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I think this is a valid position to take. SOV before MoE is necessary. People are expected to spend their weakest money first and only spend the strong money because there are no other options. Not spending your BTC and acquiring more BTC drives price higher through SOV which brings about incentives for MOe sooner.
↩ replying to npub1k4u8...fz6d
Ok, I’ll just make a list of it: 1) SoV before MoE is a theoretical framework presented as truth. It’s impossible to solve definitively - like the dilemma of what came first: the chicken or the egg. One curious fact: Bitcoin was used as a MoE before it had any value assigned to it (the famous pizza guy). In the early days, it was predominantly used as MoE (Silk Road) before anyone claimed it was anything close to a SoV. 2) You’re making a very ill-informed interpretation of Gresham’s Law. TL;DR—it’s not about Bitcoin at all. 3) Completely wrong and dismisses the history of money and monetary demand. Monetary demand drives NGU more than scarcity. Gold became truly valuable when it was first monetized. Silver collapsed in value compared to gold when it was demonetized. Scarcity without monetary demand makes a good collectible. Monetary demand on top of scarcity makes good money.
↩ replying to Tauri
I understand people have made the “SoV before MoE” argument before and I’m not intending to agree with everything they said. My claims are based on my own research and understanding of monetary history and predictions about how Bitcoin may differ from historical monetizations (because Bitcoin is unique in that there was a time before it existed and it also went through a brief period of hyper(supply)inflation. The chicken and egg analogy works at a high level, but I should add some nuance to my claims. I believe _wide spread_ use as a SoV is a prerequisite to wide spread use as a MoE. But the ability to use something as a MoE is a prerequisite to the usefulness in something as a SoV. You can’t store value in something if it’s impossible to transfer or spend it. So yes transactions must happen as proof that they can happen and this is necessary for anyone to make a decision to store value in it for use in the future. FWIW I’m not intending to invoke Greshams law. When you say monetary demand (and when OP said monetary use), I assume you mean as a MoE. One can demand and use money as a SoV also. Before Laszlo bought pizza with bitcoin, bitcoin’s value rose infinitely from 0 to a fraction of a penny. It stored value better than anything in history despite also undergoing hyperinflation. Bitcoin will be more widely adopted as a SoV before MoE because self interested actors are incentivized to do so. Bitcoin is an amazing SoV because of game theoretic and praxeologic incentives. The incentives for using bitcoin as a MoE today are not nearly as strong. I’d argue that MoE is not even the goal. It’s a side effect of the goal. The aggregate of all things valued by humans is deteriorating overtime because we have broken stores of value. Bitcoin fixes this. Once everyone realizes Bitcoin fixes this, they will not accept anything but bitcoin payment. In the meantime, if 99% of people don’t use bitcoin, it’s perfectly fine to pay them in something else so that you can save more time, energy, and money that can otherwise be used stacking sats and increasing the % of global value stored in bitcoin.
*Goes to a restaurant*: Why don’t you accept Bitcoin?! Restaurant owner: actually sir we do. *looks confused* … but do you have a special discount for paying with bitcoin? No, sir, I’m afraid we don’t. Then I’ll pay with fiat because I want arbitrage to use bitcoin as money.
↩ replying to Newman
Spend and replace. It’s the same. If merchant sells for multiple currencies, use what you want. If you prefer certain currencies, make sure your balance goes up in them. If a merchant accepts bitcoin, I give them bitcoin and spread this capital around. Then I pull more bitcoin from the market, where some is not being spread. 1% exchange loss max. Infinite gains from spreading the corn. My pro-bitcoin strategy.
Gresham's Law in economics states that "bad money drives out good." It means when there are two forms of currency in circulation, the one perceived as having lesser value (bad money) will be used for transactions, while the more valued currency (good money) will be hoarded or disappear from circulation. This typically happens when there's a lack of trust in the lesser value currency's stability or value.
Chicken and egg. I’d spent bitcoin if shops around me accepted it. Living off gift cards while larping about being on a bitcoin standard is not the same thing. You’re only profiting the gift card companies. Therefore the most important thing, ie next 5 years is to HODL Bitcoin which drives merchant acceptance of this asset with price appreciation. HODL to SPND is my motto.
🛡️
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They are using it as money. Gresham's Law states that artificially overvalued money will drive good money into hoarding. That's still a monetary use. Dollars suck and are overvalued by the welfare warfare state, so the law applies sort of indirectly here even though there is a free market exchange rate between dollars and bitcoin. People want to get rid of their shitty fiat by spending it.
↩ replying to corndalorian
It's one example of price controls in supply and demand dynamics, which are very much real. What I gave was merely a hypothesis because it's not really an example of Gresham's Law except that dollars are overvalued compared to basically all other goods, so all other goods are gonna be hoarded in as much as the people who understand money will use them as money. But Gresham's Law is certainly true.
↩ replying to corndalorian
They are true descriptions. But human action changes the game. That's how economics always works. You don't have to talk to me like I'm an unthinking redditor. Economic laws govern everything, and yet individuals govern what economic laws will apply to them at any moment. Notice that I didn't say EVERYONE will or should hoard ALL their bitcoin. I merely implied it's a natural tendency, it tends to often be the rational thing to do in current conditions for a lot of people.
↩ replying to Kevin's Bacon
I will talk to you how I want, just as you will do the same toward me. If you feel insulted by me being direct with you, that’s a you problem. Get used to it or get lost. 🤷‍♂️ Neither of these (Gresham or Theirs) are laws, as a law is universally applicable. It is stupid to refer to them as such, especially since they contradict each other and yet are both referred to as “laws.” Do they describe human behavior in some circumstances? Sure. Are they universal laws? No. At best they are perhaps hypotheses
↩ replying to corndalorian
I didn't feel insulted or bothered. You're reading too much into what I'm saying. I'm afraid you don't understand the economic theory, nor the point I am making. I'm basically saying you're right, but I am clarifying the points for precision. I even said they are NOT universally applicable. If you can't understand that, THAT'S a you problem. I'm only an amateur economist, what do I know about economic laws?