How To Base Value of Goods and Services To Bitcoin?

[worldtraveller321]

Now if we all want to make Bitcoin the standard. Right now sure you can use Bitcoin to buy goods and services with. However all goods and services value and price are based by some sort of Fiat.

How do we go about to determine Good and Services value entirely on Bitcoin?

over FIAT

this could take a very long time to make happen.

What methods do you think this could happen?

[Upgrade00]

How do we go about to determine Good and Services value entirely on Bitcoin?

This is a question I have been puzzling over for a long time now. To answer this, we have to take a look at the current fiat system and how it functions; The value of fiat is determined by the countries economic strength and policies which affect supply and inflation, it is also heavily influenced by demand and supply on currency trades. It does not have any inherent value.

Bitcoin as a staple currency for buying goods and services would function in a similar manner, demand and supply would determine its value and at this point it would be much more stable than it is right now. But this is such a far away time that it would be difficult to determine how it would work from now.

[OgNasty]

Now if we all want to make Bitcoin the standard. Right now sure you can use Bitcoin to buy goods and services with. However all goods and services value and price are based by some sort of Fiat.

How do we go about to determine Good and Services value entirely on Bitcoin?

over FIAT

this could take a very long time to make happen.

What methods do you think this could happen?

Bitcoin is an absolutely horrible mechanic for pricing things over time.  This is due to it's extremely limited supply and constant price volatility.  Outside of crashing currencies destroyed by hyperinflation, Bitcoin is the worst "currency" you could use to measure the price of an object over time.  The chart of seemingly every item in the world looks the exact same when denominated in Bitcoin over the last 10 years.  This is because the value is more effected by the price movement of Bitcoin then anything happening to the price of the underlying object being priced. 

I don't think there are methods that could make this useful or that it should be something we should even attempt.  Many Bitcoiners think the price will continue rising against the dollar forever, and if that's the case then Bitcoin will be a bad metric for valuing price over the long term, forever.

[uneng]

That is simple. Just check how much people are willing to pay for the service or product in your local fiat currency and then convert the amount for bitcoin, using its currently rates which can be instantly found on google or coinmarketcap, for example.

If you want to give an extra motivation to make people use bitcoin as currency, charge a little less than you would charge for the service or product, if they were going to pay with fiat.

It's impossible to value stuff ignoring fiat currencies' rates. To use only bitcoin for this purpose would be too abstract. In order to find accurate prices for goods and services we must take in consideration the local currency of our country.

Maybe someday if wages were paid in btc, and a calculation were developed to show how many % of your income should correspond to rent, bills, food, fuel and so on, we could start valuing things solely using bitcoin for it.

[Stalker22]

One question that was often asked when discussing the value of Bitcoin, is whether it is going to have a lot more applications and have greater use in real life in the future or whether it is still just an experiment in economics and it is going to never be widely accepted. I can't say what will happen in the future, but I can say that Bitcoin is already here and has proven itself worthy of being placed in the same category as fiat currencies.

The value of Bitcoin has to do with the ability for a person to trust in it as a currency. There is no central bank to go to for support and stability, but at the same time there is no issuer to try and manipulate or control the market for it. It is all driven by demand and supply; It is scarce and the supply is governed by the protocol which dictates how many Bitcoins can be mined with each block. As with any currency, the value of cryptocurrencies depends on their scale of community involvement. As they grow in use, the value will increase proportionally.

[aoluain]

Its an interesting consideration.

If we forget about FIAT would we be happy to accept a Bitcoin amount for
goods and services like 1kg of Apples = 0.00005BTC, regardless of the FIAT
value of Bitcoin we just think in Bitcoin.

But there are too many factors which work against this, will we still need to
convert Bitcoin to FIAT to pay our bills? if yes its pointless pricing in Bitcoin,
it would be an ideal scenario if Everything was priced Bitcoin but because
of its limited supply its just not going to happen.

[franky1]

Its an interesting consideration.

If we forget about FIAT would we be happy to accept a Bitcoin amount for
goods and services like 1kg of Apples = 0.00005BTC, regardless of the FIAT
value of Bitcoin we just think in Bitcoin.

But there are too many factors which work against this

we COULD actually create our own 'measuring stick' instead of measuring to dollar and then from dollar to other forex fiats

like you say we could measure it to apples or say minimum wage hours.
however an apple is not then pegged to other goods/services.. so complicated to use apples as the measure of value

yet take minimum wage law as a more defined value measure. but i dont mean the $ value. i mean the HOURS

where by this would benefit by equalling out the poverty inbalance of the world if a good peg was used where value can be recognised from it.

right now someone in california where min wage is $15 an hour only needs to work 2800 hours to get 1btc ($42k)
where as someone in asia only getting $2 an hour has to work 21,000 hours ($42k) to get 1btc
seems extremely unfair right now for the asian population, right?

but by bitcoin creating its own poverty neutralising 'measuring stick' value as X minwage hours. then this can level everyone.
so lets say that right now btc was 4200 min wage hours. people in california will at first complain that they have to work more. but then in more impoverished countries will work less, a heck lot less, where they both end up working the same number of physical hours to afford to both buy 1btc each.
thus levelling out the geographic wealth gap
where by then people trade in 'minutes' and 'hours' instead of $

EG market exchange rate is 4200h32m12s
where each exchange knows the national amounts and when people deposit their national currency it converts that currency into hours minutes and seconds. and the 'price of bitcoin' fluctuates in minutes and seconds rather then dollars and cents

[hatshepsut93]

Bitcoin does not exist in a separate world from fiat, and since fiat is the dominant currency, no one is really going to calculate prices in a highly volatile currency like Bitcoin first. The closest thing to what you are asking is various crypto to crypto markets, like tokens or NFT, since all the deals happen in crypto, and you can see that the prices often remain stable even if the broad crypto market experiences rapid price changes.

[franky1]

Bitcoin does not exist in a separate world from fiat, and since fiat is the dominant currency, no one is really going to calculate prices in a highly volatile currency like Bitcoin first.

the foolish thing is though..
only 320mill people use US dollar where as over 1.4billion people use yuan..
yet someone at some time decided we should peg bitcoin to US dollar and we stuck with it.. for CONVENIENCE

we CAN change this convenience. there is no law that says bitcoin needs to be valued to the dollar.

im not saying get all goods in the world to mention a bitcoin price.. im suggesting instead changing how bitcoin is valued. to no longer be stuck against the us dollar

[fzkto]

I don't think valuing goods in bitcoins as a major currency will ever happen. Bitcoin is an unofficial international means of payment, I would even call it a phenomenon. Pricing is tied to local local currencies, which bitcoin is not. Therefore, there will be conversion relative to local currencies everywhere.

[Marvelman]

I don't think valuing goods in bitcoins as a major currency will ever happen. Bitcoin is an unofficial international means of payment...

If you haven't heard by now, Bitcoin is now legal tender in El Salvador. So it has already happened. Hopefully this is just the first of many countries to follow.

I would even call it a phenomenon. Pricing is tied to local local currencies, which bitcoin is not. Therefore, there will be conversion relative to local currencies everywhere.

Are you aware that there are countries without their own local currency? What about them?

[aoluain]

snip

snip

EG market exchange rate is 4200h32m12s
where each exchange knows the national amounts and when people deposit their national currency it converts that currency into hours minutes and seconds. and the 'price of bitcoin' fluctuates in minutes and seconds rather then dollars and cents

That sounds good, its actually a global standardised rate. Two questions though,

1. If time is constant and the supply of Bitcoin to the market is fixed wouldnt
that make the Bitcoin rate also fixed?

2. what are the arguments against this system?
.

I don't think valuing goods in bitcoins as a major currency will ever happen. Bitcoin is an unofficial international means of payment...

If you haven't heard by now, Bitcoin is now legal tender in El Salvador. So it has already happened. Hopefully this is just the first of many countries to follow.

I would even call it a phenomenon. Pricing is tied to local local currencies, which bitcoin is not. Therefore, there will be conversion relative to local currencies everywhere.

Are you aware that there are countries without their own local currency? What about them?

We know this but whet happens in El Salvador is the Bitcoin price is converted
from the US Dollar. The OP asks the question:

How do we go about to determine Good and Services value entirely on Bitcoin?

[Poker Player]

Bitcoin does not exist in a separate world from fiat, and since fiat is the dominant currency, no one is really going to calculate prices in a highly volatile currency like Bitcoin first. The closest thing to what you are asking is various crypto to crypto markets, like tokens or NFT, since all the deals happen in crypto, and you can see that the prices often remain stable even if the broad crypto market experiences rapid price changes.

That is the point. If at some point you come to value products and services only in Bitcoin, it will be because you will have first gone through the phase of valuing them in fiat first and then doing the calculation of the Bitcoin equivalent. Subsequently, if fiat currencies are very weak or collapse, only the valuation in Bitcoin would remain as a reference measure and other currencies would have to make the calculation.

[pooya87]

I don't see this as complicated as some people make it to be. Deciding value of any goods in bitcoin is the same as deciding their value in fiat. The only difference is that fiat is inflationary while bitcoin is deflationary and currently volatile. This means price of everything will go up against fiat while it goes down against bitcoin.
Even volatility is not a big deal, it is just unusual to most people in the world because they don't experience high levels of currency devaluation every day even though it happens. For example in 2008 we had US dollar tank, in 2019 we had Venezuela currency tank, ... each causing big drops in fiat value and volatile states.

[franky1]

EG market exchange rate is 4200h32m12s
where each exchange knows the national amounts and when people deposit their national currency it converts that currency into hours minutes and seconds. and the 'price of bitcoin' fluctuates in minutes and seconds rather then dollars and cents

That sounds good, its actually a global standardised rate. Two questions though,

1. If time is constant and the supply of Bitcoin to the market is fixed wouldnt
that make the Bitcoin rate also fixed?

2. what are the arguments against this system?

1. measuring against time. does not mean measuring against a fixed amount of time forever
EG instead of changing dollars and cents you change minutes and seconds

2. some argue that it must require some middle man to decide the value..
but that argument is moot because who the F%&k decided everyone needs to measure against dollar

i know people want to keep bitcoin connected to dollar. but then thats actually deciding for people. thus counter-arguing the counter argument

there is nothing stopping this system from being adopted apart from people refusing to adopt it.
the main reasons why wall street would hate this is because

a asian person working 4200hours (Y12.6*4200=Y52920) can get bitcoin. (at forex Y52920=$8376)
and then sell it for 4200hours of america fiat min wage value.($15*4200=$63,000)
 and then use forex wallstreet to swap $63,000 for yuan  Y398,040
basically making the asian 7.5X richer per flip.

ending up with bitcoin actually causing the forex market to then crash and level up where eventually Y1=$1

but dare anyone ever try using bitcoin to cause an effect of the forex market.. hmm.. yea expect alot of hostility and anger if anyone dared thinking outside of the box that bitcoin can actually cause wall street market effect

[crwth]

I don't think we will ever experience it soon because we are still tied to the dollar system or believe that everything has a price, and it's always in terms of your local currency or something. On the other hand, it's nice to think that it can be like that, but it's not wise for those who don't believe it entirely.

Maybe if we reach the point that it's going to be Service = amount of BTC, then that's that.

As time goes by, it's always going to go back with how much the price is.

[witcher_sense]

Now if we all want to make Bitcoin the standard. Right now sure you can use Bitcoin to buy goods and services with. However all goods and services value and price are based by some sort of Fiat.

How do we go about to determine Good and Services value entirely on Bitcoin?

Okay, and if fiat money suddenly disappeared, would it be possible to obtain everything you want for free? I highly doubt it, which is why I think it is not money that gives value to goods and services, but the intrinsic characteristics of goods and services themselves. But that is not all. No matter what qualities a particular thing possesses, it won't have any real value unless some people recognize its value. Each thing will have a different value. People, when comparing two things of different values, will use their reason to assess the proportion: how many things of one kind they would give for things of another kind. Given that the number of goods and services that need to be evaluated against each other is enormously high, and given that the number of people in the society who are trying to measure value is very high, it is logically justified for people to come up with something with which to measure the interpersonal value of different things. In other words, money. Money doesn't have a price, its value is always expressed through different commodities. So, the purchasing power of Bitcoin is determined through the number of goods and services available, which in turn is determined by the laws of supply and demand: the rarer a certain good, the higher price in terms of bitcoin it will have. In the bitcoin economy, prices will fluctuate significantly, they will never be stable because the amount of available goods and services also fluctuates. If you notice that the price of a particular good has fallen, that means that too many goods of this kind are available on the market, that is, the supply of it is higher than the demand for it.

[Mauser]

How do we go about to determine Good and Services value entirely on Bitcoin?

over FIAT

this could take a very long time to make happen.

What methods do you think this could happen?

This seems only possible if we change the mind of the consumers. The main problem here is that most people are still being paid in fiat money each month. So when ever they make purchases they will put the goods on relation to their monthly salary. For example, for a new ipad they would have to save 4 month. Even if the price was in bitcoins of the ipad, I expect most consumers to convert it into USD when their salary is being paid in USD. A good start would be to switch some part of the employee compensations into bitcoins. Maybe starting with the Christmas or vacation bonus. The more money is being paid into bitcoins, the more consumers would start budgeting their monthly money in bitcoins also. This will probably still take some years to achieve.

[fzkto]

I don't think valuing goods in bitcoins as a major currency will ever happen. Bitcoin is an unofficial international means of payment...

If you haven't heard by now, Bitcoin is now legal tender in El Salvador. So it has already happened. Hopefully this is just the first of many countries to follow.

I would even call it a phenomenon. Pricing is tied to local local currencies, which bitcoin is not. Therefore, there will be conversion relative to local currencies everywhere.

Are you aware that there are countries without their own local currency? What about them?

I know about Salvador, but I don't think it's a good example. The standard of living there is low and unemployment is high. And as has been said here, bitcoin is converted to dollars anyway. Countries that don't have a national currency focus on another currency, but not bitcoin. Exports and imports are valued mainly in dollars.

[tranthidung]

It's not a standard yet but if you have a platform which accepts Bitcoin as one of payment method, you will have difference prices with fiat, Bitcoin exclusively.

It is not too common because Bitcoin has yet been legal tender in many nations but it will be changed in future, I believe so. Bitcoin is a game-changer and it has changed the world so much. It will keep up its mission for wealth and freedom of global citizens. Obviously, for people who can accept it.

Soon after CBDC tracker and more CBDCs launched, we will see bigger adoption and more widely legal tender for Bitcoin.
https://cbdctracker.org/