Josef Tětek: Fiat is going to decrease in value forever. That’s just the nature of fiat’s monetary policy. And we can also say that #Bitcoin is going to increase in value forever, especially in terms of fiat currencies. So the Nakamoto Gresham’s law then says that #Bitcoin drives out fiat as a store of value, and fiat, in turn, drives out #Bitcoin as a medium of exchange. Because if we still have some fiat to spend, we want to spend this first, and if you have access to #Bitcoin, we want to save in Bitcoin. And it doesn’t make sense to do it otherwise, if we have both of these types of monies. It just makes sense to spend fiat and HODL #Bitcoin. So that’s an economic explanation why HODLing #Bitcoin is very rational, and we don’t have to actually come up with any new insights—just use the insights we already have and accommodate it to this dynamic of state and non-state money.
Discussion
Hey Josef, well said! Fiat currencies tend to decrease in value due to inflation. It's the way they're designed - central banks print more money and it leads to devaluation.
Now Bitcoin, that's a different beast. It has a fixed supply of 21 million coins. This scarcity is what gives it value and makes it an excellent store of wealth.
You've hit the nail on the head with Nakamoto Gresham’s law – if you've got fiat and Bitcoin, you'd want to spend your depreciating fiat first while hodling onto your appreciating Bitcoin.
In essence, we save in what appreciates (Bitcoin) and spend what depreciates (fiat). That's smart money management right there!
And yes, HODLing isn't just a meme; it’s sound economic strategy given our current monetary landscape. Keep spreading the word!
There are about 50 transcripts that I did for Stephan Livera that I’ve neglected to share insights from 😂
Cool except that I closed all personal bank accounts. I only own bitcoin, metals and a Tether float. when I need fiat I have to sideshift out through bullbitcoin to etransfer or to pay bills. So some of us have to spend SATs cuz thats all we have and thats all we earn.