Per definition "legal tender is anything recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax". Unless loans etc. are based in Bitcoin, legal tender means nothing. Borrowing in the ever more valuable Bitcoin is too ghastly to contemplate. Investing in Bitcoin only and borrowing in USD only, or the other way around, will not work as it will give rise to a massive one way arbitrage. It means nought, even if it is law that you may pay anybody in bitcoin whilst the payment is in bitcoin the value of the transaction is based on another currency, I.e. the payment price is not listed in bitcoin. If the purchaser can choose to pay in fiat or bitcoin, if the price for the same article is fixed in USD and Bitcoin (if you have both freely available), the purchaser would choose the most favourable payment medium for himself and the seller will always be at the losing end of the transaction because of the volatility of Bitcoin. But yes, that is not the focus of your article.
Funny you use Zimbabwe as an example, for all day to day financial transactions millions of Zimbabweans use EchoCash which is a mobilephone-based money transfer, financing and microfinancing service. The Zimbabwean Stock Exchange all share index is up 252% ytd, 500% 1y and 3894% 2y – where do you think Zimbabweans invest their money? Although Zimbabwe is my neighbouring country, I don’t profess to have any intimate knowledge of their market.
Bimetalism and dual-tender can never be compared to one another as in Bimetalism, as you state in your article, the rate between the two metals are fixed, end of the story. It matters nothing if you buy or invest in either of the metal coins as the value between them are fixed. The one may be more practical than the other tough as who want to hoard vast amounts in copper coins rather than gold ones as far as space is concerned.
You find nothing on dual tender as it has no right to exist. Tender (except in El Salvador) applies to dept only and if you borrow USD you owe USD and if you borrow GBP you owe GBP, your debt is in the currency you owe and you have to repay in the currency you owe.
Gresham’s Law applies to the weight and physical condition between two coins of the same domination and precious metal and not to the values between two coins of different metals. It is only natural for the better, newly issued, precious metal coins of full weight and in perfect condition, to disappear out of circulation, hoarded by the population and be replaced by the putting worn, lower in weight and defaced coins back into circulation. It applies to all coins of any valuable metal and that is why modern coins are composed solely of base metals. You are 100% correct in saying Gresham’s law can and will never apply to bitcoin ( even if a rate could be fixed) as there is no physical coin and it has no intrinsic value.
The only condition that may save the El Salvador Bitcoin experiment of total disaster is if goods and services and debt are NOT priced in Bitcoin. The effect on employers as opposed to employees, sellers as opposed to buyers, lenders as opposed to borrowers, etc is too ghastly to contemplate. Until Bitcoin becomes less volatile like fiat, no normal day to day transaction can be priced in Bitcoin without bankrupting someone in any transaction over the long term.
Per definition "legal tender is anything recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax". Unless loans etc. are based in Bitcoin, legal tender means nothing. Borrowing in the ever more valuable Bitcoin is too ghastly to contemplate. Investing in Bitcoin only and borrowing in USD only, or the other way around, will not work as it will give rise to a massive one way arbitrage. It means nought, even if it is law that you may pay anybody in bitcoin whilst the payment is in bitcoin the value of the transaction is based on another currency, I.e. the payment price is not listed in bitcoin. If the purchaser can choose to pay in fiat or bitcoin, if the price for the same article is fixed in USD and Bitcoin (if you have both freely available), the purchaser would choose the most favourable payment medium for himself and the seller will always be at the losing end of the transaction because of the volatility of Bitcoin. But yes, that is not the focus of your article.
Funny you use Zimbabwe as an example, for all day to day financial transactions millions of Zimbabweans use EchoCash which is a mobilephone-based money transfer, financing and microfinancing service. The Zimbabwean Stock Exchange all share index is up 252% ytd, 500% 1y and 3894% 2y – where do you think Zimbabweans invest their money? Although Zimbabwe is my neighbouring country, I don’t profess to have any intimate knowledge of their market.
Bimetalism and dual-tender can never be compared to one another as in Bimetalism, as you state in your article, the rate between the two metals are fixed, end of the story. It matters nothing if you buy or invest in either of the metal coins as the value between them are fixed. The one may be more practical than the other tough as who want to hoard vast amounts in copper coins rather than gold ones as far as space is concerned.
You find nothing on dual tender as it has no right to exist. Tender (except in El Salvador) applies to dept only and if you borrow USD you owe USD and if you borrow GBP you owe GBP, your debt is in the currency you owe and you have to repay in the currency you owe.
Gresham’s Law applies to the weight and physical condition between two coins of the same domination and precious metal and not to the values between two coins of different metals. It is only natural for the better, newly issued, precious metal coins of full weight and in perfect condition, to disappear out of circulation, hoarded by the population and be replaced by the putting worn, lower in weight and defaced coins back into circulation. It applies to all coins of any valuable metal and that is why modern coins are composed solely of base metals. You are 100% correct in saying Gresham’s law can and will never apply to bitcoin ( even if a rate could be fixed) as there is no physical coin and it has no intrinsic value.
The only condition that may save the El Salvador Bitcoin experiment of total disaster is if goods and services and debt are NOT priced in Bitcoin. The effect on employers as opposed to employees, sellers as opposed to buyers, lenders as opposed to borrowers, etc is too ghastly to contemplate. Until Bitcoin becomes less volatile like fiat, no normal day to day transaction can be priced in Bitcoin without bankrupting someone in any transaction over the long term.