This is a transcribed excerpt of the “Bitcoin Magazine Podcast,” hosted by P and Q. In this episode, they are joined by Knut Svanholm to talk about how Bitcoin can improve all facets of your life and the ways Bitcoin works as a weapon of peace.
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Knut Svanholm: I realized yesterday while browsing YouTube, that Pink Floyd’s “The Wall” movie had a huge impact on how I view the world. I saw that when I was 16 and it was pretty profound. I thought it was pretty profound at the time. If you remember that movie, I like them because it was like no other movie. The storytelling is very different from a linear movie, but it starts with this guy whose father died in the war. And there’s a powerful line about, “That’s when Her Majesty’s Royal Command took my daddy from me. That’s so tough; some institution has the right to take someone else’s life and order them to die for a higher cost and what that does to the generations that follow. Of course after that, there’s the whole school system thing where you have this meat grinder factory mashing people together into voting cattle. So I think, in hindsight, that movie probably had a big impact on how I view the world and how I detest collectivism.
More than that, I grew up in the countryside with a liberty-minded father. I sailed the Seven Seas. I worked on a toll ship for eight years, and I saw a lot of different countries. Even when I was a kid, I lived abroad a couple of times: half a year in Mozambique when I was like 10 or 11 and in Tanzania and some other places. I guess I was less inclined to believe whatever national lies were around at the time.
Remember the 1980s in Sweden; we had no commercial TV channels and no commercial radio channels. It’s all state owned and it is still to this day, to a large extent. There’s a subsidy system that big media companies get the money from the state, and of course they don’t bite the hand that feeds them. So there’s that. But in the ‘80s, it was really cut off from the rest of the world. We got to watch cartoons once a year during Christmas Eve. That’s when we got to see Donald Duck once a year. So that’s how growing up in Sweden in the ‘80s was. It was pretty, pretty dark in hindsight. I guess all of those things influenced my thinking.
Q: I want to talk about time preference. For our audience members who maybe don’t understand this, could you help them understand what’s the difference between a high and low time preference?
Svanholm: A high time preference is when you prioritize quick satisfaction, when you don’t delay gratification. So if you’re robbed of everything you own, you adopt a high time preference because you need to, because you need food to survive and you need shelter to not — in most places — you need shelter not to freeze to death at night. So you become a high-time-preference individual that prioritizes short-term gains which also makes you prone to crime and bad decision making, short-term decision-making.
And a low time preference is the opposite of that. That’s when you think about the future and you think about forthcoming generations. You plan ahead and you build something for the future. I believe that a high time preference and a low time preference are on the same scale as fear and love because a high time preference to me is a fearful state of being. And what’s the opposite of fear? The opposite of fear is love. So adopting a lower time preference or being able to adopt a lower time preference because you have more capital and a more certain future that allows you to be more loving to not only your fellow human beings, but to yourself.
I think this is the killer app of Bitcoin, is that it makes us better human beings. It makes us friendlier to one another and also friendlier and more loving to ourselves. We can afford to take care of ourselves and take care of others to a larger extent. My talk was about this to a large extent.
It ties into something my grandfather said, which is, “That which you can do without, you own,” which is something that has been stuck in my mind ever since the first time I heard it. It’s the flip side of “Your possessions end up owning you.” Because if you can control your mind to the extent that you don’t crave things anymore, then you own those things that you don’t crave, in a sense. For instance, I would never buy a Lambo regardless of how much bitcoin I have or how wealthy I become. I don’t crave Lambos. In a sense, I own all the Lambos because I control my urges. I think Bitcoin is like a gateway drug to that insight.
Sooner or later Bitcoiners come to the realization that they don’t need that much shit in their life. Material things matter less and less the longer you are in Bitcoin. And it’s going to be very interesting to see how this plays out because in fiat land, as we know, in order to become rich or when you do become rich, you buy a load of shit lingling and crap that you don’t need, and I think this reverses on a post hyperbitcoinization. We’ll have an abundant future without over consumption because we won’t crave as much shit as we do now. I think that’s the real killer thing here.
Q: I wanna try to unpack that a little bit. There’s a question behind all of this, and I’ll start with a question, which is: Do you think people recognize that when they use fiat money, it inflates so regularly, so they need to be spending it constantly? Versus with bitcoin, I think all of us recognize the value proposition of spending our bitcoin today is far greater than if we were to hold it and then spend it in the future.
Svanholm: I don’t think they realize it on a conscious level, but that’s what it does to people. People who acquire assets and take on big loans win the fiat game. That’s how you win. You buy a ton of shit, including houses, for instance. Real estate is a shitcoin. I saw some metric from the U.S. that over half of the real estate bought in the U.S. last year was not for people to live in themselves, but for an Airbnb use.
So it’s becoming this, “You’ll own nothing and you’ll be happy” playing out in front of our eyes. But I prefer that “You’ll owe nothing and be happy” future of Bitcoin because just replace one letter and and you get the Bitcoin future, which is you accumulate capital first and then you consume — if you’re willing to part with your bitcoin. The longer you hold your bitcoin, the more you realize how valuable they really are.
That’s where I come to the second prediction about the future. I’ve experienced it even now because I’ve collaborated with a whole bunch of Bitcoiners and they’ve given me stuff. They’ve given me their services and physical stuff like FractalEncrypt’s art pieces, for instance. They’ve helped me with translations and proofreading and editing and animations and narration, you name it — all for free. We very rarely exchange satoshis with one another. That sort of leads me to the conclusion that us being nice to one another is just Gresham’s Law on a bitcoin standard because we find our stacks to be so valuable so we’re willing to stake our reputational capital instead. That is the less valuable coin if you compare the two. So I think there’s a connection there and that’s why I think that the necessity for money to exist at all goes down in a hyperbitcoinized world.
That’s the real scaling solution. Fewer transactions are necessary. Ironically, this “don’t trust, verify” attitude of Bitcoiners leads to a world in which we can trust one another more. If you compare it to how you interact with your friends and your family, you very rarely exchange money there, too. You help one another without even asking for it.
This is where I think Bitcoin is going or people in Bitcoin are going toward the state where we’re always incentivized to help one another. It’s not only the time-preference thing, but it’s also pumping our bags. We want Bitcoin to succeed, therefore, we want other Bitcoiners to succeed.
This is the main reason that we’re having this conversation right now. We all love Bitcoin and we want others to come on board and enjoy it too. And in the process, we enrich ourselves if we hold some bitcoin, so we’re incentivized to help one another and exchange favors for free.
The funny thing is that doesn’t go away just because we hyperbitcoinize; we still have that. The Bitcoin private key is a key to your heart, literally. We run this mathematical experiment in the back of our heads and we just become better people.
I just find that endlessly fascinating. I can’t stop thinking about it. It gives me hope.