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Today I wanted to share with you Gresham's Law and my view on how it affects the world today. Another way to phrase it is: Legal tender laws force people to accept coins or banknotes and use it for payments. In the distant past Gold and Silver were the universally accepted Good Money.
And I even wrote how the world accepted Gold as Good Money here: Ever since the release of Bitcoin into the world from Jan 4, people kept criticizing it and saying how it would fail. Analysts and Doom-prophets keep repeating that Bitcoin and the other Cryptocurrencies are bubbles soon to burst based on what they know of traditional finance and stocks.
What was once laughed and ridiculed by the rich banking elite are now being eyed with fear and concern because they can see a real possibility of a monetary revolution that would render all their wealth worthless to the world. What drove the adoption and price of Bitcoin up from nothing was purely basic laws of economics lining up. But that was until the 1 MB ceiling greshams law bitcoin hit and everything changed.
To address this after years of debate and politics miners and users were forced to accept Segwit and after activation the effect was effectively zero. Transactions remained expensive and the number of unconfirmed transactions keep getting bigger.
Gresham's Law will soon reveal itself once more but this time against Bitcoin as it currently stands. Greshams law bitcoin is basic greshams law bitcoin and Gresham's Law will prevail. Bitcoin Cash would be the next logical choice for current Bitcoin users since the only difference is that it has expanded it's Blocksize limit to 8MB allowing for more transactions and cheaper fees to be processed.
And if they had Bitcoins before the Hard Fork then they would have greshams law bitcoin equivalent amount of Greshams law bitcoin Cash to use and transact with. The Market Capitalization of Bitcoin would slowly transfer to Bitcoin Cash and effectively continue the original intent of Bitcoin of being a peer-to-peer digital cash being used with cheaper fees and faster greshams law bitcoin and available for everyone around the world to use.
And the same can be said with Alt-coins as well of being able to offer faster transactions and cheaper fees than Bitcoin today. As long as they follow the checklist of being Good Money then in the long-term future they could might as well replace Bitcoin in dominance. BTC is faced greshams law bitcoin the problem of having the transactions take too long to process. If you are a buying a house, waiting an hour for the transaction to complete might not be a big deal.
However, I doubt many are willing to stand around that long when purchasing a cup of coffee. The amount of transactions per second that a Visa, as an example, can process, is light years ahead of BTC.
Technological and scaling issues still remain on this front. Jeff Berwick on dollarvigilante shared his taughts that Bitcoin cash will be greshams law bitcoin only one left standing at the greshams law bitcoin. Thanx for this post. I learned something here The Bitcoin community is paying the price literally for their "1MB forever" delusion! Gresham's Law, Cryptocurrencies and Bitcoin today. The law was named after Sir Thomas Gresham —who was an English financier.
Gresham's Law says that Bad Money drives out Good Money if they exchange for the same price Another way to phrase it is: Legal Tender Laws Legal tender laws force people to accept coins or banknotes and use it for payments.
Good Money What is "Good Money" anyway? Bad Money drives out Good Money if they exchange for the same price Good Money are the cryptocurrencies that complete our checklist. The price rise of Bitcoin is not behaving like typical stocks. The original Bitcoin and the Segwit pivot What drove the adoption and price of Bitcoin up from nothing was greshams law bitcoin basic laws of economics lining up.
Transactions are getting slower and getting more expensive. Segwit failed to deliver it's promises and we are left with a stunted Bitcoin greshams law bitcoin. If you found this interesting please don't forget to Upvote, Comment or Resteem! Authors get paid when people like you upvote their post. Thanks but I do not understand the reverse flippening. Why would Bitcoin become bad money? Well now we have SegWit and LN. Problem solved for Bitcoin Core. You made the mistake of implying scaling issues are permanent and can never be solved.
I wish you BCash people would be a bit more truthful.