chief Lina Khan has an op-ed in the New York Times today that lays out his vision for how AI should be regulated.

Khan, who has made a firm regulatory hand with the tech industry a central part of her neo-Brandesian approach to competition law, argue that the rise of AI risks locking in the dominance of pre-existing tech giants such as Google and Microsoft. Therefore, she writes, the FTC should use every tool in its arsenal to prevent companies from “picking winners or losers” in the AI ​​boom.

“Enforcers have a dual responsibility to watch out for the dangers posed by new AI technologies while promoting the fair competition necessary to ensure that markets for these technologies develop legally,” Khan writes.

She also warns about the opacity with which AI models are trained, saying that “Because they can be fed information full of errors and biases, these technologies risk automating discrimination.” Given how active Khan’s FTC investigation has been other new technologiesthat op-ed definitely feels like a shot across the bow for the AI ​​era.