BitBond, a startup facilitating p2p loans with bitcoin, says that it has launched an index that tracks the purchasing power of bitcoin.
Called the Bitcoin Purchasing Power Index (Bitcoin PPI), it is intended to mirror the ‘Big Mac’ index improvised by The Economist in 1986, which tracks the purchasing power of a currency based on the number of Big Macs it can buy. The Big Mac is McDonald’s best known meal choice and is considered a common commodity reflecting one of the typical costs of living. Similarly, the Bitcoin PPI tracks the number of Big Macs that can be purchased with one bitcoin.
The overall goal is to illustrate the cost of a common good in a manner that is “agnostic to the monetary policies of governments.” BitBond CEO Radoslav Albrecht told Finance Magnates that the Bitcoin PPI is based directly on the values from The Economist index and the bitcoin/fiat exchange rate.
He added that while the Bitcoin PPI does not currently tie into the startup’s lending business, it can be leveraged as an economic metric when making bitcoin-based loans in the future.
The hope is to add value to the Bitcoin ecosystem. “By launching this site, we aim to bring a lighthearted yet highly usable index signifying the products that one bitcoin buys you,” Albrecht said in a statement.
In general, bitcoin has thus far struggled to gain mass adoption for use as a currency. Bitcoiners often present prices of merchandise in bits (millionths of a bitcoin) in an effort to start thinking in terms of bitcoin, not dollars.
BitBond has secured a total of €800,000 ($952,000) in two funding rounds over the past year.