Bitcoin betting is making headlines as tech founder Balaji Srinivasan accepted a wager from social democrat James Medlock. Medlock bet $1 million that the US would not enter hyperinflation, and Srinivasan took the bet against one Bitcoin (BTC) with 40:1 odds, with the bet terms lasting 90 days.
Srinivasan has called for a mutually agreed custodian to ensure the bet’s settlement in case of digital dollar devaluation. He also suggested executing the stake through a smart contract, allowing the use of USDC stablecoin instead of US dollars. If Medlock is unwilling to use a smart contract, Srinivasan challenged him to name a custodian.
While taking the bet, Srinivasan argued that banks and regulators have been lying to depositors and dollar holders about the insolvency of banks, similar to the 2008 financial crisis. According to the analyst, banks used deposits to buy long-dated US Treasuries, ultimately devalued by the federal reserve bank, causing a banking crisis.
Srinivasan recommends buying Bitcoin and getting coins off exchanges as a protective measure against financial risks. He believes that investors who gambled on long-term Treasuries were wiped out in 2021 and those who relied on short-term Treasuries would suffer the same fate in 2023.
Multiple reports have confirmed that the US government recently printed $300 billion “out of thin air” as a bail-out following the collapse of three prominent banks in the country. This highlights the importance of Bitcoin betting and the need to consider alternative options to traditional financial systems.
Balaji Srinivasan is a former CTO of Coinbase, a popular cryptocurrency exchange. He is a prominent figure in the blockchain and cryptocurrency space and has been involved in various technology startups.
Before joining Coinbase, Srinivasan was the co-founder and CEO of a genetic testing startup called Counsyl. He has also served as a general partner at Andreessen Horowitz, a prominent venture capital firm, where he focused on investments in blockchain and cryptocurrency-related startups.
Srinivasan has been an advocate for the use of cryptocurrency and blockchain technology for various applications, including decentralized social media and micropayments. He has also been a vocal proponent of decentralization and has written extensively on the subject.
During 2020 over the course of a three month period the US Federal Reserve, also known as the American central bank, printed slightly more than $3 trillion in an effort to mitigate the economic consequences of the Covid-19 pandemic.
We are now experiencing the effects of this as inflation increases throughout the US and also effects the economy on a global scale.
Inflation can have several negative effects on the economy, including:
Reduced Purchasing Power: Inflation decreases the purchasing power of money, meaning that the same amount of money can buy fewer goods and services. This can lead to a decrease in consumer confidence, lower spending, and slower economic growth.
Increased Costs: Inflation can increase the costs of production for businesses, including the cost of labor, raw materials, and energy. This can lead to lower profits, reduced investment, and higher unemployment.
Reduced Savings: Inflation reduces the real value of savings over time, which can discourage people from saving and investing their money. This can lead to lower investment, reduced economic growth, and a higher cost of borrowing.
Uncertainty: Inflation creates uncertainty in the economy, making it difficult for businesses and individuals to plan for the future. This can lead to reduced investment, lower productivity, and slower economic growth.
Overall, high and unpredictable inflation can be harmful to the economy by reducing purchasing power, increasing costs, reducing savings, and creating uncertainty.
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