← The Bitcoin Standard Podcast
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Foreign. Principles of Economics. My complete guide to Understanding Economics is now available in hardcover, audiobook and ebook from seifeddin.com, amazon and many more booksellers worldwide. And now I am also teaching a course based on this book on my website seyfeddin.com Principles of Economics will run the whole academic year from September to June and will have a new lecture every two weeks as well as weekly live online discussion seminars open to learners from all over the world and from all walks of life. Whether you're a student, a professional, or a retiree, you are making economic decisions every day and this course will arm you with the wisdom of centuries of economists to improve your economic decision making. You'll also get a free book of Principles of Economics. If you sign up for the course, go to safedin.com and sign up now. Thank you very much to Professor Hopper for the invitation and thank you very much for attending. It is an honor to be here today. I want to discuss the link between time preference and money, and in particular hard money, and in particular looking at the example of what Bitcoin can teach us about this link so to begin with, the scarcity of time forces man to choose between alternatives at all points in his life, and it means that every decision has an opportunity cost. Even with no restraint on the amount of resources available. An individual's choice of how to spend their time results in the elimination of all other choices for which he could have used that time. Economizing time is unique because time passes and cannot be stopped or reversed. When he is born, man's life clock begins ticking. It continues ticking relentlessly and only stops when he dies. There is no knowing when that clock will stop, and there is no restarting it after it stops. Man gets one uninterrupted shot at life and he never knows when it will end. So this means that time is not a normal market commodity like all the others. You can't just choose the quantity that you would like to have of time. There is no market choice between different quantities of time or different periods of time, as Mises put it, appear in different perspective according to whether they are nearer or or more remote from the instant of valuation of the individual. The nearer the period of time from the present, the more valuable it will appear to an individual. The present is certain as it is already here, but the future is uncertain as it may never come. The future can only come through successfully securing survival in the present, which makes the needs of the present always more pressing and important than the needs of of the Future. The present is where all senses and experiences are felt. It's where humans experience life, its pleasures, and its pains. Future pains and pleasures are hypothetical, but those of the present are real and visceral. Hunger felt in the present is far more pressing than hunger anticipated in the future, which makes food more valuable in the present than in the future. Danger in the present is far more pressing than future danger. And tools that secure safety today are thus more valuable than tools that secure safety in the future. Given a choice between obtaining a good in the present or in the future, man chooses the present. The higher valuation of present goods is a permanent fixture of human action. Time preference is the degree of preference of present goods over future goods. It is always positive because humans always prefer present over future goods. But its magnitude varies from person to person and for each person across their life. A high time preference indicates heavy discounting of the future in favor of the present and present orientation, while a low time preference implies a lower discounting of the future and more future orientation. Numerous social and institutional factors can affect an individual's time preference. Perhaps most important among them is the security of property, which would provide man a very effective way providing for his future. Acquiring durable goods is arguably the initiation of the process of the decline of time preference for humanity. A man who commands a valuable good that can be used in the future reduces the uncertainty that surrounds his future and becomes less likely to discount it less. As the concept of property rights becomes more widely accepted in a society, it leads to a widespread decline in time preference as individuals begin to increasingly value their increasingly secure future. As a property owner's certainty of their command of a good increases into the future, they are more likely to maintain the good in good shape and more likely to act with the future in mind. Now, discussing specifically one type of property which I think is extremely important for time preference is money. Providing for the future suffers from the problem of coincidence of wants usually discussed in the context of trade. The future is unknowable and uncertain. You don't know what exactly you're going to want in the future. In the same way that money solves the problem of coincidence of wants in trade, it solves it for future provision. By saving the most liquid good or the most saleable good and the generalized medium of exchange. The saver is able to exchange it in the future for the most valuable goods available for them in the future, and to do so at the time of their choosing. Money is thus held precisely because of uncertainty. In a future that is perfectly predictable, Individuals could arrange all their future financial inflows to go directly to the providers of the good they would need at the time they need them and would not need to hold any money. But in the real world, where the future is unpredictable, money is the best tool for providing for the future as its liquidity allows it to be converted to whatever goods are desired in the future. Money can be understood as the economic good likely to have the highest marginal utility in the future, as it can be most easily converted into whatever good has the highest marginal utility for you in the future. As human society develops money as a good, humans find a very convenient and powerful tool for transferring value into the future, and that allows them to lower their time preference and engage in more savings and future provision. As humans use money to conduct trade, the technology used for money improves and becomes more efficient at carrying out its task as a medium of exchange both in the present between individuals as well as between the present and the future. Money is a technology and the preponderance of users leads to a preponderance of choices competing against each other. Better ideas and technologies win out and drive out the inferior ones. A monetary medium which is easy to produce in excessive quantities in response to demand increases will likely experience substantial increases in its supply and a reduction in the economic value stored in it over the long term. On the other hand, monetary media that are difficult to produce in increasing quantities in response to demand increases are likely to witness their supply expand to a limited extent, and so they will be much better at preserving value. Those who store their wealth in the harder monies witness their wealth preserved and appreciate, while those who store it in easy money witness it dissipate. They may learn this lesson before it is too late, moving their wealth to the harder money. Or they may not, but in both cases the end result is the the majority of wealth will accrue to the hardest money and it will be held in the hardest money. This process, which I discuss in more detail in my book the Bitcoin Standard, explains the demonetization of seashells, glass beads, iron, copper, and other primitive monies in favor of gold and silver all over the world. It also explains the demonetization of silver in the 19th century and the precipitous decline in its value compared to gold, the undisputed winner of the global market for money. At the end of the 19th century, as the vast majority of the planet converged on the one commodity which had the reliably lowest annual supply, growth rate, secure savings into the future became ubiquitous, encouraging people all over the world to save for their future lower their time preference, making plenty of savings available for capital investment, increasing labor productivity, incentivizing investment in technological innovation, and increased prosperity. As humanity progresses into using monetary media that are harder to produce, our ability to provide for our future increases, the efficiency of transacting with our future selves increases and the uncertainty of the future declines. The security of money as a medium of saving has allowed countless people to escape the ravages of war and disaster with wealth they could easily transport worldwide. As the uncertainty of the future declines and the expected wealth we are able to transfer to it increases, the discounting of the future decreases and time preference declines. Now for a quick word from our sponsors. With fiat money constantly debasing, preserving your wealth isn't an option or luxury, it's a financial and moral imperative. If you're familiar with my work, you know the only financial advice I ever give is to buy and hold Bitcoin for the long term. This has never failed anyone. If you want to buy Bitcoin, I strongly recommend using Swan, a group of hardcore bitcoiners laser focused on making Bitcoin easily accessible. While most scramble to react to each new crisis, Swan Private clients are already positioned in the only monetary asset with absolute scarcity, Bitcoin. Swann Private partners with families and institutions who share a principled conviction in Bitcoin as the foundation for multigenerational wealth. With concierge service, deep expertise and uncompromising security, the Swann team helps clients exit the crumbling fiat system and secure their future in sound money. Today, Swann Private serves more than 5,000 high net worth clients who have purchased more than 4. $4.5 billion of Bitcoin and put it into cold storage. If you're ready to move beyond the false promises of Fiat, start your long term bitcoin strategy@swan.com safe S A I F now finally daylight have delivered a fantastic full function tablet with a paper like screen that's easy on your eyes and great for outdoor use. I've been using the Daylight computer to write my next book and it is absolutely fantastic and it has led me to invest in this company myself. Check out my interview with Anjan kata in episode 249. The Bitcoin standard Podcast is brought to you by Coinkite. Coinkite are my favorite makers of Bitcoin hardware. They produce the legendary open Dime, the first Bitcoin bearer asset, as well as the reliable cold card hardware wallet, the excellent stainless steel seed plates for storing your seed phrases, and the block. As time preference. Time preference can Be understood as the driver of saving and investment, or as Professor Hopper calls it, initiates the process of civilization. Once an individual is capable of lowering their time preference to engage in activities that do not offer immediate rewards, they are choosing to sacrifice present time and present resources in exchange for the future. Once they decide to forego consumption of present goods in order to save them for the future, they're lowering their time preference further, initiating the process of saving. Conceptually and chronologically, saving can only be understood as a precedent of investment and its necessary prerequisite. No matter the capital good, it can also be consumed or exchanged for goods that can be consumed in the present. Before one can invest capital, one must first defer its consumption by saving it. No matter how short the period between earning wealth and investing it, that period is a period of saving. This is the logic of grandmas and modern money managers worldwide. Reduce your expenditures to be able to save a certain sum you need as a cash balance to protect you from a rainy day or an accident. And once you have reached that amount, you should start investing the excess savings you have in productive businesses. The lowering of time preference is what drives individuals to accumulate cash balances and to invest. And the lower the time preference, the less they consume and the more the resources they will have to save and to invest. Each person keeps in cash a balance they would like to have with certainty and takes risk with the investment in search of return. Under a hard money standard such as gold, the hard money itself would be held as saving, as its relative scarcity makes it appreciate slightly every year. In modern easy money economy, cash is trash, as every investment manager knows. People instead hold the equivalent of their savings in government bonds or low risk investment stocks and take more risks with the rest of their portfolio. The more time preference declines, the more individuals are likely to defer consumption. The more cash they have on hand, the more they are willing to lend. The abundance of loanable funds allows for the financing of an increasing number of productive enterprises and with it rise the income and living standard. The increase in income in turn allows for more capital accumulation and a virtuous cycle of improving material well being, which can be understood as the process of civilization. As individuals lower their time preference and accumulate more capital, their productivity increases and as a result, they are incentivized to lower their time preference further. In the history of interest rates, Homer and cilla show a 5,000 year process of decline in interest rates intertwined with significant increases during periods of war, diseases and catastrophes. The move toward harder monies with better salability across time can be viewed as a contributor to the epical decline in time preference. By allowing humans better saving technology, Making the future less uncertain for them, and thus making them discount it less, Resulting in more savings and thus more capital available at lower interest rates. Now, for as long as individuals are able to accumulate capital and reasonably expect it to remain theirs after they invest in it, this process is likely to continue, generating a higher stock of capital and a lower interest rate. This process, however, can be interrupted and reversed through various factors. Natural disasters destroy property and capital, lower living standards and endanger survival, leading to a higher discounting of the future and a need to consume more of the available resources in the present, reducing capital accumulation and raising time preference. Violations of property rights are perhaps the most important social and institutional factor affecting time preference. Theft, vandalism and other forms of crime have a similar effect to natural disaster in that they reduce the stock of capital and goods available to an individual, forcing them to to consume a larger fraction of their resources in the present and increasing their uncertainty about the future. The increased occurrence of crime further leads to the expenditure of increasing resources on protection from crime, Taking resources away from other productive enterprises. The more prevalent crime, the more resources need to be dedicated to protection, which produces no increase in wealth. Now, far more significant than individual crime, as Professor Hoppe says, is institutional or organized crime in the form of predatory government policies. Whereas it is possible to purchase protection from random individual criminals, Government violations of property rights are systemic, recurring and inescapable because they are considered legitimate. It is much more difficult to defend against government violations of property rights than individual crime. And the devaluation of currency is one violation of property rights that is highly destructive of future orientation and the process of the lowering of time preference. Having money allows man to delay consumption in exchange for something that can hold value well and can be exchanged easily. Money naturally increases the expected future value of deferring consumption. And so the better the money is at holding onto its value into the future, the more reliably individuals can use this money to provide for their future selves and the less uncertainty they will have about their future selves. Historically, we can see salt, cattle, glass beads, limestone, seashells, iron, copper and silver had all been used as money in various times and places. By the end of the 19th century, the entire globe was practically on a gold standard. The use of an easier monetary medium would lead to its overproduction and thus a decline in its value and the dissipation of its monetary premium. With the gold standard of the late 19th century the majority of the world had access to a form of money that could hold its value well into the future. While also increasingly easy to transfer across space, saving for the future became increasingly reliable for more and more of the world's population with the ability to save in hard money. Everyone is constantly enticed to save, lower their time preference and reap future rewards. They see the benefits around them every day in falling prices and in the increased wealth of savers. Economic reality is constantly teaching everyone the high opportunity cost of spending in terms of future happiness. The 20th century's shift to an easier monetary medium has reversed this millennium old process of progressively lowering time preference. Rather than a world in which almost everyone had access to a store of value whose supply could only be increased at around 2% per year, which was gold, the 20th century gave us a hodgepodge of government provided abominations of currencies growing at 6 or 7% per year in only the best examples, usually achieving double digit percentage growth and occasionally triple digit. The numerical average for the growth of all national currencies. Broad supply during the period between 1960 and 2020 is 30% per year. Calculating the average weighed by currency size shows US roughly a 14% annual increase in the market supply of all fiat currencies, which can be viewed as the average money supply increase experienced by the average citizen of the fiat nations of the late 20th and early 21st century. So we moved from a world in which everybody had access to a money that appreciate whose supply increased at 2%, to a world in which everybody's money is increasing at an average of about 14%. Rather than expecting money to appreciate and thus have a reliable way to retain value into the future. Fiat returned humans of the 20th century to a far more primitive time when retaining value into the future was far less certain. And the value of their wealth was expected to be reduced in the future if it survived at all. The future is hazier with easy money and the inability to provide for the future makes it less certain. The increased uncertainty leads to a higher discounting of the future and thus a higher time preference. Fiat money effectively taxes future provision leading to a higher discounting of the future and an increase in basic present oriented behavior among individuals. Why delay consumption today when you are unsure what will happen to your property tomorrow? The extreme of this process can be seen when observing the effects of hyperinflation. Look at modern economies of Lebanon, Zimbabwe or Venezuela through their recent hyperinflationary episodes provides a good case study, as do the dozens of examples of hyperinflation in the 20th century. In each of these hyperinflationary scenarios, as the value of money was destroyed, along with it went concern for the future. Attention turns instead to the short term quest for survival. Saving becomes unthinkable and people seek to spend whatever money they have. As soon as they secure it, people begin to discount all things which have value for the long run, and capital is used for immediate consumption. In hyperinflationary economies, fruit bearing trees are chopped down for firewood in winter, businesses are liquidated to finance the owner's personal expenditure, and the proverbial seed corn is eaten. Human and physical capital leave the country to where savers can afford to maintain and operate them productively. With the future so heavily discounted, there is less incentive to be civil, prudent or law abiding and more incentive to be reckless, criminal or dangerous. Crime and violence become exceedingly common as everyone feels robbed and seeks to take it out on whoever has anything. Families break down under financial strain. While more extreme in the cases of hyperinflation, these trends are nonetheless ever present in milder forms under the yoke of the slow fiat inflationary bleed. The most immediate effect of the decline in the ability of money to maintain its value over time is an increase in consumption and a reduction in savings. Deferring consumption and delaying gratification requires one to give up immediate pleasure for future reward. The less reliable the medium of exchange, the lower the expected value of the future reward, the more expensive the initial sacrifice becomes and the less likely people are to defer consumption. If you look at the supermarket at a country that is witnessing hyperinflation, you see at the beginning of the month, everybody runs to the supermarket to try and spend all of the money that they have, because they know by the end of the month the money is going to be worth less. We see the same thing happening all over the world, but at a lower rate. The culture of conspicuous consumption that pervades our planet today cannot be understood except through the distorted incentives fiat creates around consumption. With the money constantly losing its value, deferring consumption and saving will likely have a negative expected value. Finding the right investment is difficult. It requires active management and supervision, and it entails risk. The path of least resistance, the path permeating the entire culture of fiat society, is to consume all of your income, living paycheck to paycheck. Now, on the other hand, when money is hard and can appreciate, individuals are likely to be very discerning about what they spend it on. As the opportunity cost appreciates over time, why buy a shoddy table, shirt or home when you can wait a little while and watch your savings appreciate to allow you to buy a better one. But with cash burning a hole in their pockets, consumers are less picky about the quality of what they buy. The shoddy table, home or shirt becomes a reasonable proposition when the alternative is to hold money that depreciates over time even more, allowing you to acquire an even lower quality product in the future. My favorite visual expression of the problem of time preference is in art. They say a picture is worth a thousand words, so here's 2000 words on the effect of fiat money on civilization. Art under a gold standard we see my favorite example. I'd like to contrast the Sistine Chapel, which Michelangelo painted in four years. And in my book I have a poem that Michelangelo wrote about how awful and horrible and difficult it was for him to paint the Sistine Chapel. Hanging for four years from the ceiling and painting every little meticulous detail. This is the kind of art that was funded on hard money. And you had artists and patrons who had the time preference to want to create things that survived for many generations and centuries. And that's why today, hundreds of years later, we're still talking about the Sistine Chapel. By contrast, we have this thing which was not, contrary to popular belief, painted by my 5 year old daughter. It was painted by a supposedly professional artist, but it could have been painted by my 5 year old daughter. She could recreate it in 15 minutes if she's just given a bucket of yellow and red paint. And this is art on easy money. Artists don't have the ability to spend the time and to think about producing something that is of such high quality as the Sistine Chapel. I think this is something that you see across all artistic disciplines. And the uncertainty of fiat also extends to all property. With government emboldened by its ability to create money from thin air, it grows increasingly omnipotent over all citizens property able to decree how they can use it or to confiscate it altogether. In the great fiction, Professor Hoppe likens fiat property to a sword of Damocles hanging over the head of all property owners who can have their property confiscated at any point in time, increasing their future uncertainty and reducing their provision for the future. Another way to understand the destructive impact of inflation on capital accumulation is that the threat of inflation encourages savers to invest in anything they expect will offer a better return than holding cash. When cash holds its value and appreciates an acceptable investment will return a positive nominal return which will also be a positive real return. Potential investors can be discerning, holding on to their cash while they wait to find the best opportunity. But when money is losing its value, savers have a strong impetus to avoid the devaluation of savings by investing, and so they become frantic to preserve their wealth and are less discriminating. Investments that offer a positive nominal return could nonetheless yield a negative real return. Business activities that destroy economic value and consume capital appear economical when measured against the debasing monetary unit and can continue to subsist, find investors and destroy capital because they're better than holding on to cash that is being destroyed at a faster pace. The destruction of wealth and savings does not magically create more productive opportunities in society, as Keynesian fantasists want us to believe. It simply reallocates the wealth into destructive and failed business opportunities. Related to the general rise in time preference and heavy discounting of the future is the rise of interpersonal conflict between individuals and the degradation of the manners and mores that make human society possible. Trade, social cooperation, and the ability of humans to live in close contact with one another in permanent settlements are dependent upon them learning to control their basic hostile animal instincts and responses and substitute them with reason and long term orientation. Religion, civic and social norms all encourage people to moderate their immediate impulses in exchange for the long term benefits of living in a society and cooperating with others. When these long term benefits seem far away, the incentive to sacrifice for them becomes weaker. When individuals witness their wealth dissipate, they rightly feel robbed and they question the utility of living in a society and respecting its mores rather than a way to ensure more prosperity for all. Society appears as a mechanism for an elite few to rob the majority. Under inflation, the crime rates soar and more conflict emerges. Those who feel robbed by the wealthy elite of society will find it relatively easier to justify aggressing against others property. Diminished hope for the future weakens the incentive to be civil and respectful of clients, employers and acquaintances. As the ability to provide for the future is compromised, the desire to account for it declines. The less certain the future appears, the more likely they are to engage in reckless behavior that could reward them in the short term while endangering them in the long term. The long term downside risk of these activities, such as imprisonment, death or mutilation, are discounted more heavily compared to the immediate reward of securing life's basic necessities. Now enter Bitcoin. The emergence of Bitcoin represents a fascinating opportunity to understand the role of money on time preference as well as to reverse the global trend of rising time preference caused by fiat money. Bitcoin is a peer to peer software for operating a payment network with its own native currency. The two most important features of Bitcoin in my opinion, are that its native currency has a strictly fixed supply that is completely irresponsive to demand, making it thus the hardest money ever invented. Also, Bitcoin allows for cross border payments without needing any political authority to supervise the transaction. These two properties arguably give Bitcoin the best salability across time and space. Its scarcity means that its supply cannot be diluted unexpectedly, ensuring it is likely to hold on to its value into the future. And its automated processing of payments means it can travel worldwide without having any single authority able to censor it or confiscate it. We can see this chart shows us Bitcoin's monetary policy. The black line is the total supply of Bitcoin across time. Currently it stands at around 18.9 million bitcoins. That's all the total number of Bitcoins that are in circulation today. It's got started at zero in 2009 and it's been increasing at a decreasing rate. Currently the annual rate of increase in the supply of Bitcoin is around 1.8 to 2% per year for the next three years. But then after that it drops by half. It's going to be around 1% for four years and then it'll drop by another half to drop to 0.5% the four years after that and it'll continue to drop by half roughly every four years until it goes to zero and the supply stops increasing and we settle at a total supply of bitcoin of 21 million bitcoins. We've never had a monetary asset like this where the supply is completely independent of demand. So if five people in the world are using Bitcoin today, there will only be 18.9 million bitcoins today. If 5 billion people are using Bitcoin today, there will only be 18.9. Now for a quick word from our sponsors. 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Go to the Bitcoin way.com and start bitcoining more confidently. Million Bitcoin for circulation so the operation of Bitcoin is completely orthogonal to the demand because of something called the the difficulty adjustment. So the supply cannot be affected by the demand. There's no mechanism for anybody to make more bitcoin. And on top of this, Bitcoin also has no single point of failure. It has no single piece of critical infrastructure or hardware. It has no single critical individual or organization for its operation. It's a software protocol open to anyone, anywhere who has a device that can receive around one or two megabytes of data every 10 minutes. And there are tens of billions of these devices worldwide. All Bitcoin does is that approximately every 10 minutes it produces a new record of ownership reflecting around 3,000 transactions reallocation of existing coins. This has never failed and has never produced a fraudulent transaction. So Bitcoin is purely voluntary monetary phenomena that does not require regulation, enforcement or a judicial system to function. It fits into the Austrian definition of sound money because it is chosen on the market and its value cannot be dictated by any authority. But of all the monies chosen on the market or imposed by government, Bitcoin is the only one whose supply is fixed and cannot expand in response to increasing demand. Now, analysts and experts have made many spectacular claims about what bitcoin and digital currencies can do. But most of that, to be honest with you, is meaningless hype. Bitcoin is pretty basic, and it simply allows you to hold and transfer ownership of currency units. It's a very boring game if you want to think about Bitcoin. It's a game where you just collect units and you can move them around. That's it. That's all that it does. In practice, the most prevalent use case for bitcoin has been its use as a store of value or as a saving account. Millions of people worldwide have used bitcoin as a savings account and they have profited from this immensely. Bitcoin's price, because of the limit on its supply, has appreciated at a compound annual growth rate of 215% per year in its first 10 full years of trading. Over a four year time frame, the bitcoin price has never been down, and it has been up under fivefold for only one day in all of its history. There was only one day in which bitcoin was worth less than five times higher than what it was worth four years ago, and it was only up under tenfold for only 100 days. So generally, holding on to bitcoin for more than four years implies a return of more than tenfold over the past five years. The average return on holding Bitcoin for four years was around 22 fold. So this is very different from your government's money. It just goes up in value. And as we can see, it works wonderfully as a saving account. You know, this is becoming increasingly popular around the world where people use bitcoin for what is called dollar cost averaging, where you buy a specific quantity of bitcoin recurringly. So to illustrate, here's what would have happened if you had bought $10 of Bitcoin every week for the last five years. $10 of Bitcoin every week means $2,600 invested, which is a small sum, but over that time, that $2,600 would have turned into $30,500. Now, pretty much everybody has $10. Well, not everybody, but a lot of people have $10 that they spend and waste on all kinds of meaningless nonsense. Not a lot of people have $30,000 in cash lying around that they could use for anything. And Bitcoin offers you the possibility to get this amount of cash, this amount of saving with small amounts of recurring purchases. And this is becoming increasingly popular as more and more people begin to take advantage of it. And it offers us a very interesting insight into the importance of money to time preference. Democracy, inflation, government predation, wars, the Keynesian managerial state, and the vast majority of modern factors causing a rise in time preference are still there and are usually getting worse. But for a small growing minority of people around the world, Bitcoin represents an escape hatch from at least monetary inflation. Unlike the vast majority of humans in the past century, Bitcoiners today are able to save for the future and expect to, with relatively low uncertainty, to have their savings available in the future and to have their purchasing power increase. If money is important for time preference, we would expect to see these people differentiate themselves from their fiat peers. My personal experience from years in the bitcoin space provides several compelling pieces of evidence to support this claim. Recently, I ran a poll for my followers on Twitter who have held Bitcoin for more than a year, asking them of the percentages of their income they saved or invested before getting into Bitcoin and what percentage they save or invest today, after at least one year of holding on to Bitcoin, the results are absolutely amazing. 48% of people used to save less than 10% of their income before Bitcoin. After Bitcoin, only 11% of people saved less than 10% of their income. The ratio of people saving 10 to 25% stayed the same. The number of people saving from 25 to 50% went up from 12% to 23%. So it's almost double. And then the number of people saving over 50% of their income has gone up from 15% to 40%. It's a huge increase. 40% of people who have held on to bitcoin for more than a year. And obviously this is a sample that's, you know, it isn't representative of the general population. These are people who follow me on Twitter, so they've come across these ideas. They've likely come across the concept of saving and seen this connection. But still, this is a very stark change. We've gone from a majority of people. The average savings rate before Bitcoin was probably around 10%. After Bitcoin, it would be somewhere around 20 or 30, perhaps as the average saving rate. In 2018, I published the Bitcoin standard an Academic book which had a whole chapter on time preference and money. Now, I did not expect discussion of time preference to be popular with people who have no background in Austrian economics, but it was. Three years later, the book has become the best selling book on bitcoin and it's been translated to 25 languages worldwide. I've been told personally by thousands of people. Thank you. I've been told personally by thousands of people how it helped them explain the changes in their life after moving to bitcoin. The very common story I heard from bitcoiners is I used to spend all my money every month on all kinds of stupid, frivolous nonsense. But when I learned about bitcoin, I cut down on my expenses drastically and started saving everything in bitcoin. Along with that came a market change in future orientation across all manners of personal behavior. Some decided to start a family. Some got over depression and found meaning to life. Some quit dead end careers and took up challenging and engaging work. And many quit bad habits. One of the most common stories is of people quitting alcohol and drugs. My personal favorite was when somebody told me that they introduced their drug dealer to bitcoin. They started saving in bitcoin, made a lot of money on bitcoin, decided that holding bitcoin was a better use of their time than dealing drugs, forcing the person who introduced him to bitcoin to quit drugs because he no longer had a drug dealer. And this is actually quite common. Just a quick search of Twitter, just bitcoin and drugs will turn up all these stories of people who quit drugs in order to do bitcoin instead. And specifically, you know, in its early days, bitcoin was used for buying drugs online. So a lot of people who were into got into bitcoin because of the drugs. They used it to buy drugs online. But as the common saying goes, come for the drugs and stay for the hard money. These people find a much better drug when they realize that, you know, you can just make your future better instead of just getting high today. And so these are, there's many examples. I quit meth because now bitcoin is going up. I can't stop smiling and I don't want my teeth ruined. Bitcoin is my anti drug and these are extremely common stories and I think they're quite telling. So the story of saving is a common one. Before bitcoin, most people alive today simply had no conception of saving and delayed gratification. Everywhere in the world, people have recollections of stories of people who have saved and worked Hard and had their wealth destroyed by inflation. And this demotivates people. The uncertainty of saving in fiat heavily discounts the future payoff, reducing the incentive to invest. The opportunity cost of spending today is relatively low tomorrow because of the absence of a mechanism for transferring wealth from today to tomorrow. You spent all the money you earned and when you had major expenses, you got into debt to pay it. You continue to work and pay off the debts indefinitely. To the extent most people invest, they do so through their work retirement funds. Those who do invest are mostly those who spend considerable amounts of time studying the markets and trading, making it basically a job. The notion of saving passively while earning money from a job is very rare in the fiat economy. But after Bitcoin, it becomes extremely common. People from all over the world are now obsessed with stacking sats, where SAT is refers to the satoshi, which is the smallest unit of Bitcoin. 100 million Satoshis make one Bitcoin. Millions of people worldwide now work their day jobs, spend as little as they can and stack as much sats as possible. Once someone is introduced to the magic of Bitcoin's rapidly increasing value and because of its limited supply, it is inevitable that they start calculating how much wealth they could have had if they had spent on Bitcoin, the money that they spent on other things, particularly frivolous spending. So Bitcoin is the free market solution to the problem of rising time preference. It is the technological solution that allows anyone to rejoin the process of lowering time preference, saving, capital accumulation and civilization. It requires no political permission. It obviates politics and monetary policy. It is unstoppable and it is hugely rewarding for anyone who adopts it as it is expected to lose its value over time. Easy money is not a reliable way of providing for the future, which increases the uncertainty of the future, encouraging heavier discounting of the future or a higher time preference as observed in the 20th century under the fiat standard. Because it can be expected to hold on to its value into the future. Hard money increases the potential payoff from savings and delaying gratification, reducing the uncertainty of the future and encouraging more saving and more future oriented behavior as was the case under the gold standard and as we can see in the nascent Bitcoin standard. Thank you very much. You can learn more about this topics in my book the Bitcoin Standard. And coming in next couple of months is the fiat standard, the sequel to it and early 22. I have a textbook, introductory textbook of economics called Principles of Economics coming as well and you can learn more about all of this on my website, seyfeddin.com thank you very much. SA.