Bitcoin and Inflation Glossary
This Bitcoin and inflation glossary defines the terms behind Satoshi's Clock in plain English — from satoshi and halving to CPI, purchasing power, and the model behind the clock. No economics or Bitcoin background assumed.
B
- Basket
- The curated set of everyday household items — coffee, eggs, rent, gasoline and more — whose prices Satoshi's Clock tracks. Each item carries its own inflation rate, and the clock projects when each one's price in satoshis will equal its price in dollars.Related: Browse the full basket · Coffee
- Bitcoin (BTC)
- A decentralized digital currency introduced in 2009 by the pseudonymous Satoshi Nakamoto. Its supply is capped at 21 million coins, and each bitcoin is divisible into 100 million satoshis.Related: Why Bitcoin Was Created · The Bitcoin Whitepaper, Explained
C
- CAGR (Compound Annual Growth Rate)
- The single yearly rate that, compounded over a period, takes a starting value to an ending value. It smooths uneven year-to-year changes into one representative annual figure.Related: How the clock models growth
- Convergence year
- The year the clock projects an item's price in satoshis will fall to equal its price in today's dollars — the moment a $5 coffee costs just 5 satoshis. The headline clock shows the weighted-median convergence year across the whole basket.Related: See the live clock · Methodology
- CPI (Consumer Price Index)
- The U.S. government's primary measure of inflation, published monthly by the Bureau of Labor Statistics. It tracks the average change over time in the prices households pay for a representative basket of goods and services.Related: The Real Definition of Inflation · BLS Consumer Price Index
D
- Dampening coefficient
- A per-item factor in the clock's inflation model that blends an item's recent inflation rate with a long-run baseline. Volatile items like gasoline and eggs get a low coefficient; stable items like rent get a higher one.Related: Methodology
- Deflation
- A sustained fall in the general price level — the opposite of inflation. In everyday terms, money buys more over time rather than less.Related: Is Deflation Actually Bad? · The World Is Getting Cheaper
F
- Fiat currency
- Government-issued money that is not backed by a physical commodity like gold. Its value comes from public trust and legal status. The U.S. dollar, the euro, and the yen are all fiat currencies.Related: Where Does New Money Come From?
H
- Halving
- A scheduled event, occurring roughly every four years (every 210,000 blocks), in which the rate at which new bitcoin is created is cut in half. It is the mechanism that enforces Bitcoin's gradually slowing, ultimately fixed supply.Related: Where Does New Bitcoin Come From?
- Hard cap (21 million)
- The fixed maximum supply of Bitcoin: 21 million coins. No more can ever be created — a limit enforced by the network's rules rather than by any central authority.Related: Where Does New Bitcoin Come From?
I
- Inflation
- A sustained rise in the general price level, which erodes the purchasing power of money over time. The same dollar buys a little less each year.Related: The Real Definition of Inflation · How Inflation Erodes Purchasing Power
L
- Lightning Network
- A payment layer built on top of Bitcoin for fast, low-cost transactions. Most everyday Bitcoin spending happens here, and amounts are typically denominated in satoshis.Related: Sats vs Bitcoin
- Logistic decay (logistic growth)
- The S-shaped curve the clock uses to model Bitcoin's growth: high early growth that gradually slows toward a long-run terminal rate, rather than growing at a constant pace forever.Related: Methodology
M
- M2 (money supply)
- A broad measure of the U.S. money supply, including cash, checking and savings deposits, and money-market funds. The clock pegs Bitcoin's long-run terminal growth rate near the historical pace of M2 expansion.Related: Where Does New Money Come From? · FRED M2 money stock
- Medium of exchange
- One of the core functions of money: something widely accepted as payment for goods and services, removing the need for barter.Related: The Four Functions of Money
N
- Nominal vs. real
- Nominal values are measured in current dollars; real values are adjusted for inflation to reflect actual purchasing power. A raise that doesn't keep up with inflation can be positive in nominal terms but negative in real terms.Related: How Inflation Erodes Purchasing Power
P
- Parity
- The central idea behind Satoshi's Clock: the point at which an item's price in satoshis equals its price in dollars — when a $5 coffee costs exactly 5 satoshis.Related: See the live clock · Methodology
- Purchasing power
- How much a unit of money can actually buy. Inflation reduces purchasing power over time: the same $100 buys fewer groceries each year.Related: How Inflation Erodes Purchasing Power
Q
- Quantitative easing (QE)
- A monetary policy in which a central bank creates new money to buy financial assets, expanding the money supply to stimulate the economy.Related: Does the Fed Print Money? · Where Does New Money Come From?
S
- Satoshi (sat)
- The smallest unit of bitcoin. One bitcoin equals 100 million satoshis — often shortened to 'sats' — just as one dollar equals 100 cents. Named after Bitcoin's pseudonymous creator.Related: Sats vs Bitcoin
- Scenario (Bear / Base / Bull)
- One of ten growth assumptions the clock offers, grouped into Bear, Base, and Bull. Each sets different parameters for how fast Bitcoin grows, producing earlier or later convergence years.Related: See the live clock · Methodology
- Store of value
- One of the core functions of money: the ability to hold value reliably over time, so it can be saved and spent later without significant loss.Related: The Four Functions of Money · Is Bitcoin Too Volatile?
U
- Unit of account
- One of the core functions of money: a common measure for pricing goods and services, so values can be compared on a single scale.Related: The Four Functions of Money · Sats vs Bitcoin
These terms come to life on Satoshi's Clock, which tracks everyday items like coffee and rent in satoshis. Browse the full basket or read the Learn articles for the longer story behind each idea.