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193 sats \ 1 reply \ @ek 15 Dec 2022 \ parent \ on: Milton Friedman & undeniable beauty of proof of future spiral of death Q.E.D. bitcoin
"Gresham's law is a monetary principle stating that "bad money drives out good" https://en.wikipedia.org/wiki/Gresham%27s_law
You again - conveniently? - didn't include the next phrase:
For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will gradually disappear from circulation.
Gresham's law only applies if bad money is accepted by law.
If this is no longer the case, the opposite is true:
Those examples show that in the absence of effective legal tender laws, Gresham's Law works in reverse. If given the choice of what money to accept, people will transact with money they believe to be of highest long-term value. If not given the choice and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their own possession, and pass the bad money to others.
https://en.wikipedia.org/wiki/Gresham%27s_law#Reverse_of_Gresham's_law_(Thiers'_law)
So no. People won't hoard bitcoin more and more. People will accept bitcoin more and more until other currencies are no longer accepted.
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0 sats \ 0 replies \ @jk_14 OP 15 Dec 2022
"pointed out that, during the great inflation in the Weimar Republic in 1923, as the official money became so worthless that virtually nobody would take it, people simply stopped accepting the currency in exchange for goods. That was particularly serious because farmers began to hoard food"
Even this wiki description itself clearly shows, that so called "Reverse_of_Gresham's_law_(Thiers'_law)" - is simply bullshit, and not a law by any means. It's just an artifact of Gresham's law in extraordinary market circumstances (so, exactly the case of Weimar Republic in 1923)
And in such ugly economic situation: the Producer of goods has such an advantage over the Buyer - that he is able to dictate in which kind of money customer should pay him for goods.
Why does he do it? Yes, you are right! Just because: he want to hoard best possible money, according to Gresham's law, of course.
Like farmers began to hoard food because they even food saw as a better "money" than worthless Mark - exactly the same way people will more and more hoard Bitcoin with every consecutive halving. Clear as crystal, sorry.
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