Bitcoin Purchasing Power Over Time

[Wladislaus]

Hi all,

Long time lurker, first time poster.  Welcome me at this intro thread if you like.

My question about Bitcoin comes in the form of purchasing power.  Suppose a well-liked yet hotly-debated projection is achieved and BTC hits a price target of 300,000 USD in or around 2016.  Does that price target account for what the USD will purchase some 2-ish years from now?  Is that $300k figure in 2014 dollars?  Has anyone accounted for this?

I only ask because I don't have much faith in the USD keeping its purchasing power much longer.  If BTC hits $300k, but a cup of coffee costs $1,000, has Bitcoin really gone anywhere?  I'm just wondering if anyone is taking into account the value of the fiat currency that backs the Bitcoin value.  We all price BTC in [insert fiat currency], so it seems natural to me to ask what a BTC will actually purchase in the future, regardless of the ## value of the currency that we price BTC in.

Maybe it might be better to price BTC in the future against commodities that have tangible value?  Corn, wheat, frozen concentrated orange juice, even gold maybe?  Or better yet, why not just price other goods and services in BTC?  That seems to be the ticket right there.

Just looking for clarification is all.  And perhaps some much needed intelligent stimulation?  Perhaps.

[podyx]

almost all people when they refer to, lets say $10k/btc, they mean $10k as in todays purschasing value

[Sindelar1938]

Yep, the implied reference point is today's $

[Wladislaus]

Ok thanks, that's kinda what I was hoping for honestly.

[Elwar]

I usually take into account the likelihood that the USD will lose value when I project it to be worth $10k by 2016.

But that is only one factor. I also consider adoption rates and value added technology.

I always wonder at what point I should pay off my home mortgage...pay 5% per year or keep that money in Bitcoin and make over 1000% per year?

I have concluded that I will reserve 1 Bitcoin solely to pay off my mortgage. That is based both on the fact that the USD will lose that much value and that Bitcoin will gain that much value.

[niothor]

First mistake is that you assume everybody is talking about the price of BTC in $. There are lots of people who deal with euro<>BTC , and i am sure that the usd and euros won't go down the same rate.
The price of "Corn, wheat, frozen concentrated orange juice" also fluctuates depending on many factors so it won't be a good choice.

Pricing BTC against a basket of commodities will be a better choice but that will get to technical for most

[Teodor]

There 154 currencies you can trade online and offline so don't worry just be happy
Many of them are already on Bitcoin markets too.
I have traded BTC for RON and got very good rates, thinking even to make some arbitrage in the future.

[niothor]

There 154 currencies you can trade online and offline so don't worry just be happy
Many of them are already on Bitcoin markets too.
I have traded BTC for RON and got very good rates, thinking even to make some arbitrage in the future.

This is most interesting (at least for me).  Where the hell did you traded BTC for RON?

[Teodor]

There 154 currencies you can trade online and offline so don't worry just be happy
Many of them are already on Bitcoin markets too.
I have traded BTC for RON and got very good rates, thinking even to make some arbitrage in the future.

This is most interesting (at least for me).  Where the hell did you traded BTC for RON?

   Copied from my BIO:
My name is Teodor M Muntean, entrepreneur, webpreneur, trader, renewable energy and construction business owner since 1989. Married with 1 beautiful wife, having together 9 wonderful kids and 9 terrific grandkids, living in Romania, a country with fantastic landscapes, nice people and bad politicians!

[Elwar]

There 154 currencies you can trade online and offline so don't worry just be happy
Many of them are already on Bitcoin markets too.
I have traded BTC for RON and got very good rates, thinking even to make some arbitrage in the future.

This is most interesting (at least for me).  Where the hell did you traded BTC for RON?

You can exchange for Ron at: https://www.btcxchange.ro/

[Teodor]

This is most interesting (at least for me).  Where the hell did you traded BTC for RON?

You can exchange for Ron at: https://www.btcxchange.ro/

Yes, I use this exchange and am very pleased with their services.  Hope they will keep it so forever!

[niothor]

This is most interesting (at least for me).  Where the hell did you traded BTC for RON?

You can exchange for Ron at: https://www.btcxchange.ro/

Yes, I use this exchange and am very pleased with their services.  Hope they will keep it so forever!

Had no clue about this website:). Thanks guys.
If you have used it , how long does it take for a withdraw to reach your bank account (using national bank transfer) ?

[Teodor]

This is most interesting (at least for me).  Where the hell did you traded BTC for RON?

You can exchange for Ron at: https://www.btcxchange.ro/

Yes, I use this exchange and am very pleased with their services.  Hope they will keep it so forever!

Had no clue about this website:). Thanks guys.
If you have used it , how long does it take for a withdraw to reach your bank account (using national bank transfer) ?

Here locally in RO takes few minutes up to half hour. I gues you are not from Romania, so in Europe through SEPA banks takes about 2-3 days, but if you live overseas or somewhere in America, Africa or Asia, it may take much longer...

[jamesc760]

If you think US$ is going to tank in the next few years, you are dreaming. I understand that US$ is INFLATIONARY currency, like all other fiat currency around the world. However, there's no way that a Starbucks coffee is going to cost $1000 in the next few years.

Full disclosure: I am a US resident since early 1980's.

I remember a gallon of gas (about 4 liters) costing about $1 in the 80's and 90's; now it's about $4/gallon. Also, a Big Mac cost around a $1, now it's around $4 too. So, yeah, in 20-30 years, inflation has caught up to be about 400 %, I'd imagine. Considering that US economy is a bit better from Zimbabwe or just about any other nation in the world, I'd say the possibility of a cup of coffee costing $1000 in the next few years to be zero. Maybe in the next 50 years.

[niothor]

This is most interesting (at least for me).  Where the hell did you traded BTC for RON?

You can exchange for Ron at: https://www.btcxchange.ro/

Yes, I use this exchange and am very pleased with their services.  Hope they will keep it so forever!

Had no clue about this website:). Thanks guys.
If you have used it , how long does it take for a withdraw to reach your bank account (using national bank transfer) ?

Here locally in RO takes few minutes up to half hour. I gues you are not from Romania, so in Europe through SEPA banks takes about 2-3 days, but if you live overseas or somewhere in America, Africa or Asia, it may take much longer...

Yes I am:).Thanks for the info. Sorry for the off-topic guys

If you think US$ is going to tank in the next few years, you are dreaming. I understand that US$ is INFLATIONARY currency, like all other fiat currency around the world. However, there's no way that a Starbucks coffee is going to cost $1000 in the next few years.

Full disclosure: I am a US resident since early 1980's.

I remember a gallon of gas (about 4 liters) costing about $1 in the 80's and 90's; now it's about $4/gallon. Also, a Big Mac cost around a $1, now it's around $4 too. So, yeah, in 20-30 years, inflation has caught up to be about 400 %, I'd imagine. Considering that US economy is a bit better from Zimbabwe or just about any other nation in the world, I'd say the possibility of a cup of coffee costing $1000 in the next few years to be zero. Maybe in the next 50 years.

Checking right now some calculators for inflation as I get mixed results.
90- till now (24 years) it shows 83% no way near 400%

Of course the 1000$ coffee is almost impossible in two or 3 years , but in 10-20 , god knows what may happen

[arepo]

If you think US$ is going to tank in the next few years, you are dreaming. I understand that US$ is INFLATIONARY currency, like all other fiat currency around the world. However, there's no way that a Starbucks coffee is going to cost $1000 in the next few years.

Full disclosure: I am a US resident since early 1980's.

I remember a gallon of gas (about 4 liters) costing about $1 in the 80's and 90's; now it's about $4/gallon. Also, a Big Mac cost around a $1, now it's around $4 too. So, yeah, in 20-30 years, inflation has caught up to be about 400 %, I'd imagine. Considering that US economy is a bit better from Zimbabwe or just about any other nation in the world, I'd say the possibility of a cup of coffee costing $1000 in the next few years to be zero. Maybe in the next 50 years.

Checking right now some calculators for inflation as I get mixed results.
90- till now (24 years) it shows 83% no way near 400%

Of course the 1000$ coffee is almost impossible in two or 3 years , but in 10-20 , god knows what may happen

not sure how you came about that figure, but it is, unfortunately, impossible to do a proper calculation. inflation rates are likely underreported on the one hand, and don't take into account the approx. $85 Billion being pumped into banks monthly as part of QE. you'd be surprised how much bigger of a problem inflation is than what is commonly understood. i also believe that, due to nominal price increases in things like gas and coffee, that real total inflation is around 300-400% since 1990.

--arepo