If I'm paying for a product with #sats #BTC does it change how much I pay since the value of btc is tied to fiat currency now?
In other words, would the price I pay for say, a software subscription stay the same irrespective of bitcoin price on the exchange?
#asknostr
Good question to ponder.
Indexing the value of BTC with fiat is clumsy, albeit the easiest thing to do at the moment.
Slowly, but suddenly we won't anymore...
Can you come up with some ideas how we might determine tangible world value per sat? I can think of a few.
I was trying to visualize this in my mind.
For example, would a software subscription that has infinite quantity, stay the same or even decrease year on year or when the next halving happens?
When it comes to finite quantity items, such as rice, wheat or potatoes, since price has to be local and not global, what variables would be taken into consideration and by whom? In other words, someone has to determine and broadcast a base price for that region.
Yes! nostr:npub1s05p3ha7en49dv8429tkk07nnfa9pcwczkf5x5qrdraqshxdje9sq6eyhe conceptualized this with his book the Price of Tomorrow. Main premise is that in a technological age, the prices of technology in a free or natural market all fall to what he calls "the marginal costs of production". And Bitcoin fits this. So prices would fall across time.
But setting a ever changing price of # of Sats for goods and services will likely be set by a cost of electricity IMO. Which loops back to Proof of Work.
I've heard some people iterate on this...
I think you don't pay more, you just lose the deflation, its value increase.
TLDR;
The more money you save in bitcoin, the more deflates.
I was pondering on living with a "deflationary currency". And I just realized if you store your money in bitcoin, it is as close as it gets to live with a deflationary currency.
I think, with a deflationary currency you would still get price swings. The cost of goods in bitcoin (if it is THE money) would depend on the amount of goods. So saying, if in a year, there are less breads then in previous year, bread would cost more in that year. But this would only impact the bread prices, not all other prices, in contrary to an inflationary environment.
Deflation when compared to fiat. Hypothetically, what happens if #BTC is the only currency? Would halving determine the new pricing of goods and services?
The market determines the price of everything, just like now. Everything is supply and demand. When you see something is expensive, it might be because that particular thing is scarce. When you see that everything is getting more expensive, it's because the money itself is getting LESS scarce.
This 👆
Plus, deflation not only compared to fiat, because the more people use bitcoin, the higher its price. Which is independent from the printing of fiat.
