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What you are describing is an ancient economic law known as Gresham's law: https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%2
by raiflip 9y ago
What you are describing is an ancient economic law known as Gresham's law: https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law . It states that bad money drives out good because people hold onto good and spend bad. Bad is really normative saying more valuable is good and less is bad. So deflationary (up in value is good) and inflationary is bad (down in value).
Frankly your argument is incoherent. If something is bad for the economy its bad for individuals. If the economy goes down most people starve.
You also seem to argue that people hold onto more of a currency than another that currency "wins" but the currency that "wins" is the one in circulation. If by "win" we mean the currency that survives, then the one that survives is the one in circulation. Again this is all eco 101.
- anonymous5133 9y agoCrypto is being used in circulation though. There are dark net markets that sell drugs and you can buy various things with crypto. You can use certain websites to buy stuff off amazon while other websites sell gift cards which indirectly allows you to buy stuff in stores with crypto. The gift card is just pre-paid store credit. In the past, it was difficult to use 100% crypto to live on but now it is a real possibility.
- raiflip 9y agoThat's a good point, but for the case of illegal online activity bitcoin currently has a kind of anonymity guarantee that no other system does, and is as such an apples to oranges comparison. If the USD had the same anonymity guarantee you'd see those people making the same choice everyone else is: hold onto bitcoin and spend USD.