The Only People Who Got Rich From Bitcoin Forgot They Owned It - LEDGER CoFounder, Eric Larcheveque

[00:00:00]I read you have a 100% of your liquid net worth in Bitcoin.

[00:00:03]>> so it's maybe 99 or 98, you know, because of course I have euros because for every day I No, I'm not paying in Bitcoins, so I don't care about that, you know, I don't want to buy my bread in Bitcoin.

[00:00:16]It's not the issue, you know, it doesn't solve that, Bitcoin.

[00:00:20]But yeah, all my my um liquidities and everything are in Sometimes I sell Bitcoin, sometimes I buy Bitcoin. It It depends of of my needs in real life, you know. Because I don't want to die with my Bitcoins, you know, it's not just I'm just accumulating to accumulate. Uh if one day I have something to buy because I want to do something, then I will sell Bitcoins, you know.

[00:00:44]Um it's I'm here to live also my life.

[00:00:48]>> You're not the Michael Saylor of France.

[00:00:50]>> No, no, no, no, no. I I Well, I'm keeping a lot, you know, for the future and you know, I'm more more like thinking about future and I I'm not someone anyway who burns cash to buy stuff. I don't have watch, I don't have cars, I don't you know, I I need nothing. I don't care.

[00:01:06]Uh but sometimes I like to go on holidays or you know, and and and yeah, uh it's fine for me to sell uh Bitcoins for experience, you know.

[00:01:15]>> When you understand Bitcoin, you understand the low time preference.

[00:01:19]>> Yeah, but yeah, yeah, that's uh sure. That's the center of everything, you know. Time preference is what defines a civilization and Bitcoin is the remedy.

[00:01:31]>> Can you explain more?

[00:01:33]>> About what? Time preference or >> About Bitcoin and time preference and the key principle that make you so bullish or belie- believer in Bitcoin.

[00:01:43]>> Yeah, sure. Well, maybe your auditors are already um already know what's what's time preference, but I'm going to explain again. It's everything starts with a shamallow, you know. Uh so there is the shamallow experiment the marshmallow experiment sorry for English [laughter] we say we say shamallow the marshmallow experiment it's a Stanford experiment basically you have kids you know like they are 5 6 year old or 4 5 and the experience is the following an adult comes and gives to a kid you know a marshmallow and they say okay it's for you and now you have two options I'm going to leave this room leave you alone with this marshmallow and either and if when I come back you didn't eat the marshmallow in like 15 minutes which is quite a long time to be alone then I give you a second one and so it's an illustration of time preference either you know your time preference is long-term and then you are not going to satisfy yourself immediately you are going to resist and not eat the shamallow and then because you know because you trust the adult that you are going to have a second one or you cannot resist and you eat now and so you have a low time preference you know and this experience was quite interesting because basically it shows how you are going to behave in the future you know in a way it's not always 100% working like that but basically you have people who are eating the shamallow immediately and they are not going to have big studies are going to have more addictions it's it's are not going to be good you know to invest their time they are going to always to to take everything now you know and say okay the future can wait and there are the others who understand the importance of you know not indulging you immediately and maybe it will do long story long studies to save some money to not have addictions you know to think about the future And, so this is time preference.

[00:03:54]And it's a behavioral behavioral science, but it works also for civilization.

[00:04:00]A civilization who have a long uh time preference is going to build cathedrals, you know, uh infrastructure. A civilization who has a low time preference is basically going to watch Netflix all day, you know, and do nothing.

[00:04:15]And what is going to have an impact on the time preference as a society is money.

[00:04:21]If you have money that doesn't keep its value, you know, that disappear, then the invitation is to spend it now, you know, to do some consumerism, to buy you don't need, you know, because anyway you say, "Okay, I'm going to buy now because anyway, why to keep it?

[00:04:38]Because the value of this money tomorrow is nothing."

[00:04:42]And a money that can holds on its value, you know, then invites for keeping the money, you know, uh to build uh your assets and to wait and not to buy stuff you don't need, you know.

[00:04:58]And and so the way money is has a big influence on civilization. One of the the best time for our modern civilization was basically uh when we were to the gold standard in the end of like 18th, 19th century, where we had a big advance in civilization because uh basically everything was related to gold and so you couldn't have like inflation, you couldn't like conflate money.

[00:05:26]Um and now we are in the opposite situation where money is losing a lot of ground, where even politics are grounded in low time preference, like, "Okay, I'm paying now. I I'm you know, we are like spending everything now, putting all in the debt, you know, to to solve issues now, you know, so everyone is happy now, but in the future we don't care, you know, we send all the problems into the future. And all that basically uh creates the situation which is now, where the future is coming and knocking on the door.

[00:05:58]And you have to pay at some point, you know? And so, Bitcoin is going back back to sound money uh and money who has a long time preference. And it's healing the civilization, you know, and that's why as a civilization, we need Bitcoin because it can realign your needs, you know, uh with the future.

[00:06:21]And that's why Bitcoin is so powerful.

[00:06:26]>> How do you explain the concept of crazy volatility in this equation of sound money to someone who >> Yeah.

[00:06:34]>> is struggling today, but say, "Hey, either I struggle today because wage deflation, I don't make enough money, the asset prices go crazy because there's crazy money printing, all that stuff. But if I put my money in this thing, I could be down 50% in 2 months."

[00:06:51]>> Yeah, sure. So, um all that is nice in theory, you know, but then when you are in the day-to-day life, uh and you face to the reality, it's not that easy.

[00:07:04]So, I think that the best um advice that we can give on that is really to see Bitcoin as a long-term asset only and then always zoom out, you know, >> [clears throat] >> in your um in your view.

[00:07:22]And to not put everything that you have into Bitcoin, like right now, that does not make any sense, you know, it's not the right advice. Don't do like me.

[00:07:30]>> I wanted to say >> No, no, man. And [laughter] I always say that, you know, me I I I started a long time ago, I have all these convictions and everything, but with all the volatility, it's important the best approach, the best advice is to put one slice of what you have every month or every week, put it in Bitcoin, and to buy automatically. This is DCA, dollar cost averaging. It's a very known well known technique, and to forget about your Bitcoins, you know. And the only way to forget about it is to make sure you don't put what you need for day-to-day life in Bitcoins.

[00:08:07]Because if you put too much, then you're going to watch the price, and then you are going to take bad decisions. The only people I know who had a success with Bitcoin investment is the one who forgot about it.

[00:08:23]100% of the people who invested into Bitcoin and either put too much, you know, or tried to beat the market, you know, by selling or going to shitcoins, you know, they all lost everything. Because you start to lose, and then you ah You know, because when you win something, you forget very easily. But when you lose, you know, it's in your mind for a long time, and so you want to to to to make over, you know, you want to take revenge on that, and you take more and more risk, and 100% at the end you have nothing, and the only one is the one who forgot.

[00:08:58]Um And so a lot of people are telling themselves, "If I could go back, you know, to 2010, 2011, then I would buy Bitcoin, you know, at what, 1 cent?"

[00:09:08]>> Of course.

[00:09:09]>> And but the reality is the people who did that, when Bitcoin did 10 times, you know, 10 10x, 15 50x, then they sold everything, you know? And that's that's life. And the only one who didn't sold are the crazies, you know, the one say, "Okay, Bitcoin is like the future," or the one who forgot the existence of their Bitcoins.

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