or: Making Time Preference Visible and Measurable<\/strong><\/p>\n (Klicke hier f\u00fcr die deutsche Version.<\/a>)<\/p>\n 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\u2019t tempt me to spend my savings, simply because they didn\u2019t exist. This is how I developed what Bitcoiners call a low time preference: the ability to save for the\u00a0future.<\/p>\n 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.<\/p>\n 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\u2019t 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.<\/p>\n Bitcoin is more than just money: it\u2019s a lens showing how much its users live in the present or how much they already think about the future. In this article, I\u2019ll show you how to use this lens to better understand economics.<\/p>\n 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\u00a0savings.<\/p>\n 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.<\/p>\n This raises the question of how to interpret Bitcoin\u2019s current market price. Giovanni Santostasi provides an answer. The astrophysicist studies the mathematical laws governing Bitcoin\u2019s development [3]. He derived a power law from Bitcoin data that has allowed him to forecast the network\u2019s growth and Bitcoin\u2019s price for over a\u00a0decade.<\/p>\n 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\u2019s position:<\/p>\n Optimism = Real Price > Expectation<\/strong><\/p>\n 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\u00a0ahead.<\/p>\n These days aren\u2019t a natural law. They\u2019re a lens through which we view price. Instead of percentages, we speak in terms of time. It\u2019s more intuitive: who can immediately grasp what +6% means, but understanding an overvaluation of 65 future days\u200a\u2014\u200a\u201cbuying the future\u201d\u200a\u2014\u200amakes sense to everyone.<\/p>\n Pessimism = Real Price < Expectation<\/strong><\/p>\n 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.<\/p>\n Most people don\u2019t 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\u00a0future.<\/p>\n Here are examples to illustrate what I mean. There\u2019s more than just high and low time preference:<\/p>\n High Time Preference<\/strong><\/p>\n People act in the now when the real Bitcoin price matches its expected value. The time difference is zero in this\u00a0case.<\/p>\n Expected Price: $108,000 | Real Price: $108,000 | Difference: 0\u00a0days<\/p>\n Low Time Preference<\/strong><\/p>\n When the real price is above the expected, low time preference can be shown as a negative value. Currently, expectation lags reality by 65\u00a0days.<\/p>\n Expected Price: $108,000 | Real Price: $115,000 | Difference: -65\u00a0days<\/p>\n If someone can wait two months due to a stable economic situation, the current price is still acceptable.<\/p>\n Lowest Time Preference<\/strong><\/p>\n Extreme negative differences indicate market overreactions.<\/p>\n All-time high (Nov 8,\u00a02021):<\/p>\n Expected Price: $23,337 | Real Price: $67,527 | Difference: -977\u00a0days<\/p>\n Compared to the all-time high in 2021, the August 14, 2025 level seems more manageable.<\/p>\n Expected Price: $104,147 | Real Price: $123,339 | Difference: -220\u00a0days<\/p>\n Premium Time Preference<\/strong><\/p>\n Crises trigger panic. The real price falls below expectation. Buying in a bear market gives more Satoshi for the same fiat. With Bitcoin\u2019s scarcity and growing popularity, the likelihood of real prices falling below past expectations decreases.<\/p>\n All-time low (Apr 20,\u00a02024):<\/p>\n Expected Price: $64,397 | Real Price: $15,776 | Difference: 1,170\u00a0days<\/p>\n 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\u00a0day.<\/p>\n Sichere Zeitpr\u00e4ferenz<\/strong><\/p>\n 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\u00a0future.<\/p>\n Oct 2,\u00a02011:<\/p>\n Current Price: $115,000 | Purchase Price: $1 | Difference: 5,179\u00a0days<\/p>\n Market participants use these time differences\u200a\u2014\u200aconsciously or not\u200a\u2014\u200ato their advantage. Individuals save Bitcoin or Satoshis to extend their personal freedom. Companies hold Bitcoin reserves to strengthen resilience and allow robust planning.<\/p>\n Through Bitcoin\u2019s 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\u00a0success.<\/p>\n 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\u00a0markets.<\/p>\n 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\u00a0time.<\/p>\n ***<\/p>\n Did my 12,331 characters give you a new insight? Honor them with a donation via Lightning. You want to read more from me? Support my work with a few Satoshis. Understanding takes time. Your promotion gives me time to organize my thoughts and write them\u00a0down.<\/p>\n Bitcoin Lightning address: eltankred@getalby.com<\/a><\/p>\n ***<\/p>\n [1] https:\/\/www.amazon.de\/Bitcoin-Standard-Die-dezentrale-Alternative-Zentralbankensystem\/dp\/3982109507<\/a>; excerpt: https:\/\/academy.saifedean.com\/poe-chapter-13\/?v=5f02f0889301<\/a> accessed: Sept 10,\u00a02025<\/p>\n [2] https:\/\/forum.blocktrainer.de\/t\/freiheitsrechner\/70211<\/a> accessed: Sept 10,\u00a02025<\/p>\n [3] https:\/\/giovannisantostasi.medium.com\/the-bitcoin-power-law-theory-962dfaf99ee9<\/a> accessed: Sept 11,\u00a02025<\/p>\n Chart: https:\/\/charts.bitbo.io\/long-term-power-law\/<\/a><\/p>\n Price Data: CoinMarketCap.com (accessed Sept 10,\u00a02025)<\/p>\n Bitcoin\u200a\u2014\u200aThe Lens of Time<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" Bitcoin\u200a\u2014\u200aThe Lens of\u00a0Time or: Making Time Preference Visible and Measurable (Klicke hier f\u00fcr 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, […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-100546","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/100546"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=100546"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/100546\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=100546"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=100546"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=100546"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Bitcoin as a Lens for Time Preference<\/h3>\n
Deviation: Real Price vs. Fair\u00a0Value<\/h3>\n
Types of Time Preferences<\/h3>\n
Individual Freedom and Corporate Stability<\/h3>\n
Conclusion: Bitcoin Examines the\u00a0Economy<\/h3>\n
Sources<\/h3>\n