People invoke Gresham’s Law on here all the time, and I suspect ~0 of them (even economists) have actually gone back to read what Gresham said. Most invocations of Sir Thomas Gresham take the wrong lesson, and I see it a lot, so let’s sort it out. What did Gresham say in his correspondence to Queen Elizabeth I in 1558? He was explaining why the circulating coinage was primarily the heavily debased coins of her late brother and father. But people did not hold onto or hoard the older, more valuable coins. “all your fyne gold was conveyed out of this your realm” should be the dead giveaway to anyone parsing the Elizabethan English of the letter that he was explaining all the sound currency had been exported (to Flanders and Holland, primarily). He explains also that this is a phenomenon of the legal tender status of the coinage. Foreign partners were under no obligation to accept underweight coins, so the best coins had to be used instead, causing a net outflow of gold and silver to the Continent from England. This is NOT the story of “bad money drives out good” that gets told on Crypto Twitter, for a couple reasons. First, Gresham’s Law ONLY applies to legal tender money. Private currencies nearly always have to compete by being better than alternatives. It is only because the heavy hand of the law compelled acceptance of Henry VII’s and Edward VI’s crappy coins that could circulate at face value. Second, part of what was in play is the Alchian-Allen Theory, which explains why the best apples, best seafood, best whatever, are often exported and not available in their local markets. Transport of money was not trivial in terms of costs, and it is less expensive to ship a single chest of “good” coins than two chests of “bad” coins across the English Channel to trade partners who will discount the “bad” coins to a lower denomination. This is why large denominations existed in the first place, and why small denomination money has usually been undersupplied across all of history. Fixed transport and production costs make it relatively more expensive. So what lessons does Gresham’s Law have for crypto? Not a ton, unless some government or very powerful group enforces two stablecoins to have the same face value, despite differing actual values. Then you see those inside the ringfence of that government get left holding more and more “bad” money as the “good” money is used up trading with partners who aren’t compelled to accept the “bad” money.