Replying to Avatar Jason Ansley | Fractional COO | Leadership Coach

Learning question about #bitcoin

If the goal is for #btc to not just be sold (store of value) but to be spent (currency, or stated better imho, medium of exchange of value)

This means we have to shift from converting BTC > USD (fiat)… to 1 BTC = 1 BTC

Meaning we have to stop measuring things in fiat values and instead measure (aka price) in satoshis (sats)

This is a huge mindshift and one that I think will take time for many, let along the masses.

It would sort of be like traveling to a country whose prices are denominated in EUR but I transact in USD…my brain struggles to convert or compare the cost in EUR vs USD

(Bear with me I’m getting to my question, but the ground work I laid is important (if I’m understanding things correctly)

So then…if we continue to measure products and services in both fiat and sats,

Q1. will we not just inflate Bitcoin despite its deflationary nature?

Example (using an arbitrary price choice) :

An apple is $2 or 10k sats

If BTC is at $100k USD (fiat value)

And it goes up to $200k, which in essence means the $2 Apple now costs $4;

Q2. would not the sats also have to double to 20k for an Apple? (And therefore pricing things in BTC is also inflationary?

The exception to this would be in the parties transacting truly think only in sats and eliminate any comparison/conversion to fiat

But that is a major #economics mind shift because “what is the value of something (especially in sats)? Like how are thing actually priced in the world beside me just saying “I think this is worth $X”

Ok…I’m starting to ramble so I will stop.

Merely trying to close the loop in my head on how setting prices in sats will also not be inflationary.

(In the equities market price is set essentially by liquidity. The more liquid an underlying is, the tighter the price spread is…that may be part of my answer…the more people that transact in sats; the more efficient pricing becomes…but I don’t think that addresses all of my question)

[apology for rambling…trying to succinctly communicate my thoughts to help attain an answer]
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Den Yellek 1y ago

There is one part missing from this.

It is not just store of value and medium of exchange. There is also the third function of money - a "unit of account".

ChapterIt is not likely that bitcoin is widely used as a unit of account for some time I til massive adoption is reach and price stabilise. Chapter 9 of The Bitcoin Standard highlight this challenge.

"On the one hand, Bitcoin's strict scarcity makes it a very attractive choice for a store of value, and an ever‐growing number of holders could tolerate the volatility for long periods of time if it is heavily skewed to the upside, as has been the case so far. On the other hand, the persistence of volatility in bitcoin's value will prevent it from playing the role of a unit of account, at least until it has grown to many multiples of its current value and in the percentage of people worldwide who hold and accept it."

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Joe Bloggs 1y ago

The Reality.

Before Money, Barter was the exchange of things but was rated in Human Empathy.

Money removed that Human Empathy part of the exchange, because it was not perfect Information that recorded exactly the Human Empathy part of exchange.

That was Commodity Money. Since the 1970's Fiat Currency money became globally used, that further removed that Human Empathy exchange.

People game system's, so that opened Pandora's Box, you can have everything at no cost. If you can game the system with no cost, you have the perfect environment for fast breeding Psychopaths to win. Empathy holds others back.

Politicians from Vanity to Psychopaths can promise everything and deliver nothing. Psychopathic lawyers become heads of Government's, Councils, Mayor's and big Institutions and Non-Government Organisations etc et cetera.

The nett result of the loss of exchanging Pure Human Empathy is living life backward to those who cherish the exchange of Human Empathy.

As such, Gender Attacked, Family Attacked, Childhood Attacked, Religion Attacked, Property Attacked, Opinion Attacked, Home Attacked, Privacy Attacked, Health Attacked, Nature Attacked, Survival Attacked, Climate Attacked etc et cetera.

Bitcoin goes right back to what I said at the start and further, it's the exchange of Pure Human Empathy before people even thought to write about how a God could do this better.

If you don't think that chasing Fiat Currency is the Religion of living backwards, then my friends, your minds have gone.