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There is a theory called Gresham's Law, that states that bad money drives out good, because people hoard the good money. This is one of the problems with bitco

There is a theory called Gresham's Law, that states that bad money drives out good, because people hoard the good money. This is one of the problems with bitcoin right now. As a currency its variability AND value is high, which leads to people not wanting to spend it. This ironically leads to a problem with the currency not being used. There are other problems, but for its wide spread acceptance and use to buy pizza, I sure don't want to spend something that is worth 1$ today, but might be worth 100$ tomorrow.

vinchuco 9y ago
>The Nobel prize-winner Robert Mundell believes that Gresham's Law could be more accurately rendered, taking care of the reverse, if it were expressed as, "Bad money drives out good if they exchange for the same price." [1] Not attacking your main point, but questioning the correct application of this principle. It seems like it originally was meant to talk about the same resource (a coin made of metal, metal becoming higher price than the coin). It doesn't seem like Bitcoins are intrinsically made of dollars. [1] https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law
6nf 9y ago
> This ironically leads to a problem with the currency not being used. This is not a problem for most of us.
kamaal 9y ago
There is also one more scenario. The moment you have bulk of the bitcoin money in the hands of the 0.01% or even the 1%(Thanks to mining) people- The remainder 99.whatever% people can simply call it quits, refuse to trade in bitcoins and start their own currency. What will follow is obvious, the rich people and their whole enterprise can end up being worth 0. To prevent it they will be forced to do call in the national armies, use lethal violence to force their currencies on people and keep order. Then establish central banks to control the supply of currency. Or in other words convert bitcoin to fiat money. Mining has already created an incentive for people to in a way make money without any productive activity or trade, but through ledger keeping. It will be hard to convince people in the future to start skint poor in an economic system where there are 1% rich people who made all their money through non productive enterprise. And expect them to continue to suffer through it. Finally the inevitable will happen.

vinchuco 9y ago

>The Nobel prize-winner Robert Mundell believes that Gresham's Law could be more accurately rendered, taking care of the reverse, if it were expressed as, "Bad money drives out good if they exchange for the same price." [1] Not attacking your main point, but questioning the correct application of this principle. It seems like it originally was meant to talk about the same resource (a coin made of metal, metal becoming higher price than the coin). It doesn't seem like Bitcoins are intrinsically made of dollars. [1] https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law

6nf 9y ago

> This ironically leads to a problem with the currency not being used. This is not a problem for most of us.

kamaal 9y ago

There is also one more scenario. The moment you have bulk of the bitcoin money in the hands of the 0.01% or even the 1%(Thanks to mining) people- The remainder 99.whatever% people can simply call it quits, refuse to trade in bitcoins and start their own currency. What will follow is obvious, the rich people and their whole enterprise can end up being worth 0. To prevent it they will be forced to do call in the national armies, use lethal violence to force their currencies on people and keep order. Then establish central banks to control the supply of currency. Or in other words convert bitcoin to fiat money. Mining has already created an incentive for people to in a way make money without any productive activity or trade, but through ledger keeping. It will be hard to convince people in the future to start skint poor in an economic system where there are 1% rich people who made all their money through non productive enterprise. And expect them to continue to suffer through it. Finally the inevitable will happen.