Modern banking realities
Or, why we price in Bitcoin and convert to Euros with a 12% premium!
As a small business with limited resources and time, we prefer to avoid the hassle and bureaucracy that often comes with traditional banking. By accepting Bitcoin, we can minimize our interactions with banks, which are increasingly burdened by regulations that can hinder simple business transactions.
To reflect the added complexity and stress of dealing with fiat currency payments, our base prices are set in BTC, and we charge a 12% premium for payments made in €, £, or $.
For our best price, we recommend you pay in BTC (Bitcoin).
Put it this way, with our pricing policy, heads you win, tails you win
If the price of eggs is quoted at say €4/dozen, the BTC price will be 10.7% less - at the moment.
As BTC gains in value against the Euro, the less BTC you need to cover €4. Conversely, if BTC loses value against the Euro, just pay for your eggs in €!
In order to help our customers protect themselves against inflation, we can hold the prices of our eggs for 3, 6, 9 or 12 months, depending on the package you choose. By receiving payment for 3, 6, 9 or 12 months' worth of eggs, we too can budget and fix the price of the chicken feed we need to buy.
It's inflation, innit!
We are confident that over time, the price of our eggs denominated in Bitcoin will fall relative to the Euro. Unlike the Euro, which can be printed without limit by central banks, the total supply of Bitcoin is capped at 21 million coins. This means that 1 BTC will always be equal to 1 BTC, and it reflects the true value of the Euro when priced against Bitcoin.
It's maths too.
Assuming central banks continue to print more money, which is the root cause of inflation, you should see the price of your €4 eggs becoming increasingly cheaper when priced in Bitcoin. This is a simple matter of mathematics.
The fixed supply of Bitcoin, combined with the ongoing devaluation of fiat currencies like the Euro due to central bank policies, suggests that the purchasing power of Bitcoin will increase over time. As a result, the price of our eggs in Bitcoin terms should decrease, even if the Euro price remains the same.
This is a fundamental characteristic of a Bitcoin-based economy, where the true value of goods and services is more accurately reflected in the Bitcoin price, rather than being distorted by the inflationary policies of central banks.
It might be maths, but is it a scam?
Our approach is not a scam, but rather a more efficient and streamlined way of doing business. It is what we, along with thousands of small, medium and huge companies, including the world's wealthiest asset managers, believe is a step in the right direction for the future of commerce.
Rest assured, you will receive the eggs and produce you were expecting, along with an invoice for Bitcoin payments. And we will account for our BTC earnings in line with the the legal requirements laid out in our tax system.
What about the elephant in the room: Capital Gains Tax on the sale of Bitcoin? Purchasing eggs in BTC is a taxable event.
I'm no tax adviser, I repeat, this is not financial advice, just an observation on how rich people operate!
Rich people often employ strategies to minimize their tax burden when dealing with Bitcoin.
When they buy a bunch of BTC, they may use some of it to make purchases right away. In such cases, since there is no profit or loss, there is no tax event to account for.
The remaining Bitcoin they purchased is often kept as long-term savings, as Bitcoin is primarily viewed as a savings tool. If they don't spend the Bitcoin, there is no taxable event.
Additionally, rich people tend to use their assets as collateral for loans, which they can keep rolling over as the asset appreciates in value. This allows them to access the value of their assets without triggering a taxable event. For the time being, BTC-backed loans are quite complicated but the financial world is on to Bitcoin now and I'm sure the options will improve as time goes by.
Run this past your financial adviser. If they act dumb or say that BTC is a scam, refer them to this article which includes a BlackRock statement. Wish them luck as you fire their arse out of your financial affairs!
This is a heartening summary of what lies ahead on a deflationary Bitcoin Standard.
