jin on Nostr: Would love to get some external opinions on this. If anyone is able to help provide ...
Would love to get some external opinions on this. If anyone is able to help provide insight towards the point OceanSlim (npub1zmc…7f60) is making regarding price comparisons, I would love to hear your thoughts.
Obviously the goal is to have Bitcoin be used as a currency system, through local and global economies, but until then, am I not correct in saying that prices will always trace back to fiat until there’s “intrinsic” value in Bitcoin determined by society?
Obviously the goal is to have Bitcoin be used as a currency system, through local and global economies, but until then, am I not correct in saying that prices will always trace back to fiat until there’s “intrinsic” value in Bitcoin determined by society?
quoting note1jww…0t3cI do understand your train of thought, however two things to point out:
1. I did not once mention USD, I said fiat which is any central currency.
2. Using items that merchants have for sale as the comparison point does not work, because those items are only worth that value in Bitcoin/Monero because they are priced relative to fiat. An example using CAD: Eggs cost $4 a dozen. In Bitcoin the eggs would cost me 0.000047, not because the eggs are actually worth 4700 sats, but because that’s the current conversion from local fiat. The value of the eggs can only be denominated in Bitcoin if Bitcoin is actually the UoA, and thus valuable to the merchant (legal tender, circular economy, etc). If X sats = 1 UoA then it makes sense, but in order to value things in Bitcoin, at this moment in time is HAS to be compared relative to a currency or different form of value, like fiat or gold. You cannot determine the trading price between two currencies or assets using something like eggs, because the value of 1 sat or 1 Bitcoin has not been set at a specific level of understood value, and is calculated by comparison to fiat. In a future where 1 sat is the standard unit of account (ex if those $4 eggs now cost 4 sats), then we could use it as a UoA because there would be a decided amount considered to be the lowest valuable or available(1 cent in fiat). Until then, everything has to be linked back to fiat. This includes financial tickers, so when you look at XMR/BTC, the Monero is only worth what it’s worth in Bitcoin /because/ of the fiat conversion.