Thread by @sukru09347068

Fiat vs Bitcoin vs Bikes Thread:

0/ In this thread I will the compare soundness of bikes, Turkish Lira and Bitcoin. Show how compounding inflation devalues fiat currencies. Got triggered from a question on Tv, too deep in the rabbit hole.

1/ The image below is from a Turkish tv Show. The question was: How many years it would take for someone to buy a 7800 Turkish Lira(TRY) worth of a bike if he is saving 50 TRY a week?

2/ Answers were 1,2,3 and 4 years. When simply thinking the answer is easy and 3 years. 7800/50/52= 3 years. In practice it is a complicated question and none of the answers given were true. No fiat savings of a constant amount would result in 3 years due to inflation.

3/ I will continue by calculating how long it would actually take for someone using TRY to save to own that bike. Assuming that the person starts saving for the bike on the January 1st of 2014, the bikes value will be updated for each year using the official inflation data.

4/ According to the Statistics Bureau of Turkey, inflation between years 20014-2018 were:
2014: 8.17 %
2015: 8.81%
2016: 8.53 %
2017: 11.92 %
2018: 20.30 %

5/ Side note: According to @steve_hanke 2018 inflation in Turkey was around 80%. I, agree as nearly everything doubled in price compared to the year before. (Except housing cause it was already in a bubble)

6/ Bike was 7800 TRY on January 1st 2014.

2015 – 7800* 1.0817 = 8437.26 Try with inflation
.
.
2018 = 12,328.9 TRY

12,328.9/50/52 = 4,741 years.
By saving 50 TRY a week he would afford the bike around September 2018.

7/ Now I will use a different methodology and see how many bikes the same person would have bought in 4.741 years when dollar cost averaged bitcoin.
I used dcabtc.com for calculating number of satoshis accumulated.

8) Since dcabtc.com uses only $’s, I have converted everything into dollar.

January 1st of 2014 – 7800 TRY was $3546
February 1st 2018 – 12328.9 TRY was $1926
Dollar/TRY yearly averages and amount of $ you could get for 50 TRY is shown in the chart below.

9/ Using dollar cost averaging method, I calculated how many satoshis you would accumulate in 4.5 years. It was 874,213,700 satoshis. This is 8.742 Bitcoin.

Note: Each year was calculated seperately with the amount of $'s you could get for 50 TRY.

10/ 1st of September Bitcoin was: $7270. 8.742 Bitcoin would be worth, $63,554.34. You would be able to afford 63,554.53/1926= 32 bikes and have 26.5 million satoshis as change. If hodled 26.5 mil satoshis, you would be able to afford 1 more bike today and have 10 mil spare sats.

11/ 10/ Savings in 50 TRY a week gets you 7800 TRY worth bike in 4.74 years. Saving the same amount in Bitcoin lets you have a 32 bike fleet with some change in 4.74 years.

12/ Soundness: TRY < Bike < Bitcoin . Short fiat long bitcoin. You can also short bikes, or the worst case get them of @trylolli ;) #stackingsats

Shameless tagging for exposure.
@saifedean @pierre_rochard @stephanlivera @giacomozucco @HillebrandMax