Methodology
How SALI works, why Bitcoin is the benchmark, and what the numbers mean
What is SALI?
SALI — the Satoshi Annual Labor Index — is the standard for measuring your labor in Bitcoin terms. It converts your annual income into satoshis (sats), the smallest unit of Bitcoin: one sat equals one hundred-millionth of a coin, or 0.00000001 BTC. By expressing your salary in sats, SALI gives you a consistent unit of account that doesn't inflate, expand, or get debased.
SALI answers one specific question: how does my salary denominated in Bitcoin change year over year? It does not measure purchasing power in goods and services, and it does not replace CPI-adjusted real wages. Those are different questions. SALI is a Bitcoin-denominated income index — the right tool if understanding your labor's value relative to a fixed-supply asset is what you're after.
The Formula
The calculation is straightforward:
- Take your annual salary in your local currency
- Convert it to USD (if not already in USD)
- Divide by the current Bitcoin price in USD
- Multiply by 100,000,000 to express in satoshis
The result tells you how many satoshis your annual labor could theoretically acquire at the given Bitcoin price.
Bitcoin Price Selection
SALI offers three methods for selecting the Bitcoin price used in calculations:
Spot Price
The current market price fetched from Coinbase's public API. This reflects real-time market conditions but can be volatile. Use this for a snapshot of your current SALI.
Annual Average
Historical annual average prices smooth out daily volatility. The calculator uses the most recent year's average as the baseline. This method is useful for year-over-year comparisons that aren't distorted by short-term price swings.
Manual Entry
Enter any Bitcoin price manually. This is useful for:
- Historical calculations using specific past prices
- Scenario analysis ("What if BTC were at $X?")
- Using prices from other sources or exchanges
- Offline usage when API calls fail
Projections
The projection feature extends your SALI calculation over multiple years using simple compounding assumptions anchored to the current year:
BTC Price (Year N) = Current BTC Price × (1 + BTC Growth Rate)^(N − Current Year)
The salary you enter is treated as your salary today. Past years are back-calculated (deflated) from that value, and future years grow forward. Historical years use actual annual average BTC price data; the current year and future years use your selected BTC price method (spot, annual average, or manual) as the baseline.
These are not predictions. They're mechanical extrapolations that show how your SALI would evolve if the growth rates you specify were to hold constant. Real-world salary increases and Bitcoin prices are far more variable.
The Projected Change output shows the percent difference between your SALI today and your projected SALI at the end of the forecast window — measuring whether your labor's BTC purchasing power is expected to grow or shrink given your assumptions.
What SALI Is Not
SALI is precise about its scope. Knowing what it doesn't do is as important as knowing what it does.
- Not a price prediction. SALI does not forecast Bitcoin's future price. The projection feature applies your growth rate inputs mechanically — it has no predictive power and does not imply any view on where Bitcoin will trade.
- Not an inflation model. SALI doesn't measure purchasing power in goods and services. Rent, food, and healthcare are priced in fiat — SALI doesn't track those. For inflation-adjusted real wages, use CPI data. SALI and CPI answer different questions.
- Not financial advice. SALI is an index. It doesn't tell you to buy Bitcoin, hold Bitcoin, or make any financial decision. Use it to measure; use your own judgment to act.
- Not a complete financial picture. Your financial health depends on many factors beyond your SALI. It is one lens, not a verdict.
Limitations
Bitcoin Is the Benchmark by Design
SALI uses Bitcoin because it is the only fixed-supply monetary asset with a hard cap of 21 million coins and a fully transparent, auditable issuance schedule. That makes it the most demanding benchmark for labor: no central bank can inflate it, no government can debase it, and no committee can change its rules. The choice is deliberate. SALI includes S&P 500, Gold, and CPI comparisons to show Bitcoin's divergence in context — not because those are equally valid units of account.
The Historical Window Was Extraordinary
The available historical data (2015–2025) covers a roughly 370× appreciation in Bitcoin's price ($272 to $101,642) — one of the most exceptional runs in modern financial history. Projections built on that window as a baseline may overstate what comes next. Use conservative BTC growth assumptions, run multiple scenarios, and treat the historical chart as context, not as a performance guarantee.
SALI Doesn't Measure Cost of Living
A rising SALI doesn't mean your standard of living improved. A falling SALI doesn't mean it deteriorated. Rent, food, and healthcare are priced in fiat. SALI measures one thing: your salary's value in Bitcoin terms. That is its scope, and it is intentionally narrow.
Bitcoin Volatility
Bitcoin's price can move 10–20% in a single day. Your SALI will reflect that. A high SALI during a price dip doesn't mean your labor is suddenly more valuable — it means Bitcoin is temporarily cheaper. Annual average prices smooth short-term volatility for historical analysis; spot price captures the present moment.
Projection Assumptions Are Yours, Not Ours
Projection accuracy depends entirely on the growth rates you input. If you assume 20% annual BTC appreciation and Bitcoin grows 5%, your projections will be materially wrong. Run multiple scenarios with different assumptions. Treat the output as sensitivity analysis — a tool for thinking, not a forecast.
Currency Conversion
Non-USD salaries are converted using live exchange rates fetched from the European Central Bank (via Frankfurter API) on page load. If the fetch fails, fallback rates are used. For maximum accuracy, convert your salary to USD manually and select the USD option.