Bitcoin And Exchange Rates
John has a store. He wants to increase his internet sales traffic. His store is in the US. One of the things cutting into John's profit margin is credit card fees. He normally pays 4% of any transaction to credit card processors. If John uses Bitcoin, he only pays 1%. But, Bitcoin's price changes daily. Immediately upon a transaction happening, John has to convert Bitcoin to US Dollars.
John is selling Glittery Widgets. The sales price for one widget is $20 USD. John can manufacture a Glittery Widget for $10. No matter where he ships in the world, FedEx will deliver it for $4 USD.
Anil told his friend Hamish about Glittery Widgets. Hamish wants to buy a Glittery Widget, and he has to buy one for Anil. Hamish lives in the UK. Anil is from India, but is studying this term in Switzerland.
USD=US Dollar
GBP=British Pound
CHF=Swiss Franc
BTC=Bitcoin
Where, 1 USD=0.001690 BTC;
1 GBP=102.763 RPC;
1 GBP=1.68498 USD;
1 GBP=1.52754 CHF.
How many Rupees does Anil have to give to Hamish to buy 1 Glittery Widget?
The answer is 1219.75.
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1 solution
The point to be noted is that while Hamish being in UK is the one who buys the widget, he would be the one who pays for it but as per the $20 equivalent of GBP(please check the acronym list). This in the present case comes out to 20/1.68498= (staggeringly long decimal) which happens to be the price that's paid by Hamish but the GBP equivalent. Now since Anil is the one who is buying the widget from Hamish he is the one who pays him that equivalent amount in terms of INR(Indian Rupee which has been denoted as RPC here----RPC remote procedure call????) The price thus paid by Anil is (20/1.68498) * 102.763 = 1219.75