Time is money

Written by knut.svanholm | Published 2018/04/30
Tech Story Tags: bitcoin | time | money | investment | inflation

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What’s the true value of time? Regardless of anyone’s opinion on how to value it properly, we can all agree that our time is worth something. Therefore, time is money. Literally. One can always be traded for the other, it’s just the ratio between them that differs. Everyone sells their time, either through a product that took them a certain time to produce, or as a service and services always take time. If you’re an employee on a steady payroll, you typically sell eight hours of your day per day. If you’re doing something you truly love to do, that eight hour day still belongs to you in a way, since you’re doing what you’d probably be doing anyway, had you’ve had the chance to do it for free. Money is also connected to time via inflation. Traditional currencies lose their value over time and therefore everyone using them have a constant incentive to spend their money. An equation describing the relationship between time and money would look somewhat like “time equals (how highly you regard your time) divided by money”.

Enter Bitcoin. Bitcoin is related to time very directly. It has a pre-programmed monetary policy. Every four years the reward given to miners for securing the network is halved. This means that there’s a de-accelerating inflation going on. Currently, a little over 17 million Bitcoin has been mined and the last one will be mined around the year 2140, adding up to a total of 21 million. This makes Bitcoin the antidote to inflating currencies. It also radically changes the relation between money and time. If you own a Bitcoin, that is if you own the private keys to a Bitcoin, you will still own that Bitcoin no matter how much time passes. Just this single feature makes a Bitcoin valuable. Very valuable and, very likely, more valuable the more time passes. Its brief history already clearly shows this to be at least partially true. This turns every current economic model on its head.

Our current models are driven by debt and interest rates. Bitcoin is supply and demand and that’s it. Sure, other models can be built on top of that but the foundations stand firm despite the thunderous storms that surround them. There’s a lot of noise. Those who gaze beyond the buzzwords see a bright future though. A future in which saving money pays off and spending it to soon costs a little. To a Bitcoiner, time is worth more than it is to a nocoiner. A Bitcoiner is more reluctant to give it away. This makes the Bitcoiner more prone to make sound, long term investments. Sure, you can say that Bitcoin is a risky investment but not having any Bitcoin is also very risky. If it takes off and really becomes the world’s reserve currency, getting your hands on some will soon cost you a lot more than it does now. Buying Bitcoin is buying time in this sense. It is not at all unthinkable, on the contrary rather probable, that an investment in Bitcoin will echo wealth through generations. Your offspring can inherit your Bitcoin without the risk of being bereft of it by the taxman or any other bureaucrat since they can’t even know that you have it in the first place. This feature alone makes Bitcoin superior to gold or other traditional store of value assets.


Published by HackerNoon on 2018/04/30