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25 sats \ 6 replies \ @ek 24 Sep 2022 \ parent \ on: Is it hypocrisy for Bitcoiners to use Patreon and other fiat tools to get paid? bitcoin
Uhm, Gresham's law is the opposite of what you stated: "bad money drives out good"
You maybe meant Thier's law.
I meant I'd rather get rid of fiat, which drives it out of my accounts, but sure, it goes into circulation.
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Both laws apply as a buyer is buying "good" money with "bad" money and the seller is getting "bad" money for "good" money.
Really it's a difference of what people consider "good" vs "bad"
Edit:
If you look at these laws through services (i.e do I use "good" or "bad" money for a haircut) then there is a notable difference.
Ultimately I think good money always wins (and then the cycle starts over again).
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Both laws apply [...] Really it's a difference of what people consider "good" vs "bad"
I'm not sure about that.
I understood Gresham's law like this: It only applies if the bad money is declared legal tender. Then the bad money drives the good money out of circulation since no one will spend the good money if he can spend the bad money (same face value).
If legal tender laws don't apply, then people won't accept the bad money. Thus, good money drives the the bad money out of circulation in this case (Thier's law).
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[The government imposes] price control by coercion on the “exchange rate” between the two types of coin. By insisting on the par-ratio when the worn coins (bad money) should exchange at 10 percent discount, it artificially overvalues the worn coins and undervalues new coins (good money). Consequently, everyone will circulate the worn coins, and hoard or export the new. “Bad money drives out good money,” then, not on the free market, but as the direct result of governmental intervention in the market.
Source: "What Has Government Done to Our Money?" by Murray N. Rothbard.
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I guess the question I have is: how do you define "good" money?
I think there are many instances where Money A may be better than Money B based on a specific feature. For example, if Money A is easier to transport internationally, you may consider exchange Money B for Money A for your short-term use (since Money A would be considered the "better" money)
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I guess the question I have is: how do you define "good" money?
Good money should have these properties:
- verifiable
- fungible
- portable
- durable
- divisible
- scarce
- censorship resistant
- established history
Therefore, we can use these properties for comparison. Bitcoin beats gold and fiat in almost all of these terms. See this article: https://nakamotoinstitute.org/mempool/the-bullish-case-for-bitcoin/
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