Bitcoin — The Lens of Time
or: Making Time Preference Visible and Measurable
(Klicke hier für die deutsche Version.)
Growing up in East Germany, I was used to empty shelves. As difficult as the scarcity economy was for my parents and everyone else, it had a silver lining for me as a child and teenager. The latest games, stereo systems, or even trips abroad couldn’t tempt me to spend my savings, simply because they didn’t exist. This is how I developed what Bitcoiners call a low time preference: the ability to save for the future.
Today, things are very different. New games, stereo systems, and travel offers appear regularly and in abundance. Many people take inflation as an excuse to spend their money immediately. Living in the moment like this is called a high time preference.
For many who explore Bitcoin, the concept of time preference first comes through Saifedean Ammous and his book The Bitcoin Standard [1]. He argues that human time preference is the invisible engine driving our actions and shaping society. Yet theory often remains abstract. It wasn’t until I discovered the Freedom Calculator on the Blocktrainer forum that I realized just how tangible time preference can be [2]. Bitcoin makes time preference visible and measurable.
Bitcoin is more than just money: it’s a lens showing how much its users live in the present or how much they already think about the future. In this article, I’ll show you how to use this lens to better understand economics.
Bitcoin as a Lens for Time Preference
My little introduction already illustrates that societal conditions influence individual time preference. Good times encourage saving. Hard times force people to draw on their reserves. Economic booms foster low time preference (saving), while crises drive high time preference (spending). As long as people are well off, they can set money aside. When a crisis hits, they rely on their savings.
The same applies to Bitcoin. Buying it demonstrates a low time preference (the future matters), while selling it shows a high one (the present matters). In this way, the market price makes collective time preference visible.
Deviation: Real Price vs. Fair Value
This raises the question of how to interpret Bitcoin’s current market price. Giovanni Santostasi provides an answer. The astrophysicist studies the mathematical laws governing Bitcoin’s development [3]. He derived a power law from Bitcoin data that has allowed him to forecast the network’s growth and Bitcoin’s price for over a decade.
The Bitcoin Power Law models a long-term trend against which the current market value of Bitcoin can be measured. Assuming the Power Law continues to predict price development, the deviation between the real and expected price shows us the market’s position:
Optimism = Real Price > Expectation
People generally look to the future with confidence when the real Bitcoin price is above the Power Law expectation. This optimism can be expressed in days. At the time of writing, the real Bitcoin price is $115,000, while the model expects only $108,000. That means buying Bitcoin now is like paying for 65 days of the future, essentially buying a Bitcoin as if we were already 65 days ahead.
These days aren’t a natural law. They’re a lens through which we view price. Instead of percentages, we speak in terms of time. It’s more intuitive: who can immediately grasp what +6% means, but understanding an overvaluation of 65 future days — “buying the future” — makes sense to everyone.
Pessimism = Real Price < Expectation
The opposite applies when the real price falls below the Power Law trend. Either Bitcoin sellers are pessimistic about the future, or circumstances force them to liquidate some of their Satoshi holdings.
Types of Time Preferences
Most people don’t think in exact timeframes. They act on instinct. Yet intuitively, every investor asks when a Bitcoin purchase will pay off. The waiting period, derived from the deviation between real price and expectation, is the lens focusing on time preference. A decreasing time preference means we collectively lose sight of the present and trust too much in the distant future.
Here are examples to illustrate what I mean. There’s more than just high and low time preference:
High Time Preference
People act in the now when the real Bitcoin price matches its expected value. The time difference is zero in this case.
Expected Price: $108,000 | Real Price: $108,000 | Difference: 0 days
Low Time Preference
When the real price is above the expected, low time preference can be shown as a negative value. Currently, expectation lags reality by 65 days.
Expected Price: $108,000 | Real Price: $115,000 | Difference: -65 days
If someone can wait two months due to a stable economic situation, the current price is still acceptable.
Lowest Time Preference
Extreme negative differences indicate market overreactions.
All-time high (Nov 8, 2021):
Expected Price: $23,337 | Real Price: $67,527 | Difference: -977 days
Compared to the all-time high in 2021, the August 14, 2025 level seems more manageable.
Expected Price: $104,147 | Real Price: $123,339 | Difference: -220 days
Premium Time Preference
Crises trigger panic. The real price falls below expectation. Buying in a bear market gives more Satoshi for the same fiat. With Bitcoin’s scarcity and growing popularity, the likelihood of real prices falling below past expectations decreases.
All-time low (Apr 20, 2024):
Expected Price: $64,397 | Real Price: $15,776 | Difference: 1,170 days
Anyone who could afford to enter at this price effectively saved more than three years of price development and gained three years of future security in a single day.
Sichere Zeitpräferenz
Long-term Bitcoin holders know: Time in the market beats market timing. They invested early enough that the real price is unlikely to drop below their purchase price. Time provides a safety buffer, securing their future.
Oct 2, 2011:
Current Price: $115,000 | Purchase Price: $1 | Difference: 5,179 days
Individual Freedom and Corporate Stability
Market participants use these time differences — consciously or not — to their advantage. Individuals save Bitcoin or Satoshis to extend their personal freedom. Companies hold Bitcoin reserves to strengthen resilience and allow robust planning.
Through Bitcoin’s lens, we can see the time individuals and institutions have to adapt to an ever-changing market. Their resilience grows with the time available for research, development, and trial-and-error. Not every innovation becomes a market success.
Conclusion: Bitcoin Examines the Economy
The height (now, premium, secure) and depth (later, low, lowest) of time preferences magnify the current economic state of market participants like a magnifying glass. Bitcoin aggregates these individual preferences into a collective view, which we call bull or bear markets.
Rising and falling time preferences act as an indicator, highlighting the available time for market adaptation. People and organizations need time to change, and Bitcoin gives them that time.
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Bitcoin Lightning address: eltankred@getalby.com
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Sources
[1] https://www.amazon.de/Bitcoin-Standard-Die-dezentrale-Alternative-Zentralbankensystem/dp/3982109507; excerpt: https://academy.saifedean.com/poe-chapter-13/?v=5f02f0889301 accessed: Sept 10, 2025
[2] https://forum.blocktrainer.de/t/freiheitsrechner/70211 accessed: Sept 10, 2025
[3] https://giovannisantostasi.medium.com/the-bitcoin-power-law-theory-962dfaf99ee9 accessed: Sept 11, 2025
Chart: https://charts.bitbo.io/long-term-power-law/
Price Data: CoinMarketCap.com (accessed Sept 10, 2025)
Bitcoin — The Lens of Time was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.