Gone are the days when value calculations were tied to the physical-backed currencies, and welcome to the era of Bitcoin, the digital-asset that redefines the concept of financial value. In a theoretically poised world without fiat currency, we might resort to assessing Bitcoin’s price using other products, commodities, or assets.
For instance, gold and silver share a characteristic with Bitcoin; they have a finite supply. Hence, Bitcoin’s worth could subsequently be gauged by looking at its exchange ratio with them.
Base resources like oil, real estate or even indexes like S&P 500 could be another reference point. The core philosophy is to find something with an intrinsic value that wouldn’t depreciate over time, then measure Bitcoin against it.
Itâs essential to remember, though, this is not without flaws. These assets also have their own market dynamics. So while it provides a potential outlook, nothing is set in stone.
Many factors would need to be reconsidered or redefined. Still, the mental extrapolation provides a framework to begin understanding the magnitude of such a hypothetical scenario. Read More
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