Runy Calmera on Nostr: Why Paying Me Only 100 USD In BTC is Better 15 Times Better Than Paying Me in Fiat ...
Why Paying Me Only 100 USD In BTC is Better 15 Times Better Than Paying Me in Fiat Currency
Imagine you pay me 100 dollars an hour for a job.
Why would I prefer to take that 100 USD in SATS then taking it in USD?
What Is My Inflation?
Asuming my real inflation is 15%, and not 2-3% what the government is telling me then according to the rule of 72, in 4,8 years this 100 USD you pay me today in Fiat currency will be half.
It will have half the purchasing power of today.
So in 4,8 years the 100 USD you pay me today for 1 hour of work will only buy me USD 50 in goods and services.
5 years is the half life of fiat currency in a high inflation world we are living in today. And that is for the “best” fiat currency we have in the world: the US dollar! For all other currencies it is shorter than this!
The Rule of 72
The rule of 72 says you divide 72 by the inflation and you get 4,8. The 4,8 is the number of years your initial “investment” of 100 USD decreases in value by half.
Paying me in BTC
If I take the 100 USD in SATS and I assume the BTC grows with 50% per year (which is very low as in 2024 alone it grew with 130%), I can calculate what my initial “investment” in BTC will be after 4,8 years.
Lets take 5 years.
So my USD 100 needs to be multiplied by 1,5*1,5*1,5*1,5*1,5. (5 years)
That will be: USD 759,38!
If I take the 100 USD in SATS in 5 years I will not have USD 50 in purchasing power but I will have USD 759,38 in purchasing power after 5 years.
You could argue that I have to only multiply by 1,35 ( which is the increase of BTC of 1,5 minus the increase of inflation 0,15). Do that refined calculation yourself.
Calculate 100 * 1,35 to the power of 5.
What is my benefit of taking BTC today?
So there you have it.
If I take the 100 USD in fiat today my purchasing power is USD 50 after 5 years.
If I take the 100 USD in SATS today my purchasing power is USD 759 in 5 years.
Now take 759/50 and you get 15,18!!
By taking the Bitcoin today I have 15 x my purchasing power in 5 years!!
How much am I paid today if I accept the Bitcoin instead of the fiat currency?
So if your time preference is 5 years and your horizon is 5 years (this is the time you take into account when you take the job), you are actually being paid 1500 USD per hour today!
You don’t get 100 USD per hour.
If you take the 100 USD in SATS your hourly pay is actually 1500 USD.
15 x more than you actually see in your hands.
If you only have a time horizon of 5 years.
Summary
There you have it!
That is the power of being paid in hard money versus soft currency!
That is the difference between accepting Bitcoin versus accepting USD.
Runy Calmera
Host Island Wealth
Imagine you pay me 100 dollars an hour for a job.
Why would I prefer to take that 100 USD in SATS then taking it in USD?
What Is My Inflation?
Asuming my real inflation is 15%, and not 2-3% what the government is telling me then according to the rule of 72, in 4,8 years this 100 USD you pay me today in Fiat currency will be half.
It will have half the purchasing power of today.
So in 4,8 years the 100 USD you pay me today for 1 hour of work will only buy me USD 50 in goods and services.
5 years is the half life of fiat currency in a high inflation world we are living in today. And that is for the “best” fiat currency we have in the world: the US dollar! For all other currencies it is shorter than this!
The Rule of 72
The rule of 72 says you divide 72 by the inflation and you get 4,8. The 4,8 is the number of years your initial “investment” of 100 USD decreases in value by half.
Paying me in BTC
If I take the 100 USD in SATS and I assume the BTC grows with 50% per year (which is very low as in 2024 alone it grew with 130%), I can calculate what my initial “investment” in BTC will be after 4,8 years.
Lets take 5 years.
So my USD 100 needs to be multiplied by 1,5*1,5*1,5*1,5*1,5. (5 years)
That will be: USD 759,38!
If I take the 100 USD in SATS in 5 years I will not have USD 50 in purchasing power but I will have USD 759,38 in purchasing power after 5 years.
You could argue that I have to only multiply by 1,35 ( which is the increase of BTC of 1,5 minus the increase of inflation 0,15). Do that refined calculation yourself.
Calculate 100 * 1,35 to the power of 5.
What is my benefit of taking BTC today?
So there you have it.
If I take the 100 USD in fiat today my purchasing power is USD 50 after 5 years.
If I take the 100 USD in SATS today my purchasing power is USD 759 in 5 years.
Now take 759/50 and you get 15,18!!
By taking the Bitcoin today I have 15 x my purchasing power in 5 years!!
How much am I paid today if I accept the Bitcoin instead of the fiat currency?
So if your time preference is 5 years and your horizon is 5 years (this is the time you take into account when you take the job), you are actually being paid 1500 USD per hour today!
You don’t get 100 USD per hour.
If you take the 100 USD in SATS your hourly pay is actually 1500 USD.
15 x more than you actually see in your hands.
If you only have a time horizon of 5 years.
Summary
There you have it!
That is the power of being paid in hard money versus soft currency!
That is the difference between accepting Bitcoin versus accepting USD.
Runy Calmera
Host Island Wealth