juraj on Nostr: Illusion of unit of account. Juraj Karpis said in his talk at HCPP that we have this ...
Illusion of unit of account.
Juraj Karpis said in his talk at HCPP that we have this almost a language notion of unit of account. We all know what our currency (1$, 1€) means. We don't have to think about it. BTC has not achieved this yet. See the talk, it's amazing: https://www.youtube.com/watch?v=pD3Uawu2JMQ
But this has a flipside.
Level 1: "EUR in 2010" and "EUR in 2025" are very different currencies. Looks the same, same pictures, same unicode character (€), very different purchasing power.
Level 2: No, you can't multiply the 2010 prices with CPI over the years. 1000€ in 2010 would be 1368€ today according to these statistics. But that's completely wrong and we know that. They CPI is not calculated very well.
Level 3: Even if we got the "purchasing power level" right, the relative prices have changed. In 2010 I could not even get some things (like click in an app and someone would deliver me youghurt to my doorstep 30 mins later). A laptop that cost 1000€ in 2010 is basically a free gift today, or less than 100€. The relative prices are changing as well.
Juraj Karpis said in his talk at HCPP that we have this almost a language notion of unit of account. We all know what our currency (1$, 1€) means. We don't have to think about it. BTC has not achieved this yet. See the talk, it's amazing: https://www.youtube.com/watch?v=pD3Uawu2JMQ
But this has a flipside.
Level 1: "EUR in 2010" and "EUR in 2025" are very different currencies. Looks the same, same pictures, same unicode character (€), very different purchasing power.
Level 2: No, you can't multiply the 2010 prices with CPI over the years. 1000€ in 2010 would be 1368€ today according to these statistics. But that's completely wrong and we know that. They CPI is not calculated very well.
Level 3: Even if we got the "purchasing power level" right, the relative prices have changed. In 2010 I could not even get some things (like click in an app and someone would deliver me youghurt to my doorstep 30 mins later). A laptop that cost 1000€ in 2010 is basically a free gift today, or less than 100€. The relative prices are changing as well.