How to Post Your Way to a Million Dollars
Step One: make fun of crypto guys
Have you ever found yourself unable to back down after an ill-conceived post? Maybe you wanted to retreat, but doing so would lose face? Instead you dig in your heels, refuse to admit defeat, never say die. Later, if you’re eventually proven completely wrong, just change topics and declare that you were Actually Doing A Bit or perhaps you were Just Getting Publicity For The Cause. Of course you knew what the truth was. We’ve all been there.
But your stubbornness probably didn’t cost you a million dollars.
Two months ago cryptocurrency enthusiast, venture capitalist, Taylor Lorenz antagonist and all around pot-stirrer Balaji Srinivasan proclaimed “Hyperinflation is happening — now. Buy Bitcoin and get your coins off exchanges.”. This started a small discourse, and anonymous progressive poster James Medlock sarcastically tweeted “I'll bet anyone $1 million dollars that the US does not enter hyperinflation”. This was mostly a joke about how if we entered hyperinflation a million dollars wouldn’t actually be worth very much, but lo and behold:
Balaji offered a 40:1 bet, staking a million dollars against James’s one BTC (about $26,000 at that time). The supposed logic was that Balaji believed hyperinflation would hit the US very soon, and at the end of the 90 days 1 BTC would be worth more than a million US dollars.
If this seems like an insane idea to you, congratulations, you understand both macroeconomics and probability better than Balaji. (in case you were wondering: the money supply is trending down, not up, since 2022. And increasing the money supply doesn’t necessarily lead to inflation)
A significant number of people thought that Balaji would simply welch on the bet - there was even a prediction market that only gave the bet a 50-60% chance of occurring. But after more than a month spent attempting to figure out the logistics of the bet, yesterday Balaji conceded defeat and sent $500K to James and $500K to GiveDirectly, a charity James chose (and big respect to James for donating half his winnings).
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This is incredibly funny for so many reasons. It’s funny because any of us could have been James. He just fired off the tweet without much thought and won the internet lottery. It’s funny to watch crypto guys be hilariously wrong and get owned in public by anonymous shitposters.
It’s funny because if Balaji thinks Bitcoin will go up, he could simply have bought more Bitcoin. Rather than bet a million dollars to win a single bitcoin he could have just bought ~40 bitcoin with that million dollars! Why would anyone do it this way?
But most of all, it’s funny to watch Balaji pretend very, very hard that this is actually the outcome he expected.
Balaji’s attempts to justify the bet in retrospect are cope in its purest, distilled form. It’s such an insanely stupid bet to have made that almost immediately, people began forming convoluted explanations for how this could make sense. Maybe he was trying to pump the price of bitcoin and a million dollars was just advertising spend. Balaji himself has settled on ‘I knew I would lose the bet, but did it to draw attention to save YOU, the common man’.
You can watch Balaji’s video and read the entire thing here if you have a fetish for people humiliating themselves. The reality is that Balaji is like a lot of people in crypto world - easily bought into hype, prone to conspiratorial thinking, ignorant of macroeconomics, and deluded about his own predictive abilities and the future of Bitcoin. He’s also a massive poster with a history of starting fights, overconfident declarations, and brash impulsive behavior on social media. He’s been predicting hyperinflation for years. The simplest explanation is the correct one - he impulsively said he’d make the bet because in the moment he thought it was a good bet. And once he’d offered the bet, he couldn’t back down. One lesson of the Trump era is to never admit an error, no matter how obvious the mistake or how ridiculous you look. Any other explanation for ‘why Balaji actually made the bet’ is denial of the obvious.
Remember - posting is the most powerful force in the universe. Posting is seductive and makes you believe all your ideas are brilliant. It always feels like a good idea to hit the Send button. This is ultimately why Balaji engaged in an absurd bet of one million dollars against one bitcoin, when he could have just bought 40 bitcoin for that money. He could have just logged off and bought more bitcoin, but that would mean logging off. It would mean NOT hitting the send button, and letting a joke at his expense go unanswered, and that cannot be. The power of posting is undefeated.
Congratulations to James Medlock for being in the right place at the right time and posting his way to a million dollars. If there are any other crypto enthusiasts who’d like to make economic bets, you should absolutely keep posting and preferably tag me first.