TLDR; This post is about spending bitcoin without thinking in fiat.

There’s your “retirement stack”, you know, the one you DCA and put away into your multi-sig and don’t need to think about until you get old. For that stack, we guess it might be ok to keep thinking in fiat. The jury’s still out on that one. Then there’s the one on your Zeus/Phoenix/Muun wallet; or if you’re hardcore, your own lightning node; which you’re happy to spend. We want to take a few minutes of your time to forget about the first stack and focus only on the second stack for now. If you don't believe in spending bitcoin, for instance you might not earn enough and need to save every single SAT for your future, that's cool too but this post probably won't be interesting for you (sorry it's quite a long one).

WHY IS THIS SO IMPORTANT??

There are still way too many interactions with the existing Fiat system. The censorship resistance stops as soon as you want to do normal things like pay your bills because you need to cash out. What we gonna do when the CBDC finally comes? Write angry posts about it on X? The majority of the world's population will not be protesting. They’ll sleepwalk into it just like everything else. That's why even today, despite having nice, simple solutions like Umbrel with a great UX, almost no one goes through the effort of actually using it to store everything on their home server. Instead, they use iCloud, Google Drive etc. Normies (and a lot of plebs) will always choose convenience over self-sovereignty. We don’t blame them, we know it’s hard. You have to really want it to go through the effort. But since normies make up 90% of the world's population, if we truly want to change the world for the better, then we need to do things differently, a bit more radically than today. . . .
So let’s go …
This week, we had a long brainstorming session as we do, once a month and this time an idea came up that we’d like to share with a wider audience in order to hopefully get some constructive feedback. The last time we posted here, we received a ton of awesome feedback from all the stackers and spent the next few months learning and trying out all those amazing suggestions. So we came to the conclusion that Stacker News is the best place to nourish bold ideas.
It's possible that people have thought about this before. In fact, maybe some plebs out there are doing this already. If so, please let us know so that we can have a look and see how it's going. After scouring the interwebs, the closest thing we could find was this post from Samourai Wallet from back in 2018 where they decided to remove all fiat currency conversions from their app. Damn they were EARLY. Kudos to them for that way of thinking. But this is on the wallet side and that’s not what we're discussing here. What we were talking about in our session was on the retail side, where prices are actually set. For digital products, there are several streaming SATs apps like Fountain, where this concept is widely accepted by users. Hell even Stackers right here is a SATs only land. But that gets destroyed as soon as you go over to any kind of product or service, when “pay with Bitcoin” simply means “pay with a fixed fiat price using Bitcoin”.
First of all, the idea we’re presenting is something that can be tried anywhere in the world on any continent, except for countries where bitcoin is banned which is like 5 out of 200. If there’s anyone reading this who runs any type of business, even if it’s a small informal market stall, you’ll understand that nobody dictates to you how to set your pricing. At least not if you’re in a free market economy which is basically everywhere, even in China. Now given that each business is free to decide their prices, then one could say that pricing is set based on a few metrics, such as expense ratios, market demand etc. So the first question is, why is it the majority of bitcoin product businesses still price things in fiat? Could it be because they assume their customers want to see that price in fiat? But their customers are plebs, so what gives? Let's dig further. Why is it that when some dream about the future they say, “one day everything will be priced in btc and it will become the denominator instead of the numerator”. Why one day? When does that “official changeover” happen? Doesn’t it start with a few that take the lead and then the rest will follow?
The most interesting use case would not be a typical bitcoin business like a MicroStrategy or a Trezor, but a normal retail store where people do their day-to-day shopping. On the retail side, one of the most game-changing and impressive implementations for us, was that of Carel van Wyk and Carl Kritzinger from CryptoConvert getting Pick n Pay to implement lightning payments. What's so groundbreaking here is not the ability to pay with bitcoin. It’s the type of store (nationwide) and the number of products they stock, combined with the fact that this was done post-lightning. Overstock was an early adopter way back in 2014, but that was L1 on-chain, not practical for payments and they don't sell groceries. With Pick n Pay, you can literally buy any essential items for your home, including food. This significantly reduces the friction when it comes to living a bitcoin standard. The fact that it’s in Africa is so awesome, since our fiat system is a joke copied from the west (imagine taking something terrible, copying it and making it worse, much like Shiba Inu was a fork of DogeCoin). This means that anyone living close to any of their stores in South Africa can 75% bypass the existing financial system from day 1 of receiving their bitcoin funds. The only friction is to get paid in fiat, pay your rent in fiat, then immediately convert to bitcoin and off you go. It’s hard to stress just how much this moves the needle and hats off to the CryptoConvert team for pulling that off and a shout-out to the Pick n Pay owner/board for willing to be so early and bold to accept such a move, it's super cool. This would be equivalent to Walmart in the US starting to accept Lightning Payments. Of course in El Salvador you can do this everywhere, but the beauty of permissionless is that you can do something like Pick n Pay in nearly any country without having to wait for useless governments around the world to pass new laws.
So, what is it we’re suggesting here? We’re not suggesting Pick n Pay (or MicroStrategy / Trezor) start pricing things in SATs. That’s not low hanging fruit as they’re waaay too large businesses. Also Pick n Pay's backend systems are obviously fiat and none of the SATs they receive are actually kept. What we’re suggesting is that an ordinary pleb starts a small bakery. Why a bakery? Dunno, easy to start and run, fixed costs? It’s mainly ingredients, a physical store and one or two staff. Ok, these do vary a bit, but it’s not going to be enough to make a huge difference. If there is no demand, then you’d have gone out of business anyway, the pricing won’t be a game changer. Of course it doesn’t have to be a bakery. It could also be a food truck, parked outside of Bitcoin Park in Nashville, TN. Those dudes gotta eat right? If you pick that kind of location, you’ll know that the clientele would have no issues seeing prices in SATs and you’d also know that there’s enough of them around to keep you in business for the foreseeable future. Keep it small, keep it simple.
Now to the interesting bit, how to set the pricing? This is why you can’t choose large businesses like a Pick n Pay, because they’re dealing with way too many variables to try such an experiment. Also, they're facing normies. In order to try this out, your customers have to be primarily bitcoiners. The suggested approach would be to pick ONE product out of the entire stock and set a FIXED price. Once that works, you can gradually start doing the same to the rest of the items. We picked bread, because this is something that everyone has to buy, at least once or twice a week. They way we would price it is a loaf of bread at exactly 5000 sats. No point 99 or any of those ridiculous marketing shenanigans, just a pure fixed price. Ok, now you're asking, "but what about the price of bitcoin? It’s up 57% YTD!" Well, it’s also down 62% from the peak a few years back. The point is, it doesn’t matter, we’re talking about a loaf of bread not buying a house. Ok, so second challange, surely over time this won’t work because eventually 5000 sats will be worth quite a bit? We thought about that too. And the solution is - wait for it - reduce the price automatically by 10 SATs on the first day of each month.
What’s going to be happening here is that this price will gradually decline over time and after 30 years of running this business which is the normal time for your average mom and pop shop, the same loaf of bread will cost 1400 sats (5000 - 3600 or 12 months x 30). Did you know that most supermarkets adjust 40% of their products' prices every single week? Nothing to do with inflation, just their normal business practice to manage inventory and maximise profits. This is exhausting for the workers and a terrible experience for poor customers trying to decide where to save money on their groceries. In this case, your regular customers would know exactly what that loaf will cost them every single week throughout the year and for years to come. We call it - Predictable Pricing. More questions remain, "do we need to know how much 5000 sats is worth in fiat?" Yes we do, but only INITIALLY, so only when the price is first set. You see, everything out there is a figment of our imagination. Notice how a lot of SaaS websites have 3 or 4 product tiers and the one in the middle is always “recommended”. It’s playing with people’s minds of what is a “fair” price. Instead, the questions we should be asking are, (1) is this reasonable given the average difficulty adjustment for mining 5000 sats in the last 12 months and (2) would the average pleb have enough SATs at the start of every month to fill up their shopping basket and feed the entire family? In that sense, starting at 5000 and ending at 1400 after 30 years could work, because we have the one equation that the fiat system doesn’t have and that is a predictable supply. One could also add a third equation, (3) is there enough energy around the world for each pleb to mine enough sats to live on? But let’s not go that deep for now, we’ll save that for another post. Btw, we deliberately wrote “for each pleb” and not “for the entire world's population”, because not everyone wants bitcoin and we shouldn’t force them. If there were more businesses like Pick n Pay, it would be perfectly possible for all plebs to live a bitcoin standard IF we were willing to provide a large array of products and services to each other. We have a wide range of skills from construction workers, to chefs, to daycare providers, truck drivers all the way to software engineers. Over time more and more people will be welcomed into the pleb world, but it will never be everyone. It’s entirely possible that less than 50% of the world's population will EVER use bitcoin (on a regular basis), at least in our lifetime. We’re currently at less than 2% so that shows what an uphill battle this will be.
But again, will it matter what the FIAT price of bitcoin will be 30 years from now? It depends on how you earn. Those of you who already earn bitcoin today, would be interesting to hear your thoughts? Do you still think in fiat? Given the example we provided of Pick n Pay above where today (not 5, 10, 15 years in the future), but right now there is already a store where you can choose from over 1000 products and pay with lightning, in person, no exchanges needed. Or even if you still earn in fiat, if you’ve read up to this point, you probably convert 35-75% of your salary to bitcoin immediately upon getting paid, regardless of the price and spend the remaining 25-65% on food, bills, entertainment etc? What if plebs started creating these kinds of stores all over the world, wouldn’t it be great to not have the burden and hassle of keeping the remaining 25-65% in fiat and trying to “time the market”? What do you think? Or whatever your “routine” is, please let us know in the comments as we use this kind of input for research. . . .

What do you need for this to be a success?

  1. Can only be done by a pleb. Why? a) Trying to orange pill an existing normie small business into doing this is a tall order. It’s hard enough to get them to accept payment in bitcoin. b) For a pleb that already saves in bitcoin, receiving SATs in exchange for their products is like a gift from god, because it saves them from having to “buy” bitcoin.
  2. Your customers probably have to be a special type of pleb. a) Those that go deep into causes like freedom, opposing the surveillance state, bitcoin education, censorship resistance, privacy, self-sovereignty, helping women in bitcoin, reducing poverty etc, and think beyond just number go up. They will be buying from you not just because they like your bread or [put suitable essentials here], but they want to see the concept succeed as they understand the impact it would have if it spread worldwide. b) This is why we suggested Bitcoin Park as a location, but there must be dozens of similar type places in every corner of the earth where plebs gather to discuss changing the world.
  3. The ideal testing ground would be if you lived in a country where fiat currencies are pretty meaningless and have no real practical use at all a) Examples are Argentina, Zimbabwe. But the problem is this is also where governments tend to crack down and just can’t leave people alone. It’s easier to do this in a country where people are free to experiment without some stupid government trying to intervene in your small business. b) Another problem with these countries is that they tend to peg to the dollar which is a massive no no for us. That’s a whole nother political rabbit hole that we’ll save for another post.
  4. It might be possible with an online business that sells tangible products (or services) that plebs need in their daily lives, but the challenge there is to understand what product or service would be most suitable for pricing in SATs with no fiat conversion? And what would other plebs be willing to buy at a fixed SATs price if it were sold as a service? We haven’t gotten that far in our thinking yet or reached that part of the rabbit hole.
  5. Some of you might comment that none of this is possible because the law states that you must accept the local fiat currency as legal tender. Well, this is why your customers have to be plebs and not normies. Few understand.
To summarise; our belief is that as plebs, we need a clean break from fiat. There will never be a changeover date. This is something that is fully within our control. But you can’t start with houses and cars, due to the impact on both buyer and seller so you start with simple items like lunch (food truck) or pastries. We’ve got a lot of viewpoints, but had to start with some assumptions which could be wrong. So we’re always learning from others in this space.
It’s really hard to get the mind away from conversion, it was super hard for us as well. We’ve all grown up and been brainwashed into thinking in fiat, so unfortunately people think that the value of bitcoin can only be measured in fiat. This is a problem, for the following two reasons (and probably more that you can suggest for us):
  • It keeps bitcoin as yet another asset for the government to tax, because they can measure the “market price” at which you spent every single sat against the price it was when you first acquired it. Effectively they’re saying that 20-40% of every bitcoin you own belongs to them, or whatever they set the capital gains rate to in the future (likely to keep going up as governments continue to go broke).
  • We’re subconsciously allowing traders (who trade at the margins) to control how we think an act indirectly via the price. Imagine when Blackrock starts owning more bitcoin than anyone and has THE main product out there for setting the price. It’s not them owning bitcoin that’s a problem, bitcoin is for everyone, it’s the price manipulation aspect of it and everyone being dragged along like sheep.
These are the notions we want to challenge. Bitcoin only should not just refer to shitcoinery, but to fiat as well. We assume it can only be done when products (and services) start being priced ONLY in satoshis with no conversion. The only question that remains is, what are we waiting for?
I have often thought about starting a home services business and pricing everything in Bitcoin. I would have to take fiat as well if customer requested it but all prices quoted in Bitcoin.
Saw one of my neighbours getting their exterior windows cleaned the other day and the window cleaner was using absolute garbage equipment. I am going to talk to him and let him know next time I will do it for 150k sats.
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That's a great idea.
Please do try and start that home services business, even if you do it as a side project.
With all prices quoted in bitcoin, please come back here and let us know how it went, even if its several months from now.
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That was not us, that was @DiracDelta
We just zapped them to show our support
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Yep, it's the top comment on this post I made in June with an admittedly click-baity title asking whether Swan was about to go bankrupt in light of the massive $80m hole in Prime Trust and possible clawbacks that could make their way back to Swan and customers. @nemo #197766
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Don't peg your prices to fiat value. Adjust your product price in sats according to demand and offer (free market). That is how you create the real bitcoin "value". At least you can start from a base price, covering your production costs and from there play with the marhin.
This also could help you https://www.pricedinbitcoin21.com/ - look for your ingredients
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Awesome thanks for the link. It's not loading at the moment, maybe an issue with the site?
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yes could be. few hours ago I was using it fine. Just refresh, maybe is a glitch. It's a famous site
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TL:DR
Sat pricing needs to happen eventually. The problems for the seller are if their costs (rent, flour, electricity) are in fiat there could be times they are operating at a loss, while people are buying up their cheap bread & reselling it again.
Maybe for other products this might not be the case. I'd have to think more about that.
Another option is to round up/down to the nearest "whole" number ex: 4000, 5000. This would stop the sat/$ margin from running away in either direction.
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That's exactly the problem. All of their fixed monthly costs become variable costs when priced in Bitcoin. This is going to be a gradual process and Bitcoin activists will have to lead the way by being willing to take occasional losses.
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It only makes sense to use BTC as unit of accounting for businesses which have costs primarily in BTC. The only business I can think of that works like this are LN routing nodes who's primary operating expense is bitcoin protocol fees. Even miners who can purchase their asics with BTC, have fiat-denominated opex costs (electricity).
Maybe a BTC-only software company who's main opex is payroll and their employees are paid in BTC. But for 99.99999% of businesses, their expenses are fiat-based therefore it would be a poor business decision to not account for the Fiat exchange rate when accepting BTC. Even then, the operators of the business are likely exchanging for fiat to pay rent, buy groceries, etc.
Most of the bitcoiners which pontificate on this subject have never run an actual business before and it shows. Or they operate a bitcoin business and have a skewed perspective of the median consumer's propensity to pay with BTC in the first place.
IMO, BTC becomes a payment rails for fiat denominated settlement first. Then, as fiat truly becomes intolerable for most business, through rapid debasement, capital controls, limits, etc. then people gradually reprice their time and labor in BTC.
The switch to pricing in BTC instead of Fiat will be way easier when most payments are already done with BTC on the backend.
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That’s the long version of what I was trying to say ! Very well put!
We have a long way to go for BTC/SATS to be equal, let alone surpass / replace fiat.
It takes lots of boring , grinding work. It requires deep understanding of people / process / systems .
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I think that's the sort of process we're going to see. Companies that accept Bitcoin payment can do things like set wages in Bitcoin terms more easily. If labor is one of their major expenses, or if some of their other major expenses are also priced in Bitcoin, then they will be better able to really set prices in Bitcoin.
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This is why you can’t choose large businesses like a Pick n Pay, because they’re dealing with way too many variables to try such an experiment
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I mean, literally any business has "too many variables". I think what you're asking for is a business with a single decision-maker that happens to want to take an unnecessary risk by accepting an alternative currency, with no respect to that currency's exchange rate.
Instead of asking business owners to take unnecessary risks, you're better off doing whatever you can to make accepting BTC as risk-free as possible.
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"As quoted above, I think that's the way to go. Bitcoin's value is determined by free market forces, (demand and supply).
Pay with Bitcoin should indeed mean, "pay with Bitcoin, regardless of the fiat price"
"Products (and services) should priced ONLY in satoshis with no conversion".
That's the financial sovereignty, the world needs.
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Thank you, completely agree!
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Has anyone done the (boring but necessary ) front and back office work to make this possible ?
Create a mini economy ? Supply chain , payroll etc etc.
For a soloprenuer this could be possible.
The whole world runs on fiat. How can we make crypto at the very least an equivalent viable choice ? Let’s get out of the ivory tower and into the tactical reality .
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Love the way you think.
Anything is possible, if there's a will, there's a way.
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This sounds like. Fantastic idea. Last few months I been thinking about creating a Magic store and listing services for like 10k sats to see if I would get any customers. Then I talk myself out of it because the skills I have I am almost certain no pleb wants to pay me to do it. Plus what if I do a crappy job. Just lot of self doubt. But from economic standpoint what is stopping a pleb from raising the price if he constantly runs out of supply?
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Please try this.
Start small, minimise your initial expenses. Create an account for this store on x (before spending anything), spread the word and see if there is any interest in the product. Bitcoiners are usually winning to support others that are trying something new.
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Hmm are you my inspiration annon?
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You are trying to ask a good question that few people in bitcoin ask. I think the reason so few people ask it is that they fear looking a bit foolish, which you do right now, but all of progress hinges on the bravery to tolerate looking foolish so do not let that concern you.
Your post makes it clear to me how I need to explain the nature of the situation and I will make sure to tag you when my response is out. The next questions and their answers are far more interesting than the ones you have posed and very few are aware of them (likely because I don't usually care all that much about making my writing easy to parse).
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There you go ...
Few
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In my opinion:
If bread were sold at a fixed price of 5000 sats, some people might consider it a good deal, while others might find it expensive, depending on the current value of Bitcoin and their budget
What u think?
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Thanks for that input. Great point.
2 part answer, (1) good vs bad deal and (2) why some bitcoiners spend their sats
  1. The key is to set the price lower than what it would cost in fiat. Remember that we suggested that over time, keep reducing the price. Essentially the seller is giving the buyer a discount because the seller knows, that in order to get bitcoin "out in the market", they need to go through a bit of hassle. Whereas in this scenario the sats go directly to their cold storage (in 2 simple steps). 5000 sats is less than $1.5 (today), but this was just an example. It could have been 3000 sats or 1000 sats depending on which country the shop is in.
  2. Basically, the world of bitcoin is a lot more than just the "market value". For a lot of bitcoiners that have been stacking for a while (pre-2019), they don't even have an account on an exchange like Swan or Coinbase. Then there are others that would rather mine bitcoin (at a small loss) just to simplify the process of stacking sats, because they know over the long, long, long run, they'll be fine. They exchange sats with each other on places like "Fountain", i.e. indirectly supporting other bitcoiners by listening to their podcasts. They donate to funds like Geyser, etc. So, sats economies are already being created in parallel systems.
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On second part & my opinion too:
Maybe Bitcoiners spend their sats to support Bitcoin's growth, avoid traditional banks, show confidence in its long-term potential, enjoy peer-to-peer transactions, and contribute to Bitcoin-related projects and communities.
Give me an argument if I'm wrong
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You're 100% right.
That's how the network grew to where it is today. In the first few years, people would just give away Bitcoins just to bring more people into the network because they wanted it to work. There was no price, so it was even hard to find people to accept them for free (you needed to jump through technical hoops).
Just imagine the combined thousands of voluntary hours of software design and development that went into building the lightning protocol which is now available to all of us for free. Yes, there are lightning fees, but the wallet providers can use the code base and build on top of it for free. It takes a lot of dedication for the cause by so many people to have brought us where we are today.
We are now part of the community that will take it to the next level.
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That’s one helluva wall of text! I would be in favor of fixed prices in principle. Maybe a price adjustment during each halvening epoch?
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:)
a price adjustment during each halvening epoch?
Interesting suggestion! Reduce by 10 sats a month or wait every 4 years .... Hmmm ... Maybe depends on the product?
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My thoughts from a similar previous post:
Addressing the question on how we'd use Bitcoin as a future unit of account, I think Bitcoin prices will be used after the value of Bitcoin has been stabilized (when the block reward is nearly gone and .the world starts to move to a Bitcoin standard)
If you're a merchant who's willing to made flat sat-denominated prices then go ahead, but the prices will probably need to change just as rapidly as the exchange rate in your country of residence does (unless your country of residence is already Bitcoin-denominated)
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Great thinking!
The question here would be, what if the value of Bitcoin never stabilizes?
What if "the world" never moves to a bitcoin standard? What do we do then?
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okay that was really interesting... still digesting this. :)
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hehe :) yup, it's a mind-twister, and glad you found it interesting
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No because im a low carb maxi (until economy tanks and bread is the only affordable food)
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