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For the most part I think people's time preference is probably heavily genetically-influenced and to the extent it's environmentally-influenced, it's pretty baked in by someone's mid-20s. Decreasing time preference through learned self-restraint is probably just not a thing. External incentives are required.

HoloKat 2y ago

Genetically? I don’t see how…

Everything you said to be false here was true for me. My time preference changed significantly after bitcoin. I grew up poor and had a survive day to day mentality. It wasn’t until I didn’t have to struggle financially that I was able to learn about investing, and thinking long term. Bitcoin then amplified that type of thinking.

Imo time preferences are learned, and depend a lot on your state of mind. When you don’t have the resources you can’t be bothered to think long term. But as your needs are met and you learn more, it’s easier to plan ahead.

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Discussion

Mike Brock 2y ago

Your environment, living conditions and external incentives affect your time preference, yes. Like, if you think an asset you're sitting on -- say bitcoin -- is going to be worth 100x in the near future, that is going to affect your time preference, yes. But what if it didn't? What if you didn't believe it was going to go up? Would you have equally lower time preference?

Mike Brock 2y ago

This has all been extensively researched to look at baselines in people. See: Stanford marshmallow experiment, etc.

HoloKat 2y ago

Yeah I’ve read those but did not reach the same conclusions. The person’s state of mind was not in a struggling mentality hence the marshmallow experiment useless.

Mike Brock 2y ago

I'm not arguing that people would express different time preferences in different circumstances. If we didn't, that would not be conducive to survival. My objection is to the idea that there's a sort of "spiritual awakening" people will have once they understand bitcoin which will shift them towards a more anarchistic worldview and disciplined, low time preference behavior.

I actually think this is quasi-religious in the way some people talk like that.

HoloKat 2y ago

Ok. Yeah hard to say, I imagine it depends on the individual and their life circumstances. You can lead a horse to water but can’t make it drink. Some people will stick to their ways no matter what.

Mike Brock 2y ago

Well, I understand bitcoin very deeply and I don't think that way. I talk to many prominent bitcoiners -- including some core devs -- that don't think that way. So the empirical evidence that people who have convinced themselves of this are echo-chambering and part of a self-selection effect is actually quite high, in my opinion.

HoloKat 2y ago

Interesting. I’ve heard many similar stories to mine in bitcoin spaces / clubhouse conversations.

HoloKat 2y ago

My time preference for bitcoin does not rest on fiat valuation. I’d be lying if I said I didn’t feel more at peace knowing my grandkids or maybe their grandkids might be well off, but that’s not why I hodl. To me, a more fair and inclusive monetary system is more important.

Also, bitcoin alone didn’t lower my time preference, that was already changed when I stopped struggling and could think ahead for a rainy day - starting with savings and ultimately investing.

Mike Brock 2y ago

It is also just true that people's time preference drifts lower as we age and mature. Which is why I might push back on comparing ourselves to our younger selves as proof, here.

HoloKat 2y ago

Age probably also plays a role but doesn’t that also mean you just had more time to learn? Regardless of age, I think your immediate mentality has more impact on your time preference.

roya ୨୧ 2y ago

This is the truth. Maslow didn’t make that hierarchy of needs for nothing.

When you’re focus is on “can I make rent this month, or buy food” it’s hard to think of anything else.

Mike Brock 2y ago

And if any of us returned to that state, by environmental favors or turn of fortune, the luxury of saving for the future would evaporate. At a certain lack of income, regardless of whether your money is deflationary, stable or inflationary, is going to demand high time preference behavior as a necessity of subsistence.