Replies (68)
Why do you feel like this is any kind of sufficient answer to anything at all?
You're overthinking this so much, that you aren't actually thinking it through.
Please feel free to help me gain perspective and see the correct way to think of it. So far I've gotten a few replies to this that all say absolutely nothing of any substance and seem to be purely emotional reactions.
Honest question, why is that not a good answer?
I can see you're part of the pithy hype quote squad.
Infinity divided by 21 million. So you think all of existence falls under the reign of Bitcoin, huh? So if there's 21 million universes, 1 BTC = 1 universe?
I'm trying to get some actual level-headed and serious discussion on what I wrote. I'm not a fucking troll. I've identified a gap in the discussion around Bitcoin and I wanted to try to see peoples thoughts on it. You reply with this bullshit because you somehow took offense to what I wrote. This is why you need to reevalute what your long term goal is for Bitcoin.
I'm not talking about a place that we're even close to getting to yet, I'm sure this would be decades, if not more. But eventually if Bitcoin does what it is meant to do, it will not be represented by fiat currency, can we at least agree on that?
I'm asking if anyone has considered how we will value it at that point. Maybe it would be in terms of units of energy?
How did players in games begin to value items in rare items, rather than the inflationary currency of the game?
The marketplace will figure it out, through trial and error.
We don't need a grand plan.
You asked what will one Bitcoin be worth, in a future where Bitcoin is the monetary standard.
If you buy a house, the house will be priced in sats. What the exact amount is, will be dependent on what the market demands.
The money is worth what you can purchase with it.
So would it be logical to say that it would likely just naturally evolve out of the value system we currently use? So like... purely hypothetical here, BTC goes to 10 million USD per coin and that coincides with the "switch over" point to where we start using BTC as the monetary system... we'd use the current value of things as the basis for starting out the new value system? Like, okay my $1M house now only costs 0.1BTC.
How is this different for you than pricing other free market goods or for example public traded stocks. Does it matter what the unit of account is? Shells, gold, fiat money or bitcoin? We have had many systems for measuring distance, weight and value. Bitcoin is nothing more than the evolution of money.
Even if we don't need a grand plan, do you just refuse to even think about it? All I'm trying to do is think about what the future may hold, and I noticed that there's an overabundance of memes and stupid quotes and a lack of any kind of questions like this. I get it that it ruffles peoples feathers, but maybe that's an indicator that it should be discussed more.
Think of a fluid switch over. Gradually then suddenly.
It's different because of the core narrative of 1BTC=1BTC and "don't value your BTC in fiat". All I'm trying to do is think about what that can actually seriously mean from a logical perspective.
At some point if the current system dies, a new system must replace it, and 1BTC=1BTC is completely meaningless.
Unless you're trying be a central planner, you don't really need a consensus.
You just need an agreement with (say) farmer Jones for how much you're willing to pay for her eggs, and an agreement with one of your customers about how much you want for your labor. The market takes care of the rest.
I agree that it will be this way at a high level, but I was curious to see if people had tried to hash out any more specifics on the subject.
I think that this applies more to a scenario where a currency is first being created. But we won't be in that scenario, we'll be shifting out of a deeply corrupt and mismanaged centralized system of fiat to something new. The new system will not be completely unaffected by this transition.
Bitcoin the the supreme measurement of value which all other things will be measured against. Bitcoin itself is the units of energy you are describing.
I do think all of our existence will be measured in terms of Bitcoin. Whether that extends past earth is not relevant. Infinity represents the total wealth that is possible. In practice it is finite, but it can and will grow forever which is why it is represented this way. 21 million is the ruler.
You might think I'm just repeating quotes and shilling Bitcoin, but the actual idea is one I believe and it has a lot of depth and meaning yo it. If you don't get it or disagree, that's your right.
It seems to me your asking how price discovery works?
Dunno if there can be specifics if it boils down to individual decisions. IMO if you understand money the value question is already answered.
Bitcoin is the new measuring stick. Organically, no need for a committee.
I'm not sure. I'm just a random guy who tries to understand the economy and Bitcoin and think about the future. So maybe I am. Mainly the part that confuses me is all the people who say "don't value your BTC in fiat" and "1BTC=1BTC". How do these sentiments fit with price discovery? I think this is the core of what bothers me, people in the community just seem to accept this and shower it in praise and likes. But I don't agree with that, I want more details.
prices are a ratio
you assume that they are based on some divinely imposed standard like the tablets of Moses
bitcoin is like physical gold, you can't just make it appear from nowhere
the value of bitcoin is what you can trade it for, just as the price of something is what you can charge for it
setting that "value" is done by all of us in relation to our needs for different things and the resources we have to trtade for them
Can you dive a level deeper? Why would 1BTC = 1BTC a problem?
Prices may vary a bit, payments may need to happen via Liquid or Lightning or Ark or Ecash layers on top of BTC, but all we really need are agreements to exchange some amount of Sats for the things you need to live. Prices are emergent from millions & billions of everyday transactions. Because Bitcoin is scarce everything will basically always be on sale.
How do you extract some useful information from 1BTC=1BTC when you need to pay rent, or an electrical bill, or buy food, or get paid for some form of future job?
We can & will use fiat valuations as a jumping off point. People already offer discounts to people paying in Bitcoin, the real cost of dealing with fiat will continue to rise until people just refuse to accept fiat.
You're just doing what I said and writing some random quote that doesn't mean anything. I wasn't implying a committee is needed, it was just part of my random musings. How can it be a new measuring stick when we're going to be completely and inexoriably biased by the current system? Gradually then suddenly right? We're going to gradually transition from the current system to BTC, so no, BTC will not be a new measuring stick, the old one will and we will then mold our mental frameworks around the new system based off of the old.
Prices aren't a ratio. They're a reflection of what the seller will let an item go for and what a buyer will pay to purchase the item. They have very little to do with the cost of production (while those costs must be taken into account, it's only a small part of the price).
There already is a market measurment of bitcoin in terms of fiat. There are also market measurments of bitcoin vs gold & gold vs fiat & fiat vs fiat. These measurments aren't going away. And they are going to print trillions more in fiat.
Thanks for your replies. I think your first sentence is the key answer to what I was wondering, and the realization I'm coming to reading all these replies. A lot of the hyping up and meming really does a huge disservice to the people who have a need to learn and understand the practical implications of things.
4 pears are worth 1 dollar (4:1)
6 dollars are worth 2 sodas (6:2)
All prices are ratios like this. This ratio exists due to market dynamics between sellers and buyers (like you said) and can change over time. The cost of production is usually a factor but like you said, it isn't everything.
You both likely agree and are just looking at things from different perspectives.
I think you are misguided in assuming all other things will be measured against BTC. That's purely impossible and completely discounts all of history. We aren't primitive people who just started bartering and realized we needed a currency. We are transitioning gradually from an extremely complex, corrupt, mismanaged system with hundreds upon hundreds of years of precedent.
So as some of the other people replying have already helped me realize: we will be using our current system as a jumping off point for valuation of BTC as we transition toward a different future.
It's not something that can be planned. You aren't ruffling feathers because you are asking a tough question that no one wants to consider, you are asking a question that just kinda demonstrates ignorance about how markets work. You have to figure out what you are willing to accept for your work & spend on the things you need based on whatever reference points you have, fiat price of bitcoin & what others are charging & what your costs might be. Translating prices to bitcoin is the combined job of everyone with bitcoin & everyone producing things that people want.
he's wrong, also, prices are always ratios
not just misunderstanding economics but basic mathematics too, all measures are ratios of something to something else
there is some contention in the world of science about the metric system relating to this, and funny little artifacts in a museum in paris
You can value anything in anything. You can value cars in bananas if you'd like, and I'm sure some people will try that for as long as we have freedom. But money is a network good and its not useful or practical to value things in a worse money that less people use. Bitcoin is the best money and once most people use it, it will be the standard for value.
And then once everyone else sees how much their other shit is losing value against Bitcoin, we will have a true Bitcoin standard.
I will absolutely be the first one to admit I still have a ton of ignorance about how markets work. I only finally sat down about 2 months ago and began to properly study and try to understand Bitcoin, and economics for that matter. Like I said in my other reply to you, I think that the majority of discourse in the community has led me astray because it completely lacks practical substance.
Of course I get it that it's fun to hype and meme and shit. But I still couldn't help but feel confused and find a situation I really can't understand when I tried to think about things long term. Everyone just talks about the near term. Price fluctuations, the adoption beginning to ramp up, all the changes starting to happen this year. But the key things I was curious about, I could never find an answer for.
I think the majority of people despise the current system just as I do, but they do to such a degree that they aren't even willing to admit that what comes next must grow from it and be directly linked to in a way we can't avoid. It's not necessarily a bad thing, I think, it's just how things will happen.
All things will eventually be measured against bitcoin & dollars at the same time, with dollar valuations of bitcoin helping now & as we continue on the path to this future. But then the dollar valuation will eventually matter less & less, & the bitcoin price of things will eventually be all that matters.
You’re really over thinking it. How do you value a banana when in a foreign country?
I agree with what you wrote here much more. Once the current system degrades enough, we'll have the transition moment.
In your said future, bitcoin is used to buy goods and services. You intrinsically understand the value of an hour of labor or a loaf of bread. With those being priced in bitcoin, you will quickly make the connection of the value of a satoshi at that point in time.
I tried explaining my view in the simplest terms possible.
If you do not view bitcoin as the future measuring stick, it means you believe there is some other money or commodity out there that will be of greater value. And that’s fair.
You need to go back & read/listen to the basics. Start listenting to Bitcoin Audible. Guy covers monetary basics over & over. Saifedean's books are all great reads. Economics in One Lesson by Hazlitt is a good read & can be found free online or on youtube. There is a chapter in there on money & prices that might help a bunch. There are Bitcoin Audible episodes on Yield from Money Held & The Use of Knowledge in Society which should be illuminating. Consume as much as you can.
It's an ongoing process for me. I'm still learning and don't have a solid foundational knowledge of economics and money. So maybe my original post was not a good idea, but I am fine with getting roasted and beat up as long as I learn something new or gain more perspective, and I definitely feel like all of these replies have helped me to do that.
Thanks for the recommendations, I'll look these up.
I value it based on the historical precedent of all who have come before me.
Check out the rest of the replies and my replies to them... I've gained some perspective from this post and identified where my knowledge is lacking. I guess I'm just not afraid to ask stupid questions.
Mises theory of money and credit opened the floodgates for me.
It doesn't ruffle any feathers. You just can't plan for something like this. It's like asking in 1990 "What's the plan for distributing and valuing information on the internet in the future?".
I feel like that would've been a completely fair question for someone to wonder about in 1990. Being told "you're just overthinking" is to me more akin to saying "I don't know and I don't like to think about this so you shouldn't either". I'm not saying that's what you were doing, but I find it completely natural to question things and attempt to address ignorance and see what other perspectives are out there. The painful part is when people forget that not everyone has the same level of knowledge or perception as them.
I've gotten a lot of really useful replies and some recommendations of learning resources, so I feel like this post was productive.
I never tried to imply a plan was actually needed. I was just writing out my random thoughts.
I think most of the memers are generally right in one way or another. Encouraging people not to worry about short term fiat valuations is important. Shifting from a fiat standard to a BTC standard requires realizing that getting more BTC is the goal, & if you haven't lost any BTC then you are winning.
I honestly believe you're overthinking something that no human in the world can figure out for themselves.
It requires the interaction of producers and consumers around the world, to figure out how products and services will be priced in #Bitcoin
To me 1BTC = 1BTC means nothing more than what it literally says, and is equal to $1 = $1. What more it could mean does not explain the emergent process that is the valuation of a monetary good. It cannot be planned, it can not be understood in full, it is what happens if it happens. This is the magic of a free market. And I am in no doubt that homo sapiens will reach consensus on this important topic.
The measure you’re looking for is #time.
One needs to do work to buy time alive. This productive time is represented with money.
The money you save is productive time of other people you buy with your own productive time saved in and represented by money again.
The best money to do this is #bitcoin.
The catch: when we use time to price Bitcoin we need proxies, starting with cost of living.
As a result we need to approximate cost of living, which is a problem for at least two reasons:
1) COL is currently priced in fiat. So we need to translate into fiat first and then into Bitcoin. Meaning many moving parts introducing variance.
2) COL varies significantly across and within societies. Plus, it’s usually a monthly or yearly measure, not a lifetime measure. Which actually introduces a third problem:
3) we need to build a lot of assumptions and means/medians on things like life expectancy, productive time (how much do people actually work in their lifetime and how to define work?), productivity etc. Additionally we try to sum up a lifetime dynamic in a single number. Problematic.
If 0.1 BTC is life changing or not will always depend on where you are globally and in life regardless of how much bitcoin adoption took place.
So… it’s complicated but will manage itself.
That's what happened when the Euro took over all the other currencies in Europe. Stores had two prices per item, one in Euro and one in their sovereign currency. People, over time, became accustomed to the new unit of account.
Some places may have discounts for individuals who prefer to pay in Bitcoin or an additional charge for those who choose to pay in fiat.
Bitcoin is a parallel system, so it is a natural evolution of our current value system.
Personally, after a few years of using Bitcoin as my personal unit of account, I recently started to think of prices in terms of sats. My brain hasn't fully adjusted out of denominating value in dollars, but it's getting close.
It reminds me of when I learned English. I would think and count in French, then translate to English. Now, I think and count in English exclusively.
This makes a lot of sense to me. Definitely complicated with a lot of moving parts. I just hope I get to live long enough to see it play out.
I think we will. I surely hope we will.
I agree. Many Bitcoiners (and Nostr-peeps) seem to have broken out of the fiat order, only to converge on a new order where questions disrupt their newfound beliefs. Growing is a continuous process that requires work.
You're question seems perfectly legit to me
I appreciate your perspective. My question is a product of naivete and ignorance, but also a strong desire to question new things I learn.
The analogy I have in my head is like when you give a new piece of software to a complete newbie who has no idea how things are supposed to work, and you just see what they naturally trend towards attempting to do and watch what they break. That's basically me right now with this new paradigm.
On a macro level, the value of products and services, measured in bitcoin, will come about through a calibration over time via a combination of price discovery and efficient markets. Goods are worth what people will pay for them, and whilst initially there will be a potentially large spread, eventually market consensus will be found and the margins will narrow.
This makes sense and I appreciate your succint answer.
I think the source of my confusion was consuming too much media where the implication seemed to be that fiat would just stop/die out, we'd then stop valuing BTC in fiat, and then we'd switch over to this new perfect system. Rather, what I needed to realize was that future value will be derived from our current system and there will be a lot of calibration over time as you mentioned. Up until now I have never heard any of the Youtubers, etc. I've been watching directly address this.
Of course my question seems stupid in hindsight, but I guess the fact that it does seem stupid now is a good indicator of exactly why I needed to ask it.
There will have to be a whole new period of price discovery for everything based on a lack of theft through currency devaluation. It won’t be neat and tidy. And I will be long dead.
Your last statement is interesting... why do you think that's the case? What's your speculation on the timeline for this happening? I said in another comment that I hope I live long enough to see it, because I genuinely have no idea how the timeline might play out. Things seem to be changing so rapidly now.
I don’t think there is such a thing a stupid question if it’s asked in earnest. The pursuit of knowledge requires an enquiring mind.
So it seems like you have now levelled up. Excellent!
I’m totally guessing, but it looks like there’s a global conflict coming up and an even bigger totalitarian push with very unsettled times in the intervening years. I’m thinking 3 decades minimum. Easy self custody, and layer 2’s and 3’s have a long way to go before they are useable and secureable by people with limited tech skills. I think part of the reason we have banks is because a great majority of people aren’t equipped to handle the responsibility of being their own bank. The security part especially.
This all makes perfect sense to me and I agree with you on how it seems apparent that some kind of large conflict is looming.
And yes, absolutely, we're nowhere close to having the average non-tech savvy person being able to have easy, secure access to self custody and use it in a way that they don't have to first dedicate time and focused effort to studying and understanding it.
Your mistake is believing that everything has be "planned."
I do not actually believe that. This post came from a moment of frustration, where I had just seen a bunch of meme and hype quote spam, and found it strange that most people talk about Bitcoin only in a present tense if they aren't parroting "1BTC=1BTC" or posting a meme or vague hype quote about how Bitcoin is the only logical future and how it will kill evil fiat. There's no substance in any of that. Along with this, I clearly don't understand money, according to many of the replies. I'm a newcomer to Bitcoin and Nostr and decentralized protocols and such in general, so my perspective is still trying to form, whereas everyone else apparently has known everything there is to know about all of this for at least 15 years (according to some guy who told me I was an idiot). So I knew I was going to get roasted, but it was a learning opportunity that I felt would be worth it.
I just want the weight of the potential impact to be reflected more in the discourse. I want to be able to talk about the intricate details and have thought experiments and discuss hypothesis with people for how things can *actually* happen, and things that *are* happening. I'm just sick of the memes and the hype quotes.
Thanks for the thoughtful response. There are a lot of ultra-optimistic memes out there about BTC, and I am very skeptical of hype myself -- and would never give a blanket endorsement of all of it. But I have to add that during the last nine years of my learning journey, I have truly been amazed at the potential of Bitcoin. It really is a genius-level invention, well-aimed at the heart of the current fraudulent banking system.
Fair, I misspoke about prices not being ratios. However, I'm not otherwise wrong. The cost of production is not as important as what the consumer is willing to part with to acquire something.
