How do Bitcoin Circular Economies Work in Terms of Price Discovery? \ stacker news ~bitcoin

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How do Bitcoin Circular Economies Work in Terms of Price Discovery?

401 sats \ 6 comments \ @spiderman 9h bitcoin

So, I just came upon this interesting clip (from BBC, nonetheless) on another Bitcoin circular economy (BCE), this one thriving in Kenya.

I never travelled to one myself, but it got me wondering, about these BCEs

Not to be a cynic, but are they a flash in the pan, or do they usually survive a Bear market?
From some other videos like from @JoeNakamoto, it appears many of them are dependent on a stream of donation of regular Sats, is it really true?
And finally, how does price discovery (between Sats and everyday items) work in those economies? Are the prices still denominated in local fiats and the conversion happens at every purchase? Or somehow by negotiation we get a Sats denominated market clearing price for everyday items?

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278 sats \ 1 reply \ @SimpleStacker 7h

Not to be a cynic, but are they a flash in the pan, or do they usually survive a Bear market?

I think it depends how much of their economy still depends on interaction with fiat businesses. If a lot, then it will be difficult to survive a bear market.

From some other videos like from @JoeNakamoto, it appears many of them are dependent on a stream of donation of regular Sats, is it really true?

I wouldn't know, but it would not surprise me. Even it seems on SN people try to beg for bitcoin by telling us they are from developing countries.

And finally, how does price discovery (between Sats and everyday items) work in those economies? Are the prices still denominated in local fiats and the conversion happens at every purchase? Or somehow by negotiation we get a Sats denominated market clearing price for everyday items?

It should work the same way as any other economy. Supply and demand. If merchants see that their inventories are selling out quickly and there's still more demand, that's a signal to raise the sats-denominated price of their goods. If merchant inventories are sitting on shelves and they can't sell them, it's a signal to lower prices.

0 sats \ 0 replies \ @DarthCoin 2h

It should work the same way as any other economy

100%

1 sat \ 0 replies \ @DarthCoin 8h

It's quite simple: spend less than you earn. Spend wisely your sats.

0 sats \ 0 replies \ @d680ecaa8e 3h

You raised an important point because without donation of regular sats you can't do anything like the one you mentionned.

0 sats \ 0 replies \ @BlokchainB 4h

And finally, how does price discovery (between Sats and everyday items) work in those economies? Are the prices still denominated in local fiats and the conversion happens at every purchase? Or somehow by negotiation we get a Sats denominated market clearing price for everyday items?

This is something I struggle with to understand myself. The supply demand approach makes sense but outside market forces come into play thus can change price signals beyond just supply and demand

0 sats \ 0 replies \ @Kael_Yurei 5h

These moves may be a bit risky. They can leave vulnerable communities exposed. The volatility, lack of regulation and reliance on donations make the whole venture unstable. It is not a way to build an economy, it risks becoming a bubble or a waste for the weakest.