RE: Venezuela's New Cryptocurrency Is A Scam
I don't know the answer for certain, but my thought is that Gresham's law is possibly outdated for this stage in our technologically-oriented monetary progression. Crypto is a new, nonphysical money paradigm that doesn't really give a damn about borders. It doesn't really need to have a pairing or any association with a fiat currency or any other form of money. It seems as though it should be able to exist as a parallel money system that wouldn't be polluted/diminished/destroyed by any other fiat system. Of course this is theoretical at this stage in the crypto game as few nations (perhaps only japan) recognize any crypto as legal tender. However, in the purest argument, law is essentially moot since real crypto (full decentralized, etc) is beyond the reach of law and can pretty easily operate in the underground economy. Now in the real economies of the world, who knows...we'll see how cryptos and nations coexist.
I've got a feeling that as things develop in the crypto space they may outgrow the effects of Gresham's economic law. I think we can kind of see the effects of this economic "law" (Gresham's) in the spending/hodl patterns of the market today. People don't want to spend their deflationary crypto when they've got trash cash (fiat) that folks will still take. That's one of the reason hodl is so popular. So I feel like we're seeing the bad money (fiat trash cash) chasing the good money (crypto) out of the market, in my opinion. But with all of the options out there in crypto...maybe as fiat goes the way of the Do-Do, we'll see less of this with competing cryptos. I doubt it but, you may be correct.
Hmm, I see what you are saying. As a counter though, my views of the spending/hodl phenomenon are a little different. I think the majority of people are not spending their crypto simply because the tech has not yet matured and quite simply it is not easy to spend for the vast majority of goods people buy (grocery stores, gas stations, online shopping, and on and on). I think of the hodl mentality mostly as a speculative phenomenon where people believe the tech is so nascent and hasn't come close to realizing its real market value as of yet. So, instead of taking the risk of actively trading the ups and the downs, people choose to hodl believing that, in the long run, price appreciation will happen due to a number of factors including new market entrants, tech advancing, institutional money entering market, etc. However, it plays out, certainly is fascinating to watch...such a dynamic situation!
Yes sir, indeed. Crypto must gain market velocity inorder to truley challenge the fiat fraud. I have faith in the people will get it in the nick of time & we'll see peace & prosparity. The likes of which this world has never seen.