Bitcoin Forum

FED is recently pricing goods in Bitcoin.
Though this news came out last week.

A YouTube video published by a bitcoiner and crypto enthusiast -Anthony Pompliano  and article I read online regarding this news.
https://youtu.be/XyCdearSTbs

The St. Louis Federal Reserve published a post.
"Which Shows that Bitcoin is a Unit of an account" for measuring things like price volatility.

Cracking Bitcoin-Volatility Case

According to the post “Buying eggs with bitcoins – a look at currency-related price volatility,” the Eggs/BTC graph,
The FRED graph, essentially compares egg prices in USD versus bitcoins.  (i.e trying to show that Bitcoin price is volatile)
But Misses the Big Picture: Which shows Bitcoin is a Unit of an account"

Further, crypto Community Reacts:

Deemester admitted that the Eggs/BTC graph was created to diss bitcoin’s volatility but also said that it did manage “to add another notch in the credibility belt of hard digital cash.”
https://cryptopotato.com/fed-prices-eggs-in-bitcoin-but-misses-the-big-picture-crypto-community-reacts/

Generally, in my own view this News could trigger a shift in the mindset of people to start thinking pricing things in value of Bitcoin rather than in dollar.



How would you feel if you have (BTC),goods and services other asset  are  no longer priced in US dollar (fiat) and eventually priced in BTC ?
Share your thoughts.



 

It was meant to mock BTC so people can see its volatility and then probably discourages them to not get into BTC. But like Pomp said, "first they laugh at you, then they fight you and then you win"

If I see goods priced in BTC locally in the grocery stores, I would really believe we're almost close to it. And might finally come true and perhaps in the the next few more years 1satoshi may actually have value for keeps.

I can't imagine how goods and services price will be based on BTC because of the high volatility, perhaps when I spent my BTC to buy a coffee that's cost 0.0002 BTC or worth $5.51 currently, I will regret it if BTC price increase a lot and my 0.0002 BTC will worth $7. But I believe when it's happen, BTC is already very expensive and more stable, so the sudden change of $5K or $10K isn't making people panic anymore.

That would be difficult to apply in the current market but one can start small and who knows things could change many fold. For example, mega stores like Walmart, Aldi, Reliance fresh can start putting label in the format of bitcoin and dollar.

But there is big problem of price volatility so a fixed label would be little off track. I mean if you fix label of bitcoin and price fluctuates a lot then same mail eggs could cost different in morning and in the evening.

So they will have to implement bitcoin converter in their software itself. So that after scanning the QR code it should display the current bitcoin value and then may be it will work.

Well, I find it interesting that they needed to mock Bitcoin's price volatility in the first place. They are obviously threatened by Bitcoin, because they need to highlight it's differences to Fiat currencies to boost their own "Bubble".  ::)

Why are they not showing the average price increase of Bitcoin over the time that it has been introduced and compare that to the drop in the value of Fiat currencies based on inflation over the same period. ( What would have happened if one person bought $100 worth of bitcoins in 2010 and what would happen if another person has placed $100 in a Bank at the same time)

===> If I bought $100 worth of bitcoins in 2011 ..I would have purchased +/- 333.33 bitcoins ....worth about $9 167 000 today. (today's price $27 530)

Given bitcoin's volatility, I don't think it's possible to use bitcoin to price commodities, unless bitcoin becomes a stable asset class. we invest in bitcoin expecting profit so I really don't think it will ever become stable and I don't like the stability of bitcoin myself, I like its volatility and that is bitcoin.

The US government is controlling the dollar and I don't think they will let another currency or asset take the place of the dollar , that certainly can't happen.

1.  But don't you think maybe sometime in the future that Bitcoin's price volatility could stop?





2.  Is it in the algorithm of Bitcoin that it will continue to be volatile?

Something I'd said years ago I'd really like to see start happening too -- and actually, if you trade p2p you do see some traders price everything with a BTC pair, definitely with other crypto/coins and increasingly with fiat currency.

That is a huge step moving away from USD pair, as things always used to be.

We still won't see people price things in a base BTC -- I remember this forum, signature campaigns were generally on a base BTC payment. I even started out freelancing in 2016/17 pricing everything on a base BTC rate, but as price went wildly out of predictability, everything began pricing back at USD base.

So for the trend to swing back in the other direction? What would this mean for Bitcoin is simple: price stability. That means far lower volatility, or at least extreme volatility but within smaller amplitudes.

Unlikely it ever will. Bitcoin is publicly traded and its price depends on the supply and demand effect. Throughout its history, it has often reacted negatively to bad news and positively to good news. This is evident from the price movements after important news regarding regulations is released. Whenever there is talk about Bitcoin being banned, or important players requesting stricter regulations, people start panicking and begin dumping their coins. The price can't go up if more investors want to sell than to buy, especially selling at a loss. Apply the opposite logic in situations when more buying is registered for whatever reason.

Don't forget the market manipulations and whales colluding to get your coin at cheaper rates. We wanted decentralization and unregulated markets and that's the price of it. 

things to note.. fiat isnt stable either.. we just got used to not seeing it

when looking at forex. USD->GBP is not stable.
retail prices are not stable

ok im going to imagine i am an american coming to the UK (im british, but most readers are american so im translating to their prospective)

so $200 used for both examples..  
and a meat&potato pie(ginsters pasty 227g)was at a offer of £1 on wednesday(fact)

so on wednesday. i would use my card and get £158($1=£0.79) meaning i can buy 158 pies on wednesday

so on friday using my card i spend another $200, but get £162($1=£0.81), i know your thinking you can buy more pies right??... well. no, wrong
(fact) pie was £1.50 on friday, the deal ended

meaning im only able to buy 108 pies

this is a factual event of the forex value change of £0.79p to £0.81p of usd to gbp on wednesday-friday
and a factual event(seeing it in store) of the different deal changes of goods in local retail store

by the way. the price of a pie (ginsters pasty) ranges from £1 to £1.75 depending on retailer, deal of the day/week, and which town you go to..

in short. depending on what shop an american shops at in the UK, depending on what day of just a 3 day tour of the UK.. the fiat volatility is noticeable

the american can get between a variable of £0.79 -£0.81  and a pie price of between £1 - £1.75
meaning a massive difference of between 90-162 pies for $200 worse to best case

Great societal adoption will not happen unless Bitcoin is adopted as a legal currency in many countries, which may take about 20 to 50 years, but until that time, the most important measure is the increase in the number of people using Bitcoin (the growth rate in the number of users per year.)

As for the definition of bitcoin, it is due to the increase in the average use of these currencies, and the entry of large companies that force regulators to put in place legal frameworks (for taxes at least) before the final recognition comes, which may need these currencies to reach at least $ 20 trillion as a market commodity.

Let's apply the same logic and ask the FED or a regular citizen this question - - How many eggs can you buy with $100 (in fiat) in 2011? Compare it to 2022.

Maybe if Governments or Financial Institutions get a hold of maybe 80 to 90% of BTC supply (but price volatility will remain even then). Fluctuations will be but you probably won't see +/- 30% because the market will be much more controlled.

I don't think bitcoin pricing is possible. The price of bitcoin changes almost every few seconds. Moreover, based on its decent cost, these changes are quite significant. If this is applied in a retail outlet, it will be a big problem for its administration. A simple question: how to show the price of goods before the tax office? How to prove that the price is valid at the time of each purchase? I am not saying that it is impossible. However, this is so much work that it would be easier not to use the price of goods in bitcoins, at least in retail.

I think that it doesn't matter what we use to set the prices. I'm okay with it being the USD, just as a popular point of reference. Bitcoin is too volatile for it to be practical to price things in it for now. The price can, of course, be dynamic and in both fiat and Bitcoin, for example, but if earlier today Bitcoin was worth $27k, and in a matter of hours it jumped to $28k, it's a significant difference and the sort of volatility that makes it inconvenient to price things in Bitcoin. It can be used for online stores, especially if there's an option to make automatic price changes in real time (or, say, once per hour), but imagine changing the price tags in an offline store often.

So an economic site made an article about pricing things in Bitcoin, to showcase its volatility, and bitcoiners on twitter predictably got outraged and also said that this is good for Bitcoin. How does this change anything? This is just media noise.


It's impractical to measure things in BTC, because you have to go and look what the price is today, which is a few percent different from yesterday. So forget about it happening, until Bitcoin moves no more than by 0.1-0.2% per day.

By this means, the adoption of Bitcoin is spreading. I can't wait to see the 1 BTC = 1 BTC.
I am also curious why the USD is still up during these times and not Bitcoin, inflation rate in most of the countries in the world are slowly increasing over the past few months.
If we will continue to use Bitcoin as pricing in such services/assets or goods, I believe the price of Bitcoin will become more stable and we can start see less volatility, but I will expect first a huge volume will flow to Bitcoin.

I'd be quite happy since that means adoption has simply come that far, whether the intent of said adoption was to mock Bitcoin or not. It may take some time to adjust but it's simply like switching countries and seeing stuff being sold in a different currency. There's the issue with volatility but I think that time would solve that issue and would slowly flatten to the point that its effects would be negligible. Maybe except when extreme situations happen. I don't think it's going to happen in my lifetime though tbh.

At this time also i am interested in paying with fiat over these stores rather than bitcoin as having small amounts which i need to save for the future and utilise fiat to the extent possible.Fixing prices in btc is little bit cumbersome suppose you has board for 0.0005BTC for one item and then it fluctuates high/below then trader or buyers could be a loss so this is difficult for them at the moment but LN could be a possible solution for it.

It's not practical right now! Bitcoin is not free amd it has a production cost through hardware and electricity at least. So unless these peoduction costs can be paid in bitcoin, we have no other choice than benchmarking it agaisnt USD or any other local currency.

It is only possible when the entire production cost can calculated and paid in bitcoin and people can actually but goods and services in bitcoin without any inconvenience. Which I don't see happening anytime soon.

I hope this wouldn't be happen because if the governments or financial institutions has a huge shares of Bitcoin, they would manipulating the market by bought and sell it whenever they want. They can dump all of their Bitcoin in a single sell order, obviously this will make a panic if everyone see someone sell 15.000.000-17.000.000 Bitcoin. Making a bad news and they can earn profit by selling their coins? an untold story of bad side of the government.

That would mean btc is no longer pegged to any fiat currency which will automatically eliminate the volatility,  price speculation, btc becomes the number one currency that is universally accepted.
To own a btc will only be through providing a service and no more buying through fiat, all alts will be pegged to btc along with rest of all other assets (in other words, the entire economy operations will be in btc).

I think I will feel same as before, but what will change though is economic inflation and the gap between the haves and the haves not, since btc has a limited supply, I assume this will play key role in wealth distribution and also prevent government ability to print uncontrollable. However, coming back to reality @op this is highly unlikely to happen.  :)

But, it has been said that they hate btc and its volatility in its price so therefore people will avoid this idea rather than using it to price their goods but there are still solid btc believers that can do this. Usually these things can start to happen when a country start to make btc as a legal tender.

I feel good of course because if I have a btc, it also means that I am a btc enthusiast. I will like it more better if the world turn to btc instead of usd/fiat and other local currencies. Pricing things in bitcoin rather than in u.s dollar could mean a good thing for btc of course because that means that the end of u.s dollar is near. It also means that btc is soon to be made as a legal tender.

That has always been the dream. But unfortunately, it may never materialize because governments will continue to patronize Fiat no matter what. The US Dollar may be falling, but it won't disappear anytime soon. The same can be said about currencies from other countries. If the day where you can pay things with Bitcoin directly comes, then I'd imagine most of us will become filthy rich. A Bitcoin standard will surely fix the world.

I've heard about El Salvador and the Central African Republic making Bitcoin legal tender, so this is a step forward for "hyperbitcoinization" to become a reality. Who knows if other countries join the game, as Fiat continues to lose ground in the mainstream economy? Crypto is widely unpredictable, so anything could happen in the future. Just my opinion :)

Even if we look forward to bitcoin being used as a legal means of payment, of course we will also have risks too.
When a bitcoin has a high value price, of course we feel pleasure because we get big profits, but if the price is cheap as it is today, of course they will find it difficult to find other bitcoins to cover their losses.
And it is very different from the role of the dollar or other fiat money which does not have a drastic decline like the dollar, rising and falling prices can still be reached and different from the decline in bitcoin prices at any time.

As we have learned from our childhood, measuring price or calculating in a unit which we are familiar is easy. Because we have learned that over and over.
As BTCitcoin have some time high price and low price depending on the market condition, it will be hard to price goods based on BTCitcoin.
And in the end people will still calculate or, in other word, convert the value of BTCitcoin into US $ for the price.