Topic: How To Base Value of Goods and Services To Bitcoin? (Read 189 times)

Considering bitcoin on itselt,  it has a unit which is the rate at which a single unit of bitcoin is cost and this is in relation to the measure of it value  with the international most acceptable  currency USD, and also given it a comparison  to one of the most valuable asset of investment  "gold". It may not be something to achieve within a little space of time but rather a journey  of milestone  and fiat may not be totally  eradicated  but in the nearest  future of technological advancement,  it might be less effective compare to bitcoin

What if we just compare the prices of goods and services in the form of fiat money, after that we make them in the form of Bitcoin.
For example, the price of a shoe is worth $200 and then we change $200 into Bitcoin (suppose we buy Bitcoin with $200 worth of money when the price of 1 BTC is $39,409 then we get 0.005 Bitcoin) So we bought the shoe for 0.005 BTC.

Yes, its valued over the fiat ofcourse. You have to understand that even right now, you base it against usdt even now right now, when you have to buy/sell or even withdraw the bitcoins, this is converted instantly therefore you have to understand that if we are going to value anything, it can still be done online through applications and softwares therefore I do think that, this is not an issue at all.

Most platforms will charge a bit more, since the volatility is actually not a funny thing and at the same time you also have charges for sending/receiving as well. It's also not the same thing in all the countries alike, some countries have better opportunities for people to buy/sell using bitcoins.

I guess the issue is that Bitcoin with its high volatility changes could possibly cause issues in pricing (especially for non-automated ones) since it can change high or low quickly? Pretty sure we could still determine the values of goods and services with Bitcoin just like how we do it with fiat.

Though I honestly don't think there'd ever come a time where we need to do that, fiat isn't going anywhere anyway. We may see wide adoption of Bitcoin but it certainly isn't going to remove Fiat in action imo.

It's not a standard yet but if you have a platform which accepts Bitcoin as one of payment method, you will have difference prices with fiat, Bitcoin exclusively.

It is not too common because Bitcoin has yet been legal tender in many nations but it will be changed in future, I believe so. Bitcoin is a game-changer and it has changed the world so much. It will keep up its mission for wealth and freedom of global citizens. Obviously, for people who can accept it.

Soon after CBDC tracker and more CBDCs launched, we will see bigger adoption and more widely legal tender for Bitcoin.
https://cbdctracker.org/

I know about Salvador, but I don't think it's a good example. The standard of living there is low and unemployment is high. And as has been said here, bitcoin is converted to dollars anyway. Countries that don't have a national currency focus on another currency, but not bitcoin. Exports and imports are valued mainly in dollars.

This seems only possible if we change the mind of the consumers. The main problem here is that most people are still being paid in fiat money each month. So when ever they make purchases they will put the goods on relation to their monthly salary. For example, for a new ipad they would have to save 4 month. Even if the price was in bitcoins of the ipad, I expect most consumers to convert it into USD when their salary is being paid in USD. A good start would be to switch some part of the employee compensations into bitcoins. Maybe starting with the Christmas or vacation bonus. The more money is being paid into bitcoins, the more consumers would start budgeting their monthly money in bitcoins also. This will probably still take some years to achieve.

Okay, and if fiat money suddenly disappeared, would it be possible to obtain everything you want for free? I highly doubt it, which is why I think it is not money that gives value to goods and services, but the intrinsic characteristics of goods and services themselves. But that is not all. No matter what qualities a particular thing possesses, it won't have any real value unless some people recognize its value. Each thing will have a different value. People, when comparing two things of different values, will use their reason to assess the proportion: how many things of one kind they would give for things of another kind. Given that the number of goods and services that need to be evaluated against each other is enormously high, and given that the number of people in the society who are trying to measure value is very high, it is logically justified for people to come up with something with which to measure the interpersonal value of different things. In other words, money. Money doesn't have a price, its value is always expressed through different commodities. So, the purchasing power of Bitcoin is determined through the number of goods and services available, which in turn is determined by the laws of supply and demand: the rarer a certain good, the higher price in terms of bitcoin it will have. In the bitcoin economy, prices will fluctuate significantly, they will never be stable because the amount of available goods and services also fluctuates. If you notice that the price of a particular good has fallen, that means that too many goods of this kind are available on the market, that is, the supply of it is higher than the demand for it.

I don't think we will ever experience it soon because we are still tied to the dollar system or believe that everything has a price, and it's always in terms of your local currency or something. On the other hand, it's nice to think that it can be like that, but it's not wise for those who don't believe it entirely.

Maybe if we reach the point that it's going to be Service = amount of BTC, then that's that.

As time goes by, it's always going to go back with how much the price is.

1. measuring against time. does not mean measuring against a fixed amount of time forever
EG instead of changing dollars and cents you change minutes and seconds

2. some argue that it must require some middle man to decide the value..
but that argument is moot because who the F%&k decided everyone needs to measure against dollar

i know people want to keep bitcoin connected to dollar. but then thats actually deciding for people. thus counter-arguing the counter argument

there is nothing stopping this system from being adopted apart from people refusing to adopt it.
the main reasons why wall street would hate this is because

a asian person working 4200hours (Y12.6*4200=Y52920) can get bitcoin. (at forex Y52920=$8376)
and then sell it for 4200hours of america fiat min wage value.($15*4200=$63,000)
 and then use forex wallstreet to swap $63,000 for yuan  Y398,040
basically making the asian 7.5X richer per flip.

ending up with bitcoin actually causing the forex market to then crash and level up where eventually Y1=$1

but dare anyone ever try using bitcoin to cause an effect of the forex market.. hmm.. yea expect alot of hostility and anger if anyone dared thinking outside of the box that bitcoin can actually cause wall street market effect

I don't see this as complicated as some people make it to be. Deciding value of any goods in bitcoin is the same as deciding their value in fiat. The only difference is that fiat is inflationary while bitcoin is deflationary and currently volatile. This means price of everything will go up against fiat while it goes down against bitcoin.
Even volatility is not a big deal, it is just unusual to most people in the world because they don't experience high levels of currency devaluation every day even though it happens. For example in 2008 we had US dollar tank, in 2019 we had Venezuela currency tank, ... each causing big drops in fiat value and volatile states.

That is the point. If at some point you come to value products and services only in Bitcoin, it will be because you will have first gone through the phase of valuing them in fiat first and then doing the calculation of the Bitcoin equivalent. Subsequently, if fiat currencies are very weak or collapse, only the valuation in Bitcoin would remain as a reference measure and other currencies would have to make the calculation.

That sounds good, its actually a global standardised rate. Two questions though,

1. If time is constant and the supply of Bitcoin to the market is fixed wouldnt
that make the Bitcoin rate also fixed?

2. what are the arguments against this system?
.


We know this but whet happens in El Salvador is the Bitcoin price is converted
from the US Dollar. The OP asks the question:

If you haven't heard by now, Bitcoin is now legal tender in El Salvador. So it has already happened. Hopefully this is just the first of many countries to follow.


Are you aware that there are countries without their own local currency? What about them?

I don't think valuing goods in bitcoins as a major currency will ever happen. Bitcoin is an unofficial international means of payment, I would even call it a phenomenon. Pricing is tied to local local currencies, which bitcoin is not. Therefore, there will be conversion relative to local currencies everywhere.

the foolish thing is though..
only 320mill people use US dollar where as over 1.4billion people use yuan..
yet someone at some time decided we should peg bitcoin to US dollar and we stuck with it.. for CONVENIENCE

we CAN change this convenience. there is no law that says bitcoin needs to be valued to the dollar.

im not saying get all goods in the world to mention a bitcoin price.. im suggesting instead changing how bitcoin is valued. to no longer be stuck against the us dollar

Bitcoin does not exist in a separate world from fiat, and since fiat is the dominant currency, no one is really going to calculate prices in a highly volatile currency like Bitcoin first. The closest thing to what you are asking is various crypto to crypto markets, like tokens or NFT, since all the deals happen in crypto, and you can see that the prices often remain stable even if the broad crypto market experiences rapid price changes.

we COULD actually create our own 'measuring stick' instead of measuring to dollar and then from dollar to other forex fiats

like you say we could measure it to apples or say minimum wage hours.
however an apple is not then pegged to other goods/services.. so complicated to use apples as the measure of value

yet take minimum wage law as a more defined value measure. but i dont mean the $ value. i mean the HOURS

where by this would benefit by equalling out the poverty inbalance of the world if a good peg was used where value can be recognised from it.

right now someone in california where min wage is $15 an hour only needs to work 2800 hours to get 1btc ($42k)
where as someone in asia only getting $2 an hour has to work 21,000 hours ($42k) to get 1btc
seems extremely unfair right now for the asian population, right?

but by bitcoin creating its own poverty neutralising 'measuring stick' value as X minwage hours. then this can level everyone.
so lets say that right now btc was 4200 min wage hours. people in california will at first complain that they have to work more. but then in more impoverished countries will work less, a heck lot less, where they both end up working the same number of physical hours to afford to both buy 1btc each.
thus levelling out the geographic wealth gap
where by then people trade in 'minutes' and 'hours' instead of $

EG market exchange rate is 4200h32m12s
where each exchange knows the national amounts and when people deposit their national currency it converts that currency into hours minutes and seconds. and the 'price of bitcoin' fluctuates in minutes and seconds rather then dollars and cents

Its an interesting consideration.

If we forget about FIAT would we be happy to accept a Bitcoin amount for
goods and services like 1kg of Apples = 0.00005BTC, regardless of the FIAT
value of Bitcoin we just think in Bitcoin.

But there are too many factors which work against this, will we still need to
convert Bitcoin to FIAT to pay our bills? if yes its pointless pricing in Bitcoin,
it would be an ideal scenario if Everything was priced Bitcoin but because
of its limited supply its just not going to happen.

One question that was often asked when discussing the value of Bitcoin, is whether it is going to have a lot more applications and have greater use in real life in the future or whether it is still just an experiment in economics and it is going to never be widely accepted. I can't say what will happen in the future, but I can say that Bitcoin is already here and has proven itself worthy of being placed in the same category as fiat currencies.

The value of Bitcoin has to do with the ability for a person to trust in it as a currency. There is no central bank to go to for support and stability, but at the same time there is no issuer to try and manipulate or control the market for it. It is all driven by demand and supply; It is scarce and the supply is governed by the protocol which dictates how many Bitcoins can be mined with each block. As with any currency, the value of cryptocurrencies depends on their scale of community involvement. As they grow in use, the value will increase proportionally.