10 sats \ 5 replies \ @cryptocoin 13 Feb 2023 \ on: When Bitcoin standard? bitcoin
The price for a frozen pizza at my nearest grocer occurs as the result of numerous factors. Underlying nearly all of those factors is contractual obligations. For instance, the costs for the grocery store for electricity, wages, building lease, etc are all denominated in dollars today. The same goes for the food processing that sourced the ingredients and produced that frozen pizza. And for the farmer who uses futures contracts for selling expected production of the commodities -- also currently all dollar-based contracts.
So while the electronic pricetag on the shelf (or my shopping concierge app on my phone) might tell me what is the price, in bitcoin, for that pizza, that price is still going to be computed starting with a price in dollars that is then converted to bitcoin based on the real-time exchange rate for bitcoin.
Only if the underlying contracts also were to occur denominated in bitcoin would the price for that frozen pizza fluctuate less (in bitcoin terms).
But would these contracts ever become denominated in bitcoin? Maybe the futures contract for the farmer who produces corn is denominated in some measure of value that more closely ties to the price of oil, or something like that.
But as far as me being able to see pricing in bitcoin, that could happen almost immediately, just as I can know the price in Euro of anything simply by converting from the dollar price, using the real-time exchange rate.
Yeah, there's a difference between "just in time conversion to sats", which as you say, you can convert to any currency on the planet, and "denominated in sats", which means natively priced in btc with no conversion.
I'm starting to think >> 10 years, ~30 years, is the more realistic option due to all the factors you mentioned.
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But why would it be bitcoin? Again, the price that I'm asked to pay for that frozen pizza might be shown to me, in bitcoin units, but looking forward a decade from now, nonetheless three decades, perhaps that amount of bitcoin presented to me is computed in real time based on a basket of components -- all used to compute in real-time the price the grocer is willing to sell a frozen pizza to me.
Why might a grocer go through all this just to establish the price to charge for a frozen pizza? Because my offer to buy a frozen pizza might get routed to a number of grocers, and my shopping concierge app will find the grocer selling at the best price, considering, of course, the cost for transport from that grocer to my house (performed by Tesla's automated fleet of autonomous delivery wagons).
So in that instance, that grocer is setting the price of the pizza based on the cost from the supplier to restock that pizza, the cost of the grocer's labor that day, the cost of electricity (for keeping the inventory refrigerated), the cost of building's lease, etc. All those might be presented in bitcoin using "just in time" / spot price but the amounts will be based on the underlying components, and will fluctuate in price -- whether they are communicated in bitcoin, or dollars, or other commodity currency even (barrels of oil).
But it will all happen behind the scenes by software. So I think your list of answers to the question needs another option -- either "never" or "invalid question".
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Sure, but the question I'm asking is simple: when do vendors selling the items I listed use sats as a unit of account without doing conversion from fiat to sats.
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Which was why I was trying to make my point ... which I'm having a hard time describing.
I don't think we ever go from using a fiat metric (e.g., USD) as the unit of account to going to using BTC as the unit of account.
I think the price for a good or service will involve a calculation using the underlying data sources in real-time (or close to it). These data sources could include commodity prices, labor costs, property costs, and capital (interest rate) costs, etc. Then once that calculation provides a result, then that is what then gets spit out as the "price" ... in BTC, or in USD, or in EUR -- in whatever medium of exchange the buyer wants prices presented in.
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OK I see what you mean - you think we may never see hyperbitcoinization so there should be a "never" option in the poll.
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