It’s only after spending time on this sub consistently for a few days that I realise that “The Bitcoin Standard” doesn’t just refer to the iconic book, but also refers to an ingrained way of life.
Recently I posted a question about Gresham’s law and received various responses that offered novel perspectives to me. I thought I needed to write this to sort out all the intriguing insights in my mind.
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Firstly, the idea that you are not just buying Bitcoin, but you are selling fiat. In this case, Gresham’s law applies because you are expending your bad money (fiat).
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It seems that the fastest way to break free of the fiat chains is to have your salary paid out in BTC. That way, swapping BTC for fiat becomes distasteful, for fiat’s purchasing power gets eroded over time, no thanks to inflation. BTC is an appreciating asset that you don’t want to see reduced because of transaction fees. In this case, Gresham’s law breaks down.
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When you spend sats, you won’t feel FOMO about letting them go when you inculcate a habit of replacing what you spend. This goes back to the first point - that you’re selling fiat for BTC, not buying BTC.
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Gresham’s law may apply better when you don’t compare fiat with BTC. In the case of BTC, Gresham’s law applies when you think of KYC sats as bad money and non-KYC sats as good money.
I love the learning here!