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Gresham’s Law is not about “bad money driving out good” in a free market. It is about fungibility loss under fixed legal tender rules. When coins had different gold content but the same face value, people hoarded the purer (less debased) older ones and spent the debased (new) ones. Bitcoin and fiat do not have a fixed exchange rate, so Bitcoiners saving sats is not Gresham’s Law.

What we see here is an attempt to control the narrative, framing Bitcoin as a competitor to gold rather than the USD, because few people use it for everyday transactions. This is not just a simple slam/dunk from Bitcoin haters. Sound money theory states that money is a market good like any other, with its value coming from its use in exchange. The greater its demand for trade, the more valuable it becomes.

This applies to fiat as well. The USD is the most valuable fiat currency not because of any special monetary properties - it gets debased like all others, but because of its demand in global trade, enforced by its reserve currency status.

If people do not start spending Bitcoin and demanding it for all kinds of products and services, it will never challenge USD dominance. At some point, scarcity alone will not be enough. Without strong monetary demand, scarcity becomes meaningless.

FernandoTheKoala 10mo ago

Ok so you are saying that btc value comes from its use, and framing it ONLY as "digital gold" pushes ppl to hoard it and never use it as medium of exchange (and if btc is only a SoV nothing changes in our fiat system).

I agree 100% with you, at a certain point we must start using btc as MoE otherwise everything fails here, but I guess in my head I see this passage from SoV to MoE happening "organically" (I confide in our governments to become ever more oppressive/restrictive thus forcing ppl to use btc as MoE).

I also think that the MoE part will increase dramatically in the next few years, simply because we are building the "infrastructures" now and the government regulation/framework to allow more business to accept btc and more people to pay in btc withouth worries. Withouth this I don't see how the MoE can expand. Also, for me the #1 thing would be eliminating capital gain tax on btc, that would really push the MoE aspect.

Maybe I'm too optimistic/naive as I expect the MoE passage to happen naturally in time.... and from what I gathered reading around we still need a bit more time to scale btc layers 2/3 to allow a solid amount of ppl to use btc as MoE.

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Discussion

Tauri 10mo ago

You understood me, that’s good. Few problems though. That organic transition won’t happen on its own—it requires human action. And it certainly won’t happen because governments suddenly change their minds about BTC. The U.S. didn’t start a SBR because Trump had a Eureka moment in the shower. He did it because he saw that Bitcoiners now make up a significant chunk of the electorate.

In the same way, Bitcoiners need to start reprogramming themselves to spend a few sats here and there—maybe within local communities or even by accepting only Bitcoin for their services, whether it’s lawn mowing or construction. This movement needs to reach critical mass now, before normies start associating Bitcoin exclusively with “digital property in cyberspace” or any other nonsense. Because at that point, forget about getting rid of capital gains tax on Bitcoin.

And by the way, there’s nothing stopping us from using the base chain in a sovereign way. At 3 sats/vB, Bitcoin payments are practically free—yet people still don’t use them. This isn’t a scaling or a technical problem; it’s a willingness problem.

Bottom line: if we want Bitcoin to win, we need to step up our game.