I met with family to answer questions about Bitcoin and helped them understand inflationary dollars vs deflationary bitcoin.
Once we established the basics of inflation, Bitcoin, etc, I showed them this tweet and chart from Jack Mallers: (I pulled out the text and 1 chart onto a slide) https://x.com/jackmallers/status/1742313137926263249 https://m.stacker.news/11835
While this is a place to start the conversation, everyone involved was a bit puzzled by "Things got cheaper in bitcoin".
Luckily, I had some real world examples ready for them.
I pulled up these tables on my next slide:
$35000 Car
| Year | BTC EOY | Cost of Car |
| 2018 | $3,000 | 11.6 |
| 2019 | $7,000 | 5.0 |
| 2020 | $27,000 | 1.29 |
| 2021 | $47,000 | 0.74 |
| 2022 | $16,000 | 2.25 |
| 2023 | $44,000 | 0.81 |
| 2024 | $100,000 (est) | 0.36 |
| 2028 | $250,000 (est) | 0.14 |
$300,000 House
| Year | BTC EOY | Cost of House |
| 2018 | $3,000 | 100 |
| 2019 | $7,000 | 42.8 |
| 2020 | $27,000 | 11.1 |
| 2021 | $47,000 | 6.3 |
| 2022 | $16,000 | 18.8 |
| 2023 | $44,000 | 6.8 |
| 2024 | $100,000 (est) | 3 |
| 2028 | $250,000 (est) | 1.3 |
After letting them them look at the data and process for a moment, then I started to explain:
- If you bought a 35,000
- If you bought a 35,000 (but due to inflation, you'd have to work more than you did in 2018)
- If you bought $35,000 of bitcoin in 2018, you would have had 11.6 bitcoin
- If you then used some of that bitcoin in 2023 to buy a $35,000 car, you would have a car and still have 10.79 bitcoin.
Of course, we never know what the future holds, but if you believe that bitcoin will continue to appreciate in value over time, this can be a useful exercise to help people understand where bitcoin has been and where it could be heading.
https://imgprxy.stacker.news/BXx3n7YWV1clHpC5FhVtcspurg8uNXGG01jnQkB-lTc/rs:fit:1280:720/aHR0cHM6Ly9tLnN0YWNrZXIubmV3cy82NDEz
I just had a similar post yesterday (that didn't get any traction) but I was thinking about it differently.
In terms of saving money/store of value - I am with you 100%. In terms of buying a house (as you have laid out in the table), I think of it the opposite way.
If I bought a home in 2018 with 100 bitcoin, the house would be worth maybe 400-500k in 2023. The bitcoin I used to buy it would be worth 4.4M.OfcoursethedifferencebecomeslessdramaticifIweretobuyahomewithbitcoinin2023(assumingcostofahousein2023is10bitcoinagainitwouldstillbeabiglossby2028withbtcat250k), but I would still not make that deal.
The tables I made are definitely over simplified - can't get the same house for $300k today that you'd get 5 years ago, etc. Plus then you're paying rent or whatever in the meantime.
Totally, but the principle applies. If the thing you buy something with gains value faster than the thing you bought then you are effectively losing money.
I would not make a big purchase with bitcoin today. In your example about buying bitcoin in 2018 and then buying a car in 2023, that 0.81 bitcoin used in 2023 to buy a car would be worth ~200k in 2028. Obviously one is far better off holding bitcoin than holding dollars, but it would poor financial decision to buy a car with bitcoin right now.
As a very real example, I bought SOL at 20.Isold25ofthematlike35 to buy concert tickets. Of course I still made money with my SOL and so I effectively paid 500for800 tickets, but the opportunity cost of buying those tickets was a couple thousand dollars.
That is the math. Your argument is the 500for800 tickets. That is undoubtedly a great deal. My argument is the if i had the 25 SOL they would be worth $2500 now. Not such a great deal.