Is Hyperinflation Inevitable? Jack Dorsey Says It’ll “Change Everything”

When Square’s boss Jack Dorsey talks about hyperinflation, the world listens. And Twitter reacts. Since so-called developed economies are now feeling the pain that inflation brings, the concept is in everyone’s mind. Every human has a front-row seat to witness the consequences of the United State’s relentless money printing. And, since the Dollar is still the reserve currency of the world,  they’re all feeling it too.

Related Reading | Bullish For Bitcoin: US Inflation Expectation Breaks Out From Decade Long Downtrend

This is Jack Dorsey’s tweet:

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As you can see, he doesn’t merely talk about inflation. He goes for “hyperinflation,” which caused adverse reactions in the replies and the quoted tweets. They accused him of fear-mongering and quoted official numbers at him. And the nay-sayers probably have a point here, because the US is far removed from the reality that word implies. However, one thing’s for sure: money printer goes brrrrrrrr… and it hasn’t stopped working since Covid hit.

Negative And Moderate Reactions To Jack Dorsey‘s Tweet

This is an example of an unnecessarily insulting response from a traditional finance person. 

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This man has obviously not done his homework regarding Bitcoin, so his argument is invalid. And doesn’t require a response. Plus, he’s being insulting to get attention, which he got. So, good for him and his dopamine levels. Let’s hope he has fun staying poor.

This is a Venezuelan economist with a moderate answer to Jack Dorsey.

Since Venezuelans have first-hand experience with hyperinflation, let’s take what he says into account. The US is just feeling what inflation does. So-called developing economies live with that concept on their backs every second of every day.

BTCUSD price chart for 10/23/2021 - TradingView

BTCUSD price chart for 10/23/2021 - TradingView

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Informative Reactions To Jack Dorsey’s Tweet

The Human Rights Foundation’s Alex Gladstein, a notorious Bitcoin maximalist, had this to say to Jack Dorsey.

He’s not lying. Hyperinflation is “already one of the world’s biggest humanitarian crises.” However, the US is far away from “Turkey, Nigeria, Ethiopia, Iran, Lebanon, Venezuela, Cuba”, and Sudan’s situation. And, since the Dollar is still the reserve currency of the world, they have a comfortable cushion to resist the constant money printing’s effects.

Serial entrepreneur and former Coinbase CTO, Balaji Srinivasan, answered Jack Dorsey with a fully-fledged idea. A “censorship-resistant inflation index.

In the project, he brings forth some hard truths:

“If inflation is a government-caused problem, we can’t necessarily rely on government statistics like the CPI to diagnose it or remediate it. Indeed, in places with high inflation, censorship and denial is the rule rather than the exception.”

If you are technically capable, there’s still time to send your proposal and earn “A $100k Prize for a Decentralized Inflation Dashboard.” Be aware that “if you use Chainlink’s oracle tech in your project, the best dashboard will be eligible to receive a $100k grant in LINK tokens.” Those tokens are in addition to the main prize.

Poor Understanding Of The Terminology

In a Twitter Spaces room specifically dedicated to Jack Dorsey’s tweet, notorious podcaster Preston Pysh concluded.

“I think people’s understanding of the terminology, deflation, inflation, is just grossly misunderstood. And so, when you say we’re going to have these deflationary events that are then going to lead to more QE, which is then going to result in more inflationary events. I completely agree with you, but we’re talking that there’s so much information loss in such a simple word as deflation and inflation. So the deflationary event is that this whole system is constructed as credit.”

When he says QE, Preston refers to Quantitative Easing, which Investopedia defines as:

 “A form of unconventional monetary policy in which a central bank purchases longer-term securities from the open market in order to increase the money supply and encourage lending and investment. Buying these securities adds new money to the economy, and also serves to lower interest rates by bidding up fixed-income securities.”

Related Reading | Jack Dorsey Plans to Build A Decentralized Exchange For Bitcoin

That being said, Preston asks:

“How many people in the US, or in the world, have that context when that’s not their expertise, right? They didn’t get a major in macroeconomics, or finance, or whatever. So, it’s just all buzzwords that people throw around. And, in the meantime, no one really even understands what those definitions even represent.”

For more information about inflation, check out the Bitcoinist Book Club analysis of Saifedean Ammous’ “The Bitcoin Standard.”

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Serbian Citizen Extradited to US to Face Crypto-Related Fraud Charges

On Friday, February 5, the US Department of Justice revealed that Serbia has handed over its citizen, Antonije Stojilkovic, 32 years old, to the United States to face charges over conspiracy to commit fraud and launder money through a crypto mining investment scam.

Acting US Attorney Prerak Shah, said:

“We are proud to bring Mr. Stojilkovic to Dallas to face justice in an American courtroom. The U.S. Department of Justice will not relent in our fight against cybercrime.”

The DOJ alleged that Stojilkovic and his six colleagues duped investors across the world – many of them live in northern Texas – out of more than $70 million.

According to the court document, Stojilkovic and his partners (five Serbian co-conspirators and one US-based co-conspirator) set up fake trading platforms from their home bases in China, Serbia, and elsewhere, and used such platforms to advertise cryptocurrency mining and binary options services to innocent investors across the globe.

The culprits operated the platforms under the names of Trinity Mining, BTC Mining Factor, Bancde Options, Options Rider, Dragon Mining, and Start Options.

The binary trading services claimed to offer an average payout of 80% and promised 20% refunds on every lost trade while the crypto mining platforms promised investors to buy Bitcoin at half market price. The $70 million scam cut across several continents, targeting US citizens and foreigners.

By displaying a respectable and convincing online presence, fake figures on their scam investment portals and a series of fraudulent withdrawal history logs and fake wire receipts, Stojilkovic and his partners made investors think that the crypto mining and binary options trading was legitimate business activities.

If found guilty, Stojilkovioc and his co-conspirators would face a maximum of 20 years in federal prison.

Apart from Serbia, there is no public information from any other nation making a similar extradition request for the culprits.

Common Crypto Scams to Avoid

The significant rise of Bitcoin’s value has attracted many people to invest in the cryptocurrency in order to get better returns. However, anyone chasing that fortune can easily fall victim to opportunistic con artists who perpetrate cryptocurrency scams.

These scams pitch themselves as investment opportunities, promising high returns, but with a catch; investors have to pay some funds to an agent, or into an account, or asked to send funds somewhere.

Such scams tend to market themselves heavily and hide their true intentions through tried and tested marketing gimmicks. Lots of them have an element of referrals, promoting it to others, or inviting others for some rewards, and their marketing agents are known to be excellent at sales and marketing.

Investors interested in Bitcoin are advised to be aware and stay alert of potential scams associated with fake Bitcoin exchanges, Ponzi schemes, fake cryptocurrencies, ransomware scams, and pump-and-dump scams.

Image source: Shutterstock


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