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43 sats \ 2 replies \ @Solomonsatoshi 24 Oct \ on: MONEY CLASS OF THE DAY: Sir Thomas Gresham and the Economic Law He Didn't Make econ
Ok but given the Alden example it seems like a fairly subtle somewhat technocratic or academic distinction.
In common parlance what people are usually saying is Bitcoin is better to hold than fiat over time.
Even if spending Bitcoin did not incur tax liabilities surely I would still logically prefer to spend fiat which is constantly debasing than Bitcoin which tends to appreciate?
agreed, but we're still not in Gresham's law territory then -- it's all just monetary competition and how to optimize your balance sheet across asset classes.
Gresham's law, as I explained, only holds under fixed regimes presenting arbitrage opportunities.
Put differently, do you think there's somebody upholding a fixed BTC/USD rate that we can all Gresham off?
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No and hopefully never will be, but if they ever impose an E.O.6102฿ there might well be a fixed price set for the acquisition!
My point remains that for the average punter Bitcoin is harder money, better for saving/hoarding than fiat and so they will use fiat to buy it and dispose of fiat as quickly as possible for consumption...and they will (mis)use Greshams Law as shorthand to express that. You are probably right to critique that use as it not technically correct, but people will always tend to take shortcuts.
There is also however as you mentioned, considerable market distortion caused by the arbitrary designation of Bitcoin as a commodity resulting in tax assessment and payment obligations which hugely obstructs use of Bitcoin a payments protocol.
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