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See https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law. If given the choice between holding bitcoin and USD people will

See https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law. If given the choice between holding bitcoin and USD people will hold bitcoin, but they will still want to buy stuff. People then have an incentive to use USD to buy stuff, and since USD is used to buy stuff they will want to have USD on hand to buy stuff when they want to. Hence Gresham's Law.

jstanley 9y ago
> People then have an incentive to use USD to buy stuff, Yep. > and since USD is used to buy stuff they will want to have USD on hand to buy stuff when they want to Nope! Starting from a position of only having BTC (because you've already got rid of the USD you had, and you immediately convert any USD you receive into BTC), what is the advantage of buying USD to spend instead of spending your BTC directly?
- raiflip 9y ago
  "Nope! Starting from a position of only having BTC (because you've already got rid of the USD you had, and you immediately convert any USD you receive into BTC), what is the advantage of buying USD to spend instead of spending your BTC directly?" Based on a false premise. Under no scenario will people only have BTC. With regards to what people will be paid in, insofar as people are planning to spend money, they'll want it paid in USD.
  - jstanley 9y ago
    Why? If I can get paid in USD or BTC, and the BTC will buy me more when I come to spend it, why would I prefer to get paid in USD?
    - raiflip 9y ago
      Think of it this way. For any given transaction, the spender will want to spend USD, the receiver will want BTC. Lets say the receiver gets his way. Then the spender will want to hold onto the BTC anyway, unless the product/service is something they really need. The receiver will have an incentive to give in because if they demand BTC, then for most people they get nothing, but if they demand USD, they'll get USD and could in theory convert it to BTC while holding it.

jstanley 9y ago

> People then have an incentive to use USD to buy stuff, Yep. > and since USD is used to buy stuff they will want to have USD on hand to buy stuff when they want to Nope! Starting from a position of only having BTC (because you've already got rid of the USD you had, and you immediately convert any USD you receive into BTC), what is the advantage of buying USD to spend instead of spending your BTC directly?

raiflip 9y ago
"Nope! Starting from a position of only having BTC (because you've already got rid of the USD you had, and you immediately convert any USD you receive into BTC), what is the advantage of buying USD to spend instead of spending your BTC directly?" Based on a false premise. Under no scenario will people only have BTC. With regards to what people will be paid in, insofar as people are planning to spend money, they'll want it paid in USD.
- jstanley 9y ago
  Why? If I can get paid in USD or BTC, and the BTC will buy me more when I come to spend it, why would I prefer to get paid in USD?
  - raiflip 9y ago
    Think of it this way. For any given transaction, the spender will want to spend USD, the receiver will want BTC. Lets say the receiver gets his way. Then the spender will want to hold onto the BTC anyway, unless the product/service is something they really need. The receiver will have an incentive to give in because if they demand BTC, then for most people they get nothing, but if they demand USD, they'll get USD and could in theory convert it to BTC while holding it.