I 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.

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S!ayer's avatar
S!ayer 1 year ago
You're talking about valuation vs market price. There's many factors that effect both; like quality, quantity, supply and demand. The eggs are 4700 sats. They're also $4. Merchants who define their base FX, and then subsequently trade in that, will determine it. "we do not accept cash" - a merchant policy for example. "We only accept bitcoin" - another policy You're not wrong in your understanding, but it's a little strained. Fx exists in any measurable way, x to y. It will always exist in a free market. If one trader has eggs for $4 CAD and another wants to sell bacon, one could equate eggs/bacon market value, attribute that to and currency and then trade it. What you're aiming for, like many bitcoiners, is that Bitcoin becomes the standard medium of exchange/unit of exchange, as the dollar is the standard medium of exchange across base input commodities (wheat, soy, gold, rice, cobalt, diamonds, oil) all priced in USD and allows the US to export it's inflation.
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