yes. This was generated using Grok. GFY. It seems mostly rationale. Have been researching VC fundraising and if you go off nominal BTC, you’re fucked. Raise 1BTC and owe 2BTC back. BETTER HOPE FOR A BEAR MARKET TO STACK CHEAP SATS. Legal tender laws probably prevent straight up BTC contracts anyway so the whole thought experiment might be moot for real application today. Not a lawyer. DYOR.
# Revolutionizing Business Valuation in a Bitcoin Standard: Introducing Bitcoin Purchasing Power Indices (BPPIs)
## Executive Summary
In a Bitcoin-dominated economy, where deflationary dynamics boost purchasing power over time, traditional nominal metrics fall short for valuing businesses and structuring equity deals. Enter Bitcoin Purchasing Power Indices (BPPIs)—a decentralized, market-derived framework to measure Bitcoin's real-world strength against diversified baskets of goods, assets, and services. Drawing from Austrian economics, BPPIs flip the script on inflation-biased fiat systems by rewarding productivity and long-term thinking. They enable "real value" adjustments: an investor might accept 0.7 BTC back on a 1 BTC investment if purchasing power has risen proportionally, preserving or growing true wealth. This toolset could standardize valuations, streamline fundraising, and foster efficient capital allocation in a hard-money world. Key benefits: hedges against sector skews, uses oracle data for transparency, and integrates seamlessly into DCF models or smart contracts.
## Overview of Potential BPPIs
BPPIs aren't a single metric but a family of indices, aggregated to provide a robust, anti-fragile gauge of Bitcoin's appreciating value. Unlike fiat CPI (which tracks value erosion), BPPIs quantify gains—e.g., a 20% rise means one BTC commands 20% more real economic utility. Built on principles of diversification, decentralization, and market signals, they'd draw from public data sources (e.g., via Chainlink oracles) for automated, tamper-resistant updates. Base year normalized (e.g., 2026 = 100), updated monthly with rolling averages.
### Core Components (Sub-Indices)
1. **Consumer Goods BPPI**: Tracks everyday essentials like food, energy, and household items. Basket: Global averages from FAO, EIA, etc. Weighting: 40% in headline index. Rationale: Reflects operational costs and consumer stability.
2. **Real Estate BPPI**: Measures median home/commercial prices and land values across key markets (e.g., U.S. from Zillow, global from Numbeo). Weighting: 25%. Rationale: Proxies durable wealth and collateral, avoiding "weird year" skews via 3-year medians and GDP-weighted regions.
3. **Commodities and Inputs BPPI**: Covers raw materials like oil, metals, and tech components (e.g., Bloomberg Commodity Index data). Weighting: 20%. Rationale: Captures production inputs, highlighting deflationary benefits for manufacturing.
4. **Services and Human Capital BPPI**: Includes education, healthcare, transportation, and tech services (e.g., OECD, WHO sources). Weighting: 15%. Rationale: Addresses intangible economy drivers, aligning with human productivity.
### Aggregation and Mechanics
- **Headline BPPI**: Geometric mean of sub-indices for balanced aggregation: BPPI = (Sub1 × Sub2 × Sub3 × Sub4)^(1/4) × 100 (base-adjusted). This mitigates outliers.
- **Data & Implementation**: Open-source Python scripts for calculation; DAO-governed for evolution. Rebalance weights every 5 years based on global shifts.
- **Austrian Edge**: Emphasizes subjective value discovery—competing index providers let markets select winners, avoiding central planning pitfalls.
## Example Investing and Equity Scenarios
To illustrate, assume a base BPPI of 100 at investment (T0). Over 3 years, productivity drives a 42.86% rise to 142.86 (F=1.4286), meaning 1 BTC at exit (T1) buys what ~1.43 BTC did at T0.
### Scenario 1: Seed Investment in a Bitcoin-Native Startup
- **Setup**: Investor commits 1 BTC for 10% equity via a BPPI-linked SAFE. Target: 50% real return.
- **At Exit**: Business sells; without adjustment, nominal return might be 1.5 BTC. But BPPI adjustment: Payout = (1 × 1.5) / 1.4286 ≈ 1.05 BTC nominal.
- **Outcome**: Investor receives ~1.05 BTC, which has the purchasing power of 1.5 BTC at T0. Founder avoids nominal over-dilution; deal uses L2 smart contracts for auto-enforcement.
### Scenario 2: Venture Valuation Using DCF
- **Setup**: Project future cash flows in nominal BTC (e.g., Year 1: 0.2 BTC, Year 2: 0.3 BTC, etc.). Adjust for 10% annual BPPI growth.
- **Calculation**: Discount at risk-adjusted rate (e.g., 15% nominal minus BPPI growth for real rate). Terminal value in BPPI units: If flows equate to 2 BTC real at T0, nominal valuation at T1 ≈ 1.4 BTC.
- **Outcome**: Business raises at a "deflation-discounted" price, attracting patient capital. Investor OK with nominal "shrinkage" (e.g., 1 BTC in, 0.7 out on principal) as real wealth grows.
### Scenario 3: Dividend-Paying Mature Firm
- **Setup**: Annual dividends targeted at 0.1 BTC real per share.
- **At Payout**: If BPPI rose 20% Y-o-Y (F=1.2), nominal dividend = 0.1 / 1.2 ≈ 0.083 BTC.
- **Outcome**: Shareholders receive less nominal BTC but equivalent real value—e.g., buys the same median home fraction. Protects against over-distribution in deflationary booms.
This BPPI system harnesses Bitcoin's strengths, making it a superior foundation for global finance. Thoughts? Let's build it. 🚀