Somewhere in the possible near/far future when there might not be any major fiat anywhere. What will Bitcoin's purchasing power be measured in?
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3Same as what they do for fiat currency: Big Mac Index.– Greg HewgillNov 11, 2015 at 1:14
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1@GregHewgill bitcoinppi.com just started up- it shows how many big macs you can get for 1 btc– Riley PottsNov 18, 2015 at 21:42
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3 Answers
If in this hypothetical scenario there weren't any other unit of account available, it would be necessary to use some kind of consumer price index.
Fortunately, besides fiat currencies, there is also gold as unit of account. So, in case all fiat currencies are gone, you could use gold to measure the purchasing power of bitcoin.
It's typical to measure the purchasing power of currencies using something like the Consumer Price Index, so this is probably would be used if Bitcoin were to become a dominant currency.
Basically, you would develop a "market basket" of goods and services that people commonly buy, and perform some sort of survey to determine what these goods and services currently cost (in Bitcoins). Then take some weighted average to come up with a single number that, roughly speaking, measures the overall Bitcoin price of goods, or equivalently, the purchasing power of a bitcoin.
answered Nov 12, 2015 at 16:41
There is now a BitcoinPPI (Bitcoin purchasing power index) available:
It uses the BigMac index published by The Economist and calculates a global weighted index and a local index for 41 countries.
There is an API for all data and the sources are also available.
Disclaimer: I have no opinion on the taste of BigMacs ;)
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Sorry, I saw the comment a bit later. Someone on twitter, or was it reddit? pointed me to that questions, so I felt like jumping right on answering it.– OverbrydNov 20, 2015 at 20:28