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96 sats \ 5 replies \ @DiedOnTitan 16 Jun \ on: Why Gresham's Law Doesn't Apply To Bitcoin And Fiat econ
You buy a piece of candy for $0.10. Which dime do you spend, which dime do you keep? It's important to remember that Gresham's Law means that bad money "drives out" good money from circulation.
https://m.stacker.news/35654
I'll take the Merc, please.
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No question. With 90% silver content, the melt weight alone is at least 10x the face value.
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Of course. Just like you would get rid of shitty fiat and save bitcoin. Under this theory people will spend their shitty fiat first and save the good money. That's a strong tendency to fight against.
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Exactly. That's Gresham's Law. The interesting aspect of it for Bitcoin is that the world is still very much discovering what the "price" is. There is an increasingly real chance that 1 sat will become the global base unit of account effectively replacing USD and gold. When this happens, we flip to the Bitcoin Standard where everything gets priced in sats.
Having grown up in the fiat standard, we can wrap our heads around notions like the global economy is worth $100 trillion USD. We all know that there is nothing close to $100 trillion USD in circulation, but it's a unit of account we kind of understand (it's a large number).
If we flip this unit of account and internalize the value of the global economy to be worth 2.1 quadrillion sats (the total fixed supply), then 1 sat equals ~$0.04. Which makes 1 bitcoin worth $4,760,000. So...stay humble and stack.
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