A topic I've been thinking about...
Before I explain, if you're unfamiliar with Bitcoin and cryptocurrency, here's a YouTube playlist breaking down the history of money, currency and how Bitcoin works:
Disclaimer: I'm not an Economist so my POV or math might be flawed.
Now, here's my pitch...
It baffles me that we rely on a FIAT-based Market Cap for Bitcoin's value, aren't we supposed to be moving away from the FIAT system with the help of crypto/blockchain tech?
The Lightning Network helped speed up the currency adoption, but it's still reliant on FIAT valuation which not only suffers from extreme volatility scaring away merchants/providers to accept BTC for payment but in my opinion, it's not the best way to think about how to use the Bitcoin protocol – we should consider how to utilize the Bitcoin code's protocol to properly trade goods and services with the network's value measured by the GDP provided by its users, without any reliance on FIAT Market Cap.
Hear me out...
The U.S. abandoned the gold standard in 1971 – so FIAT isn't backed by anything (it's merely digits on a screen) so the volatility in Trade Markets is irrelevant since BTC should be backed by the Bitcoin Network's GDP – not FIAT.
A suggested FIAT-to-BTC "Anti-volatility Conversion Rate":
BTC has a 21M Max Supply ÷ 11B Global Population by the year 2140 (last mined BTC) = 0.0019 BTC per person for equal allocation (0.19% of 1 BTC = 190k Satoshis ––– *excluding lost/irretrievable coins.)
Now the question is, how do we value, price, and trade with "0.0019 BTC per person"?
0.0019 BTC ÷ $10k (median annual income in USA in 1971) = 0.00000019 BTC
This would make market rates for Goods & Services as:
$1 = 0.00000019 BTC
$10 = 0.0000019 BTC
$100 = 0.000019 BTC
$1k = 0.00019 BTC
$10k = 0.0019 BTC
$100k = 0.019 BTC
$1M = 0.19 BTC
$10M = 1.9 BTC
$100M = 19 BTC
Does this conversion rate & overall idea make sense? If so, why aren't we putting thought and energy into perfecting this type of utilization with Bitcoin? Or if this idea is not applicable, why not?
Chime in on the comments if you have any feedback...