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I wrote the following as an answer to a question and thought it would be a nice beginning to this post - I am going to get into a few more details on the business model:
I believe "property management" and all businesses for that matter, are going to be converting/transitioning to a bitcoin business model.... I think a lot of people right now are trying to run their businesses as "normal" and are just adding Bitcoin as a payment rail or as a store of value...
If - Bitcoin is actually going to be the base layer for our monetary networks and is going to remain decentralized and secure - Then - Bitcoin is going to change all our models....I think when "Saylor" says "all your models are broken "he isn't just talking about all the modelling of the "fiat value" of Bitcoin he literally means....all the models....whatever that may be....including our Business Models built on FIAT....
Building a "fiat business model" business on top of Bitcoin - just doesn't make any sense to me...What if, successful businesses in the future are going to be ones that are built on Bitcoin (from the ground up). If - the world we live in is actually deflationary and prices fall to the marginal cost of production - and Bitcoin remains as the base layer, store of value, immutable ledger then - all successful businesses built on this system have to be built on a model that aligns with this system...
In other words - if you have a property management business - and your product is the building/apartment/amenities/service - and the prices of these products will continue to fall to their marginal cost of production (in Bitcoin terms) - the most successful businesses are going to be those built most closely in alignment with this new system.
I know that the value of my building is falling in "Bitcoin" terms... I also know that it is likely to fall in "FIAT" terms at some point in the future as well... I also know that the value I provide to my residents is in keeping the building in good shape and keeping the "rental rates" as affordable as I can....
Well in my mind, if I can transition my buildings out of the "FIAT" ponzi scheme that they are stuck in and build the business on a Bitcoin Standard - I will beat all the other "models" out there..."beat" is probably the wrong term here...maybe continue to operate successfully over the long term is the better way to think about it? The mindset of making a profit, or "mining" or extracting FIAT value from other humans is not going to be successful on Bitcoin over the long term? "Successful" businesses built on Bitcoin will be the ones that find the true "value" of their product/service...
Ok - roll with me here....I am figuring this out as I type....
I mean...if Bitcoin becomes or IS this base layer and if Bitcoin remains decentralized and secure, then doesn't a business model that is "decentralized" follow? I mean in my business, I am the centralization? In the apartment world, we say or tell ourselves that the "market" dictates what our rental rates are? But if we are being honest, many owners of properties are constantly leveraging their ability to "maximize" their profit by obtaining better financing terms, or paying the lowest amount they can for work while charging as much as the market will allow them to charge for their rents...(which again needs to be enough to cover their costs and provide as much "profit" as possible)....but "what if" or "as a result of" building a business on Bitcoin...this model is or "can be" flipped (it doesn't have to be? but those businesses that don't will be the ones the eventually crash and burn)???
like...(this could be for any business) but for mine.... if you live at my property, you in essence are my customer when you "purchase" your housing from me on a monthly basis...I provide you the safe, reliable, security of having a place to store yourself and your belongings and you provide me with a "value" that we agree upon for some regular period of time....now this "value" that we communicate to each other changes over time right....and as it stands under FIAT.... I communicate to my customer that my costs are always increasing and as such I need to pass those costs onto them in order to continue providing them the value....they agree because they "can't find anything more affordable" or "of better value" hopefully for me?
However with Bitcoin's ability to go up forever in FIAT terms....my costs can do the opposite if I am operating on a Bitcoin Standard....my costs will go down forever in Bitcoin terms, which as a business I can and should pass onto my customer...the businesses that can do this best and quickest and most efficiently will be those that are most successful over the long term time horizons....this is the "why" this system works...this "sharing in the price appreciation" works....this says to me...that all successful businesses operating in our current systems of both Bitcoin and FIAT probably need to operate as not-for-profits and actually provide their "value" to their "customer" at their actual costs...
It's like "we" the "market makers" will continue to slowly come to this realization, that the businesses operating on a FIAT model will continue to be those that seek to extract value from their "customers" and those built and operating most in line with Bitcoin's true nature? will be those that do best at sharing or creating value with their "customers"???
Am I crazy here....I did re-read this once....and it sounds a bit crazy to me but also "rings" true....It is soooooo different from what has been that I feel as though I am missing something...but again this is the 8th month of my model of accepting bitcoin for rent and sharing the appreciation with my resident and they saved another $370.61 (in FIAT terms) on their rent...in realty they paid only 631,600 sats for their rent this month...and yet I received a total $1,095.00 (in FIAT terms) of value from them....this is blowing my mind and hopefully some others as well?
I think this is important for all of us to understand - as we are getting into building businesses on Bitcoin.
---- The next step on the business model ----
Funding
I will get to this soon....Hopefully this week but my I have a lot going on but I feel like this post was kind of a big one....I have to chew on it for a bit but...there is definitely more to come....I think this idea deserves to be fully vetted and I want to find a way to assure it is a business model everyone can adopt.
One of the things you're doing is tapping into the psychological asymmetry between prices rising and prices falling. People like paying less and they hate paying more. It's the opposite of the "sticky wages" problem that was part of the justification for an inflationary monetary system.
If you make an agreement with a tenant that they pay 0.010 BTC per month and you're able to reduce it to 0.009 BTC, they'll be happy about that. On the other hand, if the agreement is $700 per month and you have to raise it to $770, they'll be pissed. All the while, this only happened because the exchange rate between BTC and $ changed.
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I agree that it certainly taps into the psychological side of things for people renting and everyone's' desire to pay less or get a good deal....
However I think it does a bit more than just that....
It allows me, as a Bitcoiner a method that incentivizes my resident's to utilize the network in a method that helps us both....I get the "value" of rent paid in Bitcoin (which allows me to do many things with my business-mainly demonetize the FIAT value of my building by storing its value on the network(for one)) and my resident benefits through the potential lower cost of living through the splitting of the price appreciation...
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Yes, it does a lot more. I just wanted to point that one thing out.
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Well I don't necessarily think it has to be nonprofit, but "nonprofit" is a bit tricky on a Bitcoin standard isn't it? You can provide value for free and the value you provide increases overall productivity and an increase in overall productivity increases the value of your Bitcoin, therefore you've profited, but in this sly roundabout way that most people wouldn't think about.
I don't want to sound too optimistic. Careful evaluation is important in these matters, but maybe, just maybe this is how we can achieve Aristocracy instead of Oligarchy and Polity instead of Democracy.
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I know that the value of my building is falling in "Bitcoin" terms... I also know that it is likely to fall in "FIAT" terms at some point in the future as well
Can you explain why the fiat value of your building will eventually fall?
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Likely due to recessionary forces - though I could certainly be wrong...it is simply extremely difficult for me to imagine any of my real estate holding being worth the FIAT value they are accessed at.....but try arguing that with the government entity that is incentivized to annually raise the assessed value of the real estate in their jurisdictions in order to consistently increase their tax revenues???
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