Theory of Burgernomics

Ideation

The idea of the this theory began as a simple post on noise.cash on the basics of the theory in regard to the purchasing power deriving from deflationary asset or currency, like CryptoCurrency.

The post is as follows:

“If only I had 1 BCH then I could eat burgers for life, because as the price of BCH goes up I would have to spend less BCH per burger over time.”

Introduction

The idea behind the theory is that unlike the currencies issued by the central banks of sovereign nations, which are inflationary in nature therefore the price of goods and services increase as the value of that currency decreases over time, something like a CryptoCurrency could have deflationary properties that overtime will be able to increase its purchasing power.

The problem with the inflationary system is that as the supply of the circulating currency is increased the resources that finite remains the same, therefore the price of goods and services doesn’t increase per se but the value of the currency going down with respect to the finite supply of resources that are available.

Therefore, a deflationary system a Crypto currency can be a solution.

Here's a meme to illustrate this in simple terms:

Why a Burger?

A burger is probably one of the most recognized food items and widely available in most countries, that is why we have a Big Mac Index published b the renowned The Economist magazine.

If you don't know what a Big Mac Index is an informal way of measuring the purchasing power to measure how much the same goods costs in different countries (simplified explanation of course)

Why BitcoinCash (BCH)?

While it is easy to just use Bitcoin (BTC) but I have opted for BitcoinCash (BCH) insteas because of it fast transfers and no fess, making it more ideally sited for the use as a digital currency.

Limited supply of BCH against unlimited supply of fiat USD

At the time of writing of this article the Circulating Supply of BCH is at 89% with 18,764,012.50 BCH in circulation.

While the fiat currency of USD has no supply limit and the Federal Reserve.

Purchasing Power of 1 BCH

So we are starting with 1 BCH as a starting point

Following table illustrates the price of BCH over a random interval of time (taken from https://coinmarketcap.com/currencies/bitcoin-cash/historical-data/

As illustrated in the table above we started off with 1 BCH in wallet and ate 14 Big Mac over a rough period of 1 year and initially paid 0.0169398 BCH and while price went up and down we paid 0.00649996 BCH at the time of writing this article.

Assumptions

While the above illustration takes into account the price of a Big Mac at $3.99, in the longer term we can expect the price to go up. However, as the price of the Big Mac raises so does the price of the BCH to contrast the Big Mac price.

In case, the price of the Big Mac raises beyond the raise in the price of BCH. Then there can be one of two scenarios:

• The currency has become so unstable that a price of a simple food stuff is raising at an unprecedented rate.

• The Big Mac supply is becoming scares

Limitations

While BCH is used in this example, any good cryptocurrency can be used in this example which fit the parameters that BCH stands on. Same as Burger can be replaced with, lets say Dosa.

However, as with fait currency, Crypto also only has value as long as people believe in it and give it value.

But Cryptocurrencies like BCH set to solve the limitation of the current fiat system.

While earlier Gold was used as the basis for deriving value of the currency, that was why it was called 'Money' back then.

In all conclusion a peer-2-peer digital cryptocurrency is an ideal solution as long as it is decentralized and not control by a singular large group or entity.

Conclusion

While the "for life" part is debatable still it can safely illustrate the name of the Crypto's deflationary nature and as the things stands a good hedge against the raising prices.

Because of the limited supply and the usability of the BCH it is easily a great preserver of Purchasing Power.