Appendix A - Practical Implementation of a Unit of Fixed Denominator (UFD)
This appendix describes a minimal, permissionless implementation of a Unit of Fixed Denominator for price measurement in a retail environment.
A.1 Definition
UFD is defined as a universal unit of account with a fixed and immutable denominator.
The denominator is finite by definition.
For public verification and coordination, the denominator is aligned with a known finite quantity: the total possible number of units corresponding to Bitcoin’s total supply, expressed as satoshis.
One UFD corresponds to one unit of this fixed count.
The unit of account is conceptually independent. The reference is used solely as a publicly observable anchor.
A.2 Price Measurement
All product prices are measured and expressed exclusively in UFD.
The UFD price represents the relative exchange value of the good.
This number is stable with respect to monetary conditions.
Prices are adjusted normally when underlying realities change, such as:
supplier costs in real terms
logistics or distribution conditions
production efficiency or scale
deliberate margin decisions
Monetary drift is explicitly reduced as a reason for repricing.
A.3 Price Display
Prices displayed at the shelf or product level show only the UFD amount.
No settlement currency reference is shown alongside prices.
The displayed price is a measurement, not a payment amount.
Example:
Price: 2,000 UFD
This value is independent of how the transaction will be settled.
A.4 Conversion Context
Currency conversion does not occur at the pricing layer.
Conversion is introduced only at the point of settlement.
Conversion rates are external, momentary and explicitly tied to settlement.
The role of conversion is purely operational: it maps a measured amount to a chosen settlement medium.
A.5 Settlement
Settlement occurs at checkout.
Customers may choose among available settlement media.
Each settlement method converts the same UFD amount into its own units at the moment of payment, based on the current exchange rate between Bitcoin and the chosen settlement medium.
All settlement methods settle the same measured value. No arbitrage exists across settlement options at a given point in time.
A.6 Price Review Policy
To avoid unnecessary churn:
Price reviews are scheduled periodically.
Adjustments are applied in discrete steps.
Reviews are triggered by real changes, not by currency movements.
Suggested cadence:
perishable goods: weekly or biweekly
standard goods: monthly
stable goods: quarterly or longer
A.7 Inventory and Internal Accounting
Inventory is internally valued in UFD.
Cost basis is recorded in UFD at the time of acquisition.
Margins are evaluated in UFD.
Fiat-denominated accounting may be maintained for regulatory compliance, but internal decision-making uses UFD.
A.8 Wages and Internal References
Wages may continue to be paid using existing payment systems.
Compensation can be internally measured in UFD.
Changes in purchasing power become explicit without altering payroll infrastructure.
A.9 Minimal Requirements
To implement UFD, a business requires only:
a defined fixed denominator
a transparent conversion reference at settlement
the ability to display prices in UFD
No integration with payment processors is required. No customer education is required for operation.
A.10 Status
This appendix describes a minimal viable implementation.
More advanced implementations may automate conversion, integrate accounting systems or standardize display conventions. None of these are required for correctness.
Final Note
This implementation does not attempt to influence behavior. It corrects measurement.
Once measurement is corrected, behavior adjusts naturally.