Methodology
The math behind Satoshi's Clock. Expand each section for full details. New to a term? Hover any dotted word for a quick definition, or browse the full glossary.
Each item uses a hybrid inflation formula that blends long-term structural trends with current CPIThe 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. data, dampened by item-specific volatility:
- •Baseline CAGRThe 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. — Long-term structural CPI average for each item category (e.g., 3.2% for coffee, 3.8% for rent)
- •Current Inflation — Trailing 12-month CPI rate from government data (BLS)
- •Dampening (D) — 0.10 for volatile items (gasoline, eggs) to 0.40 for stable items (rent, tuition). Derived from 10-year CPI standard deviation.
Dampening values: 0.10 (gasoline, eggs) · 0.20 (food items) · 0.30 (services, entertainment) · 0.40 (rent, tuition, healthcare)
Related: Oil shocks can't cause broad inflation (on their own) — why the clock models inflation as a monetary phenomenon, not a supply-shock story. Also: The real definition of inflation — what actually drives the price level up, and why technology should make life cheaper. Also: So why do we need a growing money supply? — the policy choice behind the 2% target, and who ends up paying for it.