The bitcoin purchasing power index launched by BitBond shows how many BigMacs one bitcoin can buy in different countries

The value of bitcoin is generally measured in U.S. dollars or other fiat currencies. However, the rates of fiat currencies also fluctuate. Creators of bitcoinppi (bitcoin purchasing power index) believe that the everyday value of bitcoin must be measured in something stable and constant – for instance, a Big Mac. This, according to the authors of the project, will “make bitcoin’s value digestible”. Besides, a Big Mac is an embodiment of stability because the amount of calories people need every day does not change much.

The index is calculated on the base of bitcoin exchange rates available in different countries and the Big Mac Index as published by The Economist. The global purchasing power of one bitcoin may differ a lot: the number of burgers that can be bought with 1 BTC is equal to 70.11 in the U.S., 125.68 in China and 211.11 in the Russian Federation. A global average at press time is 100.05 Big Macs for 1 bitcoin.

Creators of the project believe that it can find lots of uses. According to them, it can be “used as a fair value measure in bitcoin lending” and allows to quote prices in an online shop in Big Macs instead of USD or other fiat currencies.

A pizza might have been more relevant as a unit of bitcoin price measurement, as two pizzas were the first thing bought for bitcoins but evidently, it is less suitable for the index than a Big Mac because of a much greater global variety of pizza prices, sizes, ingredients and nutrition values. Thus some local recipes include such things as crocodile meat or cicadas, which, if marketed worldwide, would seriously affect their retail price.

Alexey Tereshchenko